Japan's giant public fund picks 15 managers to invest JGBs
TOKYO, Oct 1 (Reuters) - Japan's public pension fund, the world's biggest, has selected 15 external money managers to oversee Japanese bond investments in its portfolio, the public fund said on Monday, in a move aimed at boosting returns to cope with a rapidly ageing population.
The Government Pension Investment Fund, known as the GPIF, has $1.39 trillion in assets, bigger than the size of the Australian economy. It invests the reserves of national and corporate pension plans.
The GPIF has already started to diversify its investments in search of better returns. For the first time ever, it committed money to emerging markets equities earlier this year.
It held about 70.2 trillion in Japanese government bonds, or about 65 percent of its 108.2 trillion yen portfolio as of June.
Out of the total in domestic bonds, 57.5 trillion yen are managed by asset managers and the GPIF. The rest is held under the Fiscal Investment and Loan Program (FILP).
The GPIF itself managed about 15 percent of domestic bond investments as of end-March.
The public fund selected a total of six managers to passively manage Japanese bonds, while it appointed nine managers for active investments in the asset class. It had issued a public tender last year to select the new managers of domestic bonds.
Mitsubishi UFJ Trust and Banking, State Street Global Advisors, part of State Street Corp
, and Resona Bank
were appointed as new managers for the GPIF's passive investment portion.
, the world's biggest money manager, which oversaw about 5.7 trillion yen ($73.26 billion) in passive domestic bond investments for GPIF as of end-March, was not part of that list. BlackRock continues to manage other investments for GPIF.
A total of four new managers, including Pimco and Prudential Investment Management, were selected as active managers of Japanese bonds. Previous managers in that asset class whose names were missing from the GPIF list were Nikko Asset Management, Nomura Asset Management, Meiji Yasuda Asset Management and Resona Bank.
BlackRock, Nomura Asset, Nikko Asset and Resona, which won a mandate for passive investment, declined to comment, saying they
don't comment on client activities. Meiji Yasuda Asset was not immediately available for comment.
The GPIF suffered a $26 billion decline in its portfolio value in April-June, its first fall in three quarters, as the yen's strength and falls in domestic and foreign equities hurt its quarterly performance.
The public fund's investment in Japanese bonds produced a positive return of 1.04 percent, or a 604.1 billion yen investment gain.
The pension fund makes allocations in line with its model portfolio, which gives a weighting of 11 percent to domestic stocks, 67 percent to domestic bonds, 9 percent to foreign stocks, 8 percent to foreign bonds and 5 percent to short-term assets.
The public fund last selected active managers in the 2004/05 financial year, while this was the first time the fund selected new passive managers through a tender, a GPIF official said.
Following is the list of managers (new companies indicated by asterisk*):
1) Passive investment (benchmark: Nomura BPI excluding ABS)
*State Street Global Advisors Mizuho Trust and Banking Sumitomo Mitsui Trust Bank
2) Passive investment (benchmark: Nomura BPI JGB)
*Resona Bank Sumitomo Mitsui Trust Bank
*Mitsubishi UFJ Trust and Banking
3) Active investment (benchmark: Nomura BPI excluding ABS)
*MU Investments Diam Asset Management Tokio Marine Asset Management *Pimco Japan
*Prudential Investment Management Japan
*Manulife Asset Management Mizuho Trust and Banking Sumitomo Mitsui Trust Bank
Mitsubishi UFJ Trust and Banking
($1 = 77.8000 Japanese yen)
(Reporting by Chikafumi Hodo; Editing by Muralikumar Anantharaman)
Keywords: JAPAN FUND/MANAGERS