TOKYO May 23 KKR & Co is calling on
Japan's public pension fund, the world's largest, to start
investing in private equity funds to boost returns and encourage
other institutional investors to seek higher-yielding
KKR Japan CEO Hirofumi Hirano said on Friday he would like
to team up with the Government Pension Investment Fund (GPIF) to
invest in Japanese companies directly, something that the $1.26
trillion fund has never attempted.
"If GPIF starts investing in private equities, that would
lead the flow of money from private pension funds," he told
Hirano's remarks come at a time when Japan's ruling Liberal
Democratic Party is preparing legislation to overhaul the
governance of GPIF and encourage it to move out of the kind of
passive, low-risk investment in yen bonds that it has followed
for the past decade.
KKR last year raised a record $6 billion for its Asian II
fund, which invests in Asian companies, but none of the funding
came from pensions in Japan, Hirano said.
GPIF's target return is 1.6 percent over the nominal wage,
while private equity funds typically offer more than 10 percent
"Some 40 percent of our Asian II fund came from pension
funds overseas. I wish there had been money from Japanese
pension funds as well," Hirano told a group of reporters.
Tokihiko Shimizu, director-general of GPIF's research
department, said last month that the public fund 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.
(Reporting by Junko Fujita)