Japan's GPIF targets new hires as part of investment strategy shift

According to Bloomberg, the $1.1 trillion fund will hold a private seminar next month to inform potential applicants of its plans to hire more professional money managers. Yasuhiro Yonezawa, chairman of GPIF's investment committee, is expected to outline both the fund's reforms and the kind qualifications it will look for in candidates.

The move comes as the fund prepares to diversify away from domestic bonds towards riskier assets such as domestic and foreign equities as well as alternative assets such as real estate and private equity. The target allocation for equities is now 50% - up from 24% - while alternatives are expected to account for up to 5%.

GPIF has already hired its first chief investment officer, a role filled by Hiromichi Mizuno - formerly a partner with Coller Capital - earlier this month.

As for the improving pay scales, calculations by Shinichiro Mori, a director in the planning section, show that GPIF will increase total annual compensation for its president to about JPY31 million ($260,000) - including salary, bonuses and allowances - from JPY18.9 million for the year ending March 31. Current President Takahiro Mitani will step down in March when his five-year term ends.

The greater pay flexibility - for which GPIF won approval last year - has also allowed the fund to provide annual compensation to the new CIO of about JPY30 million a year. Though an improvement, this is still below global market rates.

The California Public Employees' Retirement System (CalPERS), for example, was reported to have paid out a total of $9 million in bonuses in fiscal year 2014. The CIO alone received a $305,810 bonus in addition to his $412,039 base pay.

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