Japan pension funds boost alternative assets in yield hunt, Mizuho says
Japanese pension funds are showing a growing appetite for investing in real estate and corporate debt as they seek higher returns in alternative assets amid ultra-low yields, the head of Mizuho Financial Group’s trust banking arm said.
But the famously conservative investors probably won’t want a bite of SoftBank Group Corp’s new Vision Fund, Tetsuo Iimori, the chief executive of Mizuho Trust and Banking, told Reuters.
Years of ultra-low interest rates have forced the hand of Japan’s mammoth pensions funds, as they can no longer rely on domestic government bonds for their returns.
“In recent years, our pension fund clients have had no other choice but to invest in alternative assets,” Tetsuo Iimori, the chief executive of Mizuho Trust and Banking told Reuters.
“Pensions need to be managed in a stable way. But the problem is that there’s no yield.” Iimori made the comments in an interview last week that was embargoed for release on Tuesday.
Mizuho Trust, part of Japan’s third-largest lender, says about 25% of the assets it manages are now alternative assets. It doesn’t disclose the size of its total assets under management.
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