Japan’s GPIF Looks to Emerging Public Equity Markets

Japan’s Government Pension Investment Fund (GPIF) is looking to invest in emerging markets in public equities. The insular investment fund has been investing in conservative Japanese fixed income assets, specifically government bonds. In December 2011, the fund had around 67.4% in domestic bonds. Recently, the GPIF finalized their selection of external fund managers and plan to start investing soon overseas in emerging markets. The amounts are relatively small for the GPIF, but may expand as they trial this strategy. Another concern the GPIF has is that the liquidity in emerging markets in public equities is smaller than advanced economies.

The GPIF recognizes the amount of asset sales needed to increase cash to repay pensions is getting larger. Japan has an aging population and a low birth rate.

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