Japan Pension Giant to Appoint First CIO

The GPIF is to reorganise its internal investment structure.

The world’s largest pension is about to appoint its first CIO, according to sources close to the fund.

Hiromichi Mizuno is to take over the helm of the Government Pension Investment Fund (GPIF) this week, the Wall Street Journal reported.

Mizuno, who is currently a partner at UK-based private-equity firm Coller Capital, joined the $1.1 trillion public pension in July to sit on its investment committee.

The fund has been run by a hierarchy of senior management, but until now has not had a clear investment chief.

In a 2010 report on the fund, the Organisation for Economic Co-operation and Development (OECD) critiqued the unusual governance structure. “This legislative requirement impedes the clear separation of oversight and executive responsibilities between a board of directors on the one hand and a CEO (or/and CIO) on the other,” it said. “Rather, all oversight and executive powers within the GPIF are effectively concentrated in one person, the chairman.”

The organisation noted that in April 2010, the GPIF had 75 employees, compared to the Canada Pension Plan Investment Board—with much fewer assets—that employed 566 people.

The OECD suggested a new governance structure for the Japanese fund: “Separate operational and oversight functions within the GPIF, establishing a board of directors and a separate executive team led by a CEO and CIO, who are selected by the board following a hiring process based on transparent, professional (fit and proper) criteria.”

In terms of investment, the fund has been looking to shift its asset allocation away from its traditionally conservative portfolio. Its chiefs have announced moves to lower its domestic bond holdings in favour of domestic and international equities and a range of alternative investments.

Since 2009-10 it has been paying out more to Japan’s pensioners than it has been receiving in contributions from workers. In 2013 the fund registered an 8.6% return.

Related content: Private Equity Hire Signals Japan Pension’s Intent & Japan Pension Ponders Nikkei-Boosting Game-Changer

 

«