Japan’s Chikyoren kickstarts PE manager selection

The $185bn pension fund has issued a call for applications for domestic and overseas private equity fund managers.

Japan’s $185 billion Pension Fund Association for Local Government Officials, known locally as Chikyoren, has issued requests for proposals (RFPs) for private equity, a year after releasing RFPs for real estate and infrastructure.

An announcement in Japanese on the pension fund’s website says entry requirements for asset managers have mainly been relaxed. Those with assets under management under ¥100 billion ($993 million; €898 million) can now submit an RFP through a local fund manager or trust bank whose total assets are more than JPY 100 billion.

Chikyoren first issued an RFP for real estate and infrastructure in July last year and has since selected Japanese bank Resona and Nomura Asset Management as two of its domestic real estate fund managers.

According to a statement from placement agent, Asterisk Realty, Japan’s ‘big four’ public pensions – the Government Pension Investment Fund, the Federation of National Public Service Personnel Mutual Aid Association and Mutual Aid Corporation for the Private Schools of Japan – are likely to follow Chikyoren’s move.

Chikyoren has not set any target allocation to alternatives, a spokesperson from Asterisk said, but will most likely keep to the allocation target adopted by Japan’s largest pension fund, GPIF, which sets a 5 percent cap on alternatives investments.

According to a survey from JP Morgan Asset Management, Japanese pension funds are continuously increasing their exposure to alternatives and considering lowering their allocation to domestic bonds, as reported by Private Equity International.

Chikyoren manages assets for around 3 million local civil servants.