GPIF joins DBJ, OMERS to invest up to $2.7b in infrastructure

According to a release, GPIF has earmarked JPY280 billion ($2.7 billion), or 0.2% of its total JPY129 trillion of assets under management, for the scheme. It will invest via a unit trust to which DBJ will also contribute $100 million.

The unit trust - to be managed by Nissay Asset Management - will in turn invest in infrastructure opportunities identified by OMERS, which will co-invest alongside the vehicle over its five-year investment period.

Particular areas of interest include power generation, electricity transmission, gas pipelines, and railways. OMERS returned an average 11% annually between 2009 and 2013 through such investments, GPIF said.

Currently about 60% of GPIF's assets are invested in Japanese bonds, with the rest allotted to foreign bonds as well as domestic and international stocks. The announcement of the partnership comes three months after a government-appointed panel issued a report recommending Japan's pension funds increase their commitments to alternative assets.

The so-called "Panel for Sophisticating the Management of Public/Quasi-public Funds" was formed in December last year as part of a series of bold policy changes brought in by Prime Minister Shinzo Abe in a bid to restore growth to the nation's economy.

The report recommended that the country's pension funds - which collectively hold JPY200 trillion in assets - should review domestic bond holdings and consider investing more in overseas assets.

They should also look to diversify into private equity, venture capital, real estate investment trusts, infrastructure and commodities, where returns may be higher than on local sovereign bonds.

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• Topics
• North Asia
• Infrastructure
• LPs
• Japan
• Government Pension Investment Fund (Japan)
• Infrastructure
• The Development Bank of Japan (DBJ)
• Ontario Municipal Employees Retirement Scheme