Japan’s GPIF overhauls top investment panel

24 April 2014   Category: News, Asia, Global, Japan   By Maya Ando

Japan’s Government Pension Investment Fund (GPIF), the world’s largest manager of retirement savings with US$1.26 trillion in AUM, has overhauled its investment committee amid a push by Prime Minister Shinzo Abe for it to cut its bond holdings and buy higher-yielding assets.

The reshuffle saw the number of committee members reduced from ten to eight and the appointment of three members from a state panel that in November recommended the GPIF reduce its purchases of lower-yielding domestic bonds.

Yasuhiro Yonezawa, a professor at Waseda University’s Graduate School of Finance who sat on that panel, is expected to be named as head of the revamped investment committee. He previously sat on the GPIF committee between 2010 and 2012.

The only two members to keep their places on the panel were Kimikazu Nomi, chief executive officer at private equity fund Innovation Network Corporation of Japan, and Hiromichi Ono, a board member and corporate vice president of Ajinomoto Co.

The new appointees selected by Japan’s Health Ministry are Junko Shimizu, a professor of international finance at Tokyo’s Gakushuin University; Yoko Takeda, chief economist at Mitsubishi Research Institute; and Setsuya Sato, a professor at Toyo University who previously served as an adviser to the World Bank.

The GPIF has been reviewing its asset allocation to lower its domestic bonds investment, where the fund currently allocates 60% of its total assets.

Finance Minister Taro Aso said this month that the GPIF will announce a decision on its new portfolio structure in June.

Presently, GPIF’s portfolio allocation is 60% and 12 % to domestic bonds and equities, respectively, while 11% and 12% is allocated to foreign bonds and equities, respectively.

Since returning to power last year, Mr. Abe has been encouraging the fund to allocate more to domestic equities and other riskier investments in order meet Japan’s inflation target of 2%.