Japan panel to review GPIF, other public funds to meet on July 1-sources

TOKYO, June 27 Thu Jun 27, 2013 5:53am EDT

TOKYO, June 27 (Reuters) - A Japanese government panel to review the investment strategy of public funds, including the world's largest public pension fund Government Investment Pension Fund, will hold its first meeting on July 1, sources familiar to the matter said on Thursday.

A growth strategy outlined earlier in the month by the government of Prime Minister Shinzo Abe has sought to mobilise public savings to support an aggressive growth agenda aimed at defeating years of deflation and sluggish economic growth.

GPIF and other Japanese public funds, such as Federation of National Public Service Personnel Mutual Aid Association, collectively hold $2 trillion in assets.

A seven-person panel is to be headed by University of Tokyo professor Takatoshi Ito.

The panel members, yet to be announced, will consider how to improve returns on investments by raising exposure to risk assets such as equities and foreign assets as Japan's working population ages and payouts increase, sources said.

The panel is scheduled to reach a conclusion by the autumn and aims to implement proposals by April 2015 in line with the Abe administration's growth strategy plan, the sources said.

GPIF Chairman Takahiro Mitani told Reuters in an interview on Wednesday that the Abe government appeared determined to shake up the administration and investment policies of GPIF, which holds $1.2 trillion in assets.

"All we can do right now is calmly wait for the outcome of the panel," Mitani said. "We'll obey the government's decision if it decides to change the law or the framework for us to be more aggressive."

Earlier in June, GPIF raised its Japanese stock allocation to 12 percent of its portfolio from 11 percent, while lowering its allocation to Japanese government bonds to 60 percent from 67 percent, the most significant shake-up of its portfolio strategy since the fund was formed in 2001.

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