GPIF’s search for new real estate boss is a ‘top priority’

Japan’s Government Pension Investment Fund is actively hiring for a new head of real estate, a role that has been vacant since April this year.

The world’s largest pension fund, which has $1.4 trillion in total assets, is looking for a senior investment professional with significant experience in both Japanese and overseas real estate markets, particularly in North America and Europe, according to a LinkedIn post by Yoshitaka Todoroki, managing director at GPIF’s private market investment department and head of private equity and infrastructure.

The investor is seeking a Japanese national or an overseas professional who is fluent in Japanese to conduct business in the country. As the head of the real estate investment group in the pension fund’s private market investment department, the winning candidate will report to Todoroki and be based in GPIF’s office in Tokyo.

Todoroki has juggled the dual roles of managing director of private market investment and acting head of real estate since GPIF’s former real estate boss Hideto Yamada left to join CapitaLand Investment as head of Japan in April 2023. Todoroki called hiring Yamada’s successor “a top priority” of the firm’s recruitment activity in the private market space.

“I look forward to receiving direct contact from people who are interested in the position or contact from fellow market participants who know people [who] qualify for the position,” he wrote in his post.

The Japanese pension giant first started investing in private real estate in 2017 via its “multi-manager strategy.” Yamada was hired the same year as the investor’s head of real estate to grow its portfolio in the asset class. Before joining GPIF, he spent eight years as managing director at Mitsui Fudosan, leading the Japanese firm’s UK business. Under his six-year leadership at GPIF, the pension fund’s real estate assets under management had grown to ¥919 billion ($6.5 billion; €5.9 billion) as of March 2023.

Last month, the investor also revealed it had agreed to invest $500 million to Blackstone Real Estate Partners X, marking its first direct commitment to a private equity real estate fund, according to its latest annual report. Apart from that, GPIF is also an investor in three fund of funds managers for real estate: Mitsubishi UFJ Trust Bank, CBRE Investment Management and LaSalle Investment Management.

According to the report, the pension allocated 45 percent of its real estate portfolio to the US, followed by 25 percent to Japan, 8 percent to the UK and 7 percent to Australia. Meanwhile, logistics and offices were the pension’s two largest sector exposures, which together made up 72 percent of the investor’s portfolio. However, GPIF also reduced its exposure to office from 32 percent last year to 28 percent this year.

As of March 2023, the pension’s domestic real estate investments and overseas property investments generated IRRs of 7.29 percent denominated in yen since 2017 and 6.22 percent in US dollars since 2018, respectively.

GPIF’s growth in private real estate is part of the fund’s bigger push to diversify its portfolio by tapping into alternatives. “Against the backdrop, we are trying to increase our investment exposure to private market assets that are supposed to generate attractive investment returns in the long run,” Todoroki said in his LinkedIn post.