Japan’s GPIF awards global infra FoF mandate to Pantheon

This is the second infrastructure mandate awarded by the world’s largest pension, as it plans to spend more on alternative assets.

The Government Pension Investment Fund of Japan, the world’s largest pension of 162 trillion yen ($1.51 trillion; €1.23 trillion) in terms of AUM, has awarded its second global infrastructure mandate to Pantheon as its fund of funds manager.

The pension fund also appointed Tokyo-based Nomura Asset Management as a gatekeeper for Pantheon’s mandate, with responsibility to conduct pre-investment due diligence and post-investment collaborations for infrastructure deals.

The appointment is the result of a request for proposals GPIF launched in April 2017 as it seeks to increase its exposure to alternatives – including private equity, infrastructure and real estate – to five percent of its total portfolio. As of December 2017, GPIF’s allocation to alternatives stood at 0.1 percent.

The pension fund announced its first global infrastructure mandate in January, appointing StepStone Infrastructure & Real Assets as its FoF manager and Sumitomo Mitsui Asset Management as the gatekeeper.

The managers are mandated to help GPIF pursue fund investments and co-investments in core and brownfield strategies, primarily in developed markets, but the pension fund declined to comment further. Pantheon had not responded to queries by the time of publication while Nomura declined to comment.

A spokeswoman for the pension fund told Infrastructure Investor that asset managers can apply on GPIF’s asset manager registration system at any time, a system the pension fund launched in April 2016, initially intended to serve traditional asset classes.

“Every four years we have revised our structure of each asset class manager, based upon the investment performance of the preceding three years,” GPIF wrote in a January 2017 presentation. “Under this approach, new managers had to wait for maximum four years to be adopted in our portfolio. We recognised potential opportunity losses and decided to introduce the asset manager registration system.”

This system allows more flexibility to employ new asset managers, GPIF’s spokeswoman explained. She added that the pension will disclose the AUM of each mandate in its 2017 annual report, which will be published in July.