UPDATE 1-Japan GPIF in talks to invest in private equity -official

Thu Apr 10, 2014 7:09am EDT
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* GPIF may add alternative asset category in its portfolio

* GPIF could potentially enter alternative by itself

* To invest in infrastructure with Canada's OMERS, Japan's DBJ (Adds comments, details)

By Chikafumi Hodo

TOKYO, April 10 (Reuters) - Japan's $1.26 trillion public pension fund, the world's largest, is looking at alternative assets, a senior official said on Thursday, as it seeks to diversify its holdings and generate higher returns to finance a rapidly ageing population.

The Government Pension Investment Fund, known as GPIF, is in talks with several global private equity investors to increase its exposure to alternative assets after reaching an agreement in February to invest in infrastructure.

"Currently, beside infrastructure and specifically on joint private equity investments, we are holding discussions with several global investors," Tokihiko Shimizu, director-general of GPIF's research department, told the Global Alternative Investment Forum in Tokyo.

The public fund could expand its asset from the current five conventional categories of domestic bonds, domestic equities, foreign bonds, foreign equities and short-term assets, Shimizu said.

"We cannot forget our obligation to provide an explanation to the general public about the scale and the purpose of our investments. If we think about this, our basic idea is to treat alternatives as an independent asset class," Shimizu said.   Continued...