AIC wins domestic PE mandate from Chikyoren

Government and corporate pension funds – except for the Government Pension Investment Fund (GPIF) – are required by law to operate through local gatekeepers rather than invest in private equity funds and limited partnership-type structures directly. This is the third PE mandate Chikyoren has issued in the last 18 months, with the others going to Sumitomo Mitsui Trust Bank and Mitsubishi UFJ Trust.

Since early 2016, the pension fund has selected 11 different gatekeepers to cover the alternatives space: three for domestic real estate and two for overseas real estate, one for domestic infrastructure and four for overseas infrastructure, and two for domestic private equity. Mitsubishi UFJ Trust has mandates for overseas infrastructure and domestic private equity.

Chikyoren operates a manager entry system that accepts registrations on a continuous basis. In July, domestic and overseas private debt joined real estate, infrastructure, and private equity in the system.

GPIF is seen as the key to accessing Japanese public pension money as smaller players often use it as a benchmark. The fund made a couple of initial forays into alternatives – forming an infrastructure partnership with Development Bank of Japan and Ontario Municipal Employees Retirement System (OMERS) and committing to an International Finance Corporation global fund-of-funds – before making its first call for applications from managers last year. It has since awarded several mandates.

As of July 2018, GPIF had JPY156.4 trillion ($1.39 trillion) in assets, while alternatives exposure stood at 0.13%. Should the upper limit be reached, JPY8 trillion could enter the asset class. While GPIF is by some distance Japan's largest pension fund, the eight funds sitting below it in the rankings had more than $600 billion under management between them at the end of 2016, according to Willis Towers Watson. Chikyoren is the largest of the eight.

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• Topics
• North Asia
• Fundraising
• LPs
• Advisory
• Pension Fund Association for Local Government Officials (Chikyoren)