Japan’s GPIF announces first global real estate manager

The world’s largest pension fund has appointed the first gatekeeper and funds of funds manager for overseas investments.

Government Pension Investment Fund (GPIF), the world’s largest pension fund with total assets under management of ¥158.6 trillion ($1.4 trillion; €1,2 trillion) has appointed Los Angeles-based investment firm CBRE Global Investors as its first ever manager for its long-awaited global real estate mandate.

Given GPIF’s scale and to-date lack of engagement in private real estate, the mandate is among the most eagerly anticipated by institutional investor in the sector’s history.

Besides appointing CBRE Global Investors GPIF also appointed Tokyo-based asset manager Asset Management One as its gatekeeper.

The real estate mandate is defined as a core strategy and will be carried out by CBRE Global Investment Partners, CBRE Global Investor’s entity for indirect real estate investment. It will be carried out according to GPIF definitions of global real estate markets split between US and non-US regions. That divide was explained last year at the pension fund’s request for proposals orientation for alternative assets fund managers.

In addition, GPIF is understood to be recruiting real estate staff. In February 2017, the pension fund announced Hideto Yamada as the new head of real estate. GPIF issued a call for proposals for real estate fund of funds managers in April 2017.

In June 2018, GPIF received regulatory clearance to participate in funds and other limited partnership schemes for alternative assets. The clearance will markedly help the pension fund’s efforts to increase its allocation towards alternative assets. Prior to that, the pension fund had only been able to invest in alternative assets through funds of funds and mutual funds because of statutory limitations.

After the regulatory clearance, GPIF issued a call for applications for alternative asset managers for limited partnerships across infrastructure, real estate and private equity.

GPIF is one of the largest investors in Japanese government bonds, which are “yielding close to nothing or minus,” according to one Japan-focused industry source. That has led the pension fund and other Japanese institutional investors, such as Japan Post Insurance, to increase their allocations to alternative assets, particularly overseas.

It is expected that GPIF will announce appointments of multiple additional fund of funds managers and gatekeepers for their global real estate investments. A GPIF spokeswoman declined to comment on further announcement plans.

You can hear direct from Hideto Yamada when he keynotes the PERE Investor Forum: Tokyo on 27 September. Find out more on the event website.