Japan’s KKR picks managers for $1.3 billion in equity mandates

01 August 2014   Category: News, Asia, Global, Japan   By Maya Ando

Japan’s Federation of National Public Service Personnel Mutual Aid Association (KKR), which manages the pension savings of 1.24 million active and retired public servants, has selected managers to oversee 134 billion Japanese yen (US$1.3 billion) of active local equity funds.

The appointed houses are: Amundi Japan; Capital International; Goldman Sachs Asset Management; Schroders Investment Management; DIAM Asset Management; Nissay Asset Management; Nomura Asset Management; Nomura Funds Research and Technologies; Fidelity; BlackRock Japan; Mizuho Asset Management; Sumitomo Mitsui Trust Bank; and Mitsubishi UFJ Trust and Banking.

For eight of these fund houses it will be the first time that they have worked with the KKR on active equity investments. Nikko Asset Management and JP Morgan Asset Management, which were mandated 58.5 billion yen and 29.3 billion yen, respectively, for fiscal year 2013, have been left out of the latest round of mandates.

Overall, about 16% of KKR’s total reserves, or 1.2 trillion yen, have been mandated to fund managers. KKR’s investment strategy is heavily weighted to the local market, where it allocates 75.5% and 8% to domestic bonds and domestic equities, respectively. Foreign assets account for 9.9%, of which 8.6% is allocated to overseas equities.

For fiscal year 2013, the fund achieved a 4.6% annual return, with 7.26 trillion in assets as of the end of March 2014.