Japan’s public pension fund has hired a London-based private equity executive for its investment committee, as Prime Minister Shinzo Abe aims to make the fund more capable of riskier investments and less concentrated in government bonds.
The $1.25 trillion Government Pension Investment Fund (GPIF) said Hiromichi Mizuno, a partner at Coller Capital which invests in the private equity secondary market, was appointed for a two-year term effective Friday.
He replaced Kimikazu Nomi, CEO of a state-backed investment group called Innovation Network Corporation of Japan and whose term expired earlier this month.
Mizuno brings extensive overseas investment experience to the eight-member committee, which is comprised mainly of economists and academics. His firm, Coller Capital, invests in the secondary market and allows private equity investors to liquidate their stakes early.
Prior to joining the firm in 2003, he held senior roles as head of private equity investment and Japanese corporate finance divisions in New York at the former Sumitomo Trust & Banking.
Mizuno will continue in his current job in London and travel to meetings in Tokyo, a GPIF official said. All of the committee’s members hold day jobs elsewhere.
The latest appointment comes after the government overhauled the fund in April by hiring new committee members and shrinking its numbers to eight from 10.
Abe’s government has been pressing the fund, which manages reserves for the national pension system and is the world’s largest, to shift more of its portfolio into stocks and other risk assets and away from the paltry yields of Japanese government bonds (JGBs).
The 10-year JGB currently yields less than 0.6 percent.
It is hoping the fund can boost its investment returns for the nation’s burgeoning number of retirees. Since the 2009/10 fiscal year, it has been paying out more in benefits than it has received in contributions due to the rising number of retirees as Japan’s population rapidly ages.
The fund had 53.43 percent of its assets in domestic bonds at the end of March, 15.88 percent in Japanese equities, 10.66 percent in foreign bonds, 15.03 percent in foreign equities and 5 percent in short-term assets.
($1 = 101.3000 Japanese Yen)
(Reporting by Ritsuko Ando; Editing by Christopher Cushing)
Photo courtesy of Shutterstock.
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