Japan’s newest LP giant taps ex-HarbourVest boss as alts head

The $87bn university endowment is tasked with generating returns to help fund Japanese science and tech research.

Japan’s new ¥10 trillion ($86.8 billion; €76.5 billion) university endowment fund has appointed a former HarbourVest boss to serve as head of global alternative investment, Private Equity International has learned.

Tadasu Matsuo joined the Japan Science and Technology Agency, which manages the fund, as managing director on 1 January, he told Private Equity International. Matsuo previously served as managing director and co-head of HarbourVest’s Japan office, having joined from Japan Post Insurance in April 2020, per a statement at the time.

A HarbourVest spokesperson confirmed Matsuo’s departure.

The university endowment has been on a mission to hire at least 20 to 30 alternatives specialists, chief investment officer Masakazu Kita told Bloomberg in August. Kita, a former manager at Norinchukin Bank, said the portfolio could include assets such as private equity, real estate and infrastructure.

The fund is intended to start investing by the end of March and is tasked with generating a 4.38 percent annual return, north of the average 3.7 percent return posted by Japan’s Government Pension Investment Fund, to help finance science and tech research each year.

University endowments tend to have pedigree when it comes to alternatives assets, representing nine of the 100 largest private equity investors globally, according to PEI’s Global Investor 100. The most bullish of these, Yale University, has allocated 41.6 percent – or about $13 billion – to the asset class.

Japanese LPs also represent a vast and comparatively untapped source of capital for managers globally, with GPIF – something of a bellwether for domestic investor appetites – having earmarked $6 billion for the asset class. That said, strict licensing requirements, strenuous reporting expectations and a bias for name-brand funds can make accessing this money a challenge, as Hiroshi Nishimuro, Monument Group’s Japan representative, noted in July.

Japan Post Bank – one of the country’s most bullish investors – hopes to reach ¥10 trillion of alternative assets under management by 2026, according to its latest Medium-Term Management Plan, published in May. The investor’s plans to date have been slow to realise, having accrued just ¥4.2 trillion of the ¥8.5 trillion three-year alts target it set in 2018, of which ¥2.2 trillion is held in private equity.