Japan's GPIF gives investment board control of portfolio decisions

Fri Aug 8, 2014 2:08am EDT

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Aug 8 (Reuters) - Japan's public pension fund has given its investment board control over key portfolio decisions - sharply limiting the powers of the institution's president - as the world's largest pension fund prepares to invest more in stocks and other risk assets and pull back from Japanese government bonds.

The decision by Japan's Government Pension Investment Fund, known as GPIF, was made on Tuesday and announced on Friday in a posting on the fund's website.

Under GPIF's previous governance rules, basic portfolio allocation decisions were left to the fund's president, Takahiro Mitani.

The change announced on Friday means that the institution's eight-member investment board will have the power to review and approve any such changes to the model portfolio that guides investment decisions for over $1.2 trillion in assets.

Prime Minister Shinzo Abe has been pushing GPIF to invest more in risk assets and less in domestic bonds in order to boost returns.

GPIF plans to boost the weighting of Japanese stocks in its target portfolio to more than 20 percent from a 12 percent target, two people with knowledge of the ongoing review told Reuters on Thursday. (Editing by Kevin Krolicki and Chris Gallagher)

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