Japan’s Government Pension Investment Fund may be mulling changes to an alternatives investment program that’s been cautiously deliberate until now.

On April 20, the ¥177.7 trillion ($1.63 trillion) Tokyo-based giant made two separate announcements speaking to potential changes: the first was a callout for information from managers of domestic real estate, a sign GPIF could be moving beyond the fund-of-funds platforms it’s focused on in recent years to directly hire general partners; the second was a paper exploring ways to accelerate allocations via means such as private equity replication strategies.

A Nomura Research Institute paper, “Alternative Asset Replication Using Exchange-Traded Assets,” commissioned by GPIF and posted on the fund’s website, concluded that a portfolio of exchange- traded assets is capable of tracking the long-term performance of private equity benchmark indexes. Such strategies would open the door for institutional investors to “rapidly scale up exposure without worrying about illiquidity,” the Nomura report said.

An overview of alternatives investing GPIF posted on its website on March 26 showed infrastructure accounting for the bulk of the fund’s ¥944.5 billion of allocations as of March 31, 2020, at ¥545.1 billion, followed by ¥380.8 billion in real estate and only ¥18.5 billion — or less than 2% — in private equity.

Read more @Pionline