Japanese pension fund Chikyoren has selected Mitsubishi UFJ Trust and Banking Corporation to manage its first domestic private equity allocation, according to an official statement.
The manager selection follows the requests for proposal for private equity issued by the Japanese investor in July last year, almost a year after selecting managers for real estate and infrastructure. UBS Asset Management was chosen as the Chikyoren’s international manager for real estate while JP Morgan Asset Management is its first manager for international infrastructure.
Mitsubishi UFJ, a wholly-owned subsidiary of Mitsubishi UFJ Financial Group (MUFG), has total assets of ¥45.7 trillion as of end-March 2016 and is one of Japan's largest trust banks. In August last year, the Chikyoren also hired the firm to manage its second global infrastructure allocation.
Mitsubishi UFJ has committed over $500 million to more than 50 private equity funds – mainly buyout funds in the Asia Pacific region – according to PEI data.
Chikyoren, or The Pension Fund Association for Local Government Officials, can allocate up to 5 percent of its $185 billion under management in alternatives assets. However, its exposure to alternatives will not be a separate allocation but will be part of its allocations to equities and bonds, both domestic and offshore.
As of end-FY 2015, the pension fund allocated 43.65 percent of its overall portfolio to domestic bonds, 11.96 percent to foreign bonds, 17.54 percent to foreign equities, 22.32 percent to domestic equities, and 4.54 percent to short-term assets.