Albert Tan in PERE: Japanese Pensions Adopt Overseas Caution


Tokyo Marine, ASIN Employees Pension Fund and DIC Pension Fund are among a limited group of Japanese pension funds to have invested in overseas real estate. But the number will grow, delegates heard at the PERE Tokyo Forum, last week...

With the country’s largest pension fund, GPIF, expected to increase its alternative assets allocation in an upcoming portfolio announcement, Albert Tan, partner at law firm Haynes and Boone, LLP, said that the news will further encourage other pension funds to re-evaluate their real estate strategy.

Many Japanese investors have been slow in investing overseas because they have been burnt before, he said. As the country’s pension funds start to move their money into overseas property markets, they don’t want that to happen again.

Some, he felt, might continue to track a well beaten path of sticking to previous investment options. “The investment returns expected from a Japanese pension plan is around 3 percent, which they can easily get by investing in bonds and other fixed income securities,” he added. “They don’t need to take the risk of investing in real estate.”

Excerpted from PERE, September 25, 2014. To view full article, click here (subscription required).

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