Japan's GPIF to hire 'gatekeepers' before looking at co-investments, funds

Japan’s ¥145trn (€1.24trn) Government Pension Investment Fund (GPIF), which plans to begin investing in global real estate and infrastructure, will focus on hiring fund-of-funds managers and “gatekeepers” before moving onto co-investments and specific fund investments.

The world’s biggest pension fund has revealed it will build its debut 5% allocation to alternative assets by entering into these three distinct phases: “gatekeeper/fund of funds”; “co-investment with institutional investors”, and “specific funds investment”.

At an orientation meeting last week, which was open to third-parties, GPIF said: “Our first stage begins with three phases, trying to make diversified core global portfolios for this time as an initial phase, before starting co-investments and specific fund investments in specific regions and strategies.”

It has appointed Towers Watson Investment Services, a subsidiary of Willis Towers Watson, and Russell Investments Japan to carry out due diligence and evaluation of managers.

Earlier this month, IPE Real Estate reported that GPIF had issued a call to real estate and infrastructure fund-of-funds managers to apply for investment mandates.

GPIF will create separate domestic and global real estate mandates. The latter will be differentiated by North America, Europe and “others”.

Earlier this year, GPIF hired former Mitsui Fudosan managing director Hideto Yamada as head of real estate.

Yukihiko Ito, managing director of Tokyo-based placement agency Asterisk, said the move by GPIF was a strong signal not only to fund managers but other Japanese institutional investors.

“We are seeing strong motivations by all types of Japanese institutional investors including pension funds, financial institutions, insurance companies, listed REITs, real estate developers for global real estate investment,” he said.

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