Nomura wins mandate from Japanese 'big four' pension

Japanese public pension plan, Chikyoren, has hired the firm to invest in domestic real estate after releasing an RFP for domestic and international real estate and infrastructure last July.

The $185 billion Pension Fund Association for Local Government Officials has selected Nomura Asset Management as one its domestic real estate fund managers.

The pension manager, known as Chikyoren, issued requests for proposals (RFPs) for external managers to provide it with investments opportunities in both domestic and international alternative assets last July. In March Chikyoren made its first manager selection, hiring Japanese bank Resona Bank, to make domestic real estate investments on its behalf.

In so doing it is followed in the footsteps of its far bigger contemporary, the Government Pension Investment Fund (GPIF) which put out an RFP in 2014, and before other 'big four' pension manager the Federation of National Public Service Personnel Mutual Aid Associations, which signalled its intent to invest in real estate back in October.

In its RFP, the investor did not disclose what proportion of its assets would be dedicated to real estate, but according to Yukihiko Ito, managing director at Asterisk, a placement agent based in Tokyo, Chikyoren is following GPIF`s basic asset allocation model, that means maximum 5 percent for alternative assets (real estate, infrastructure, and private equity). “As real estate has the largest market size in these three asset classes, we assume maximum 2-3 percent can be allocated to RE,” he explained.

The investor has also not disclosed which types of strategies it is considering, but it is understood it is just looking at core, long-term, income driven strategies only at the moment.

The last, and smallest of Japan's 'big four' — Mutual Aid Corporation for the Private Schools of Japan — have yet to put follow its peers in soliciting fund managers, but Ito assumed the pension manager will start after seeing some results by the other three public pensions.