Posted inPeople Moves

GPIF appoints PE exec

Japan's $1.2trn Government Investment Pension Fund has appointed Hiromichi Mizuno, a partner at Coller Capital, as its first CIO following the announcement of more aggressive allocation targets.
Mizuno, who was appointed to GPIF’s investment committee in July, will assume his role as executive managing director (chief investment officer) on 5 January 2015, the fund said in a statement. 
He will resign his positions on GPIF’s investment advisory committee and as partner at UK-based Coller Capital.
Mizuno’s appointment comes just after the fund announced an unprecedented shift in allocation targets, including exposure to alternatives like private equity from zero to 5%.
The fund’s president, Takahiro Mitani, has said in past interviews that the fund has a keen interest in the potentially higher returns from alternatives such as private equity, real estate and infrastructure.
GPIF has been under government pressure to adopt a more aggressive investment strategy in order to meet pension obligations for Japan’s aging population.

Muted equity weighting 

GPIF also hiked domestic and foreign equity exposure to 25% from 12% allocation (for each) while cutting positions in domestic bonds.
Katsunari Yamaguchi, President of Ibbotson Associates Japan, a Morningstar subsidiary, said a closer look reveals that the fund is not actually doubling its exposure to equities.
GPIF’s maximum equity exposure under the old allocation targets is 18% (12% with an allowance of plus or minus 6%), 
Yamaguchi said the fund’s actual exposure as of June this year was already 17%, closer to the new 25% target. 
“GPIF is not necessarily going to massively buy equities. They just they let the current holding appreciate [as the stock market rises] and that will mean they soon exceed 18% of total assets. So they just raised the bar to 25% allocation.
The same thing applies to foreign equity purchases, he said. 
“The increase to 25% [from 12%] seems like a massive move. But they are calculating [foreign equity exposure] in terms of Japanese yen, which has depreciated.”
By converting dollars from foreign equity investments to Japanese yen, their weighting will appreciate in yen terms. 
“So it seems the fund is doubling their exposure, but actually it is not.”

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