VIDEO: PineBridge Investment's Michael Chae

Speaking with AVCJ TV at the AVCJ Japan Forum held last month, Chae said that Japanese institutions are considering secondaries as a tool to rebalance their portfolios, and are turning to the category as an additional source of liquidity.

Secondaries' more liquid characteristics appeal to Japanese LPs who are under pressure to streamline their investments, due to the economic environment and regulatory changes implemented following the crisis. Japanese pensions, in particular, are stringent in their investments into private equity, and Chae says secondaries have materialized as a more palatable investment opportunity for them.

"Some of the pensions that we deal with have shown interest given the features of secondaries as a strategy, which tends to mitigate what they call the ‘J-curve,'" he says. "It provides diversification and has attractive returns historically as an asset class."

Hear more on Japanese investment strategies at the AVCJ Forum 2011 held in Hong Kong next week. For more information visit www.avcjforum.com.

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