In January, Schroder Real Estate (Schroders) made a key new hire, appointing former Mitsui Fudosan executive Makoto Fukui to the newly created position of director of strategic partnerships. In doing so, the London-based global asset management company made it clear that it was keen not to miss out tapping a large new source of capital: Japanese institutions.
Schroders' new hire comes on the heels of one Japanese institutional giant sounding out its interest in overseas property investing late last year.
The Federation of National Public Service Personnel Mutual Aid Associations, one of Japan's 'big four' pension funds, issued requests for proposals (RFPs) last October for external managers to provide it with its first investments opportunities in alternative assets.
In its RFP, the investor, known in Japan as KKR, did not disclose what proportion of its assets would be dedicated to alternatives. However, KKR, which currently is responsible for approximately $65 billion in assets, is expected to initially
allocate up to 5 percent. That would theoretically mean as much as $3.25 billion dedicated to alternatives investments.
KKR is following in the footsteps of its far bigger contemporary, the Government Pension Investment Fund, which signaled its intent to invest in alternatives in 2014 and is currently hiring executives to carry out its strategy.
In his new role at Schroders, Fukui will focus particularly on Japanese capital as he seeks to develop partnerships, joint ventures and separate account mandates with investors.
“We've hired Makoto to help us access the Japanese market that much better,” Chris Ludlam, Schroders' head of real estate capital, told PERE .
“He's got 19 years at Mitsui Fudosan, 10 of which were in Japan, so he's well-connected to access the significant amount of capital which we believe is looking to get invested into the European markets.”
With market sources expecting several big moves to be made this year by Japanese public pensions, Schroders will be hoping for first mover advantage.