Japan Post Insurance launches alternatives unit

The Japanese insurer’s decision to create an alternatives division follows sister company Japan Post Bank’s move last December to establish a private equity division, as part of its efforts to diversify beyond domestic bonds.

Tokyo-based Japan Post Insurance has launched an alternative assets division, according to a statement released on 27 September.

Japan Post Insurance, also known as “Kampo”, manages about $800 billion of assets and is the life insurance arm of the Japan Post Group of companies. The company offers a range of insurance products such as endowment, whole life, accident, and annuity across more than 20,000 postal offices.

It is unclear how much of Japan Post Insurance’s total assets will be allocated to alternative assets, which includes private equity, real estate, infrastructure, and hedge funds.

It is understood that the alternatives division will operate out of the insurer’s head office in Tokyo.

Japan Post Insurance’s move mirrors that of sister company Japan Post Bank, which established a private equity division in December last year with the aim of generating higher returns and diversifying beyond its domestic bond holdings, which have been hit by negative yields.

Japan Post Bank, which manages a portfolio of about $1.8 trillion, said it would allocate up to 5 percent or roughly $90 billion to alternatives. Earlier this year, the bank established a new division for real estate assets.

Both Japan Post Insurance and Japan Post Bank are listed on the Tokyo Stock Exchange and operate as separate entities.