JPMorgan wins mandate from Japan’s Chikyoren

The $185bn pension fund has chosen to dedicate its first-ever commitment to infrastructure to overseas markets.

Japan's Pension Fund Association for Local Government Officials, known locally as Chikyoren, has selected JPMorgan Asset Management as its fund manager for overseas infrastructure. 

The announcement marks its fund commitment to the asset class. Chikyoren, which called for requests for proposals (RFPs) from infrastructure and real estate firms last July, has yet to select a manager to look after its exposure to the domestic market.

JP Morgan has a business platform operating in Japan, which Asterisk Realty, a Tokyo-based placement agent, believes was one of the key factors that put the firm ahead of rivals to manage Chikyoren's money.

The institution might select a few more fund managers for each asset class, Asterisk Realty said in a statement. Chikyoren didn't disclose any further information on its fund selection process. It is unclear how much the pension fund is looking to invest in the asset class. 

The step made by Chikyoren could have repercussions among other Japanese investors including pensions, regional banks and credit unions, encouraging them to invest more in overseas infrastructure, said a spokesperson from Asterisk Realty. 

Chikyoren is one of the “big four” public pension funds in Japan, which also include the Government Pension Investment Fund, Pension Fund Association and Japan Post Bank and Insurance. GPIF and Japan Post have also been looking to gain more exposure to alternative assets, including infrastructure, according to reports.

Chikyoren has also selected UBS Asset Management for overseas real estate investments, as well as Japanese bank Resona and Nomura Asset Management as two of its domestic real estate fund managers. 

The pension fund has recently issued RFPs for private equity, sister publication Private Equity International reported last week. Firms with assets under management under JPY100 billion ($980 million; €888 million) can now submit an RFP through a local fund manager or trust bank whose total assets are no less than JPY100 billion.