Japan’s Chikyoren reveals real estate portfolio

The $217bn public pension fund has so far invested in core real estate strategies and is now eyeing core-plus investments.

Japan’s Pension Fund Association for Local Government Officials, known locally as Chikyoren, made real estate investments with a total value of ¥27.2 billion ($242 million; €208 million) as of the fiscal year ending 31 March 2018, according to its latest annual report.

Of the total investments, ¥18.5 billion stems from domestic investments and the remaining ¥8.7 billion has been deployed in overseas markets.

The Japanese investor has so far invested in real estate through mandates given to different asset managers for domestic and overseas investments (see chart). It has committed capital to different core products, as per the annual report, which did not specify whether these investments were via fund structures or separate account mandates.

Chikyoren is also considering the possibility of investing in core-plus strategies, according to PERE data.

On 13 July, the pension fund also issued a new round of request for proposals for real estate managers in Japan and overseas markets. Apart from real estate, Chikyoren is also looking to award mandates to private equity, infrastructure and private debt managers.

Chikyoren, known as one of Japan’s “Big Four” public pension funds and the second largest after the $1.4 trillion Government Pension Investment Fund,  currently allocates 0.4 percent of its portfolio to alternatives. The maximum allocation for alternatives is set at 5 percent of its total assets, representing around ¥1.2 trillion of its ¥23 trillion in total assets under management, as of this March.