Wall Street Journal: Japan’s Pension Fund Plows Into Real-Estate Investing
According to The Wall Street Journal:
Japan’s government pension fund, the world’s largest with $1.25 trillion in assets, is making its biggest push ever to expand its real-estate portfolio.
The Government Pension Investment Fund in April asked asset managers around the world to submit proposals to run portions of the fund’s real-estate investment portfolio. The request was part of a broader move by the fund to expand into so-called alternative assets including infrastructure and private equity.
Foreign investors partly are motivated by higher yield in a global market where interest rates are low or even negative, as is the case in Japan. “There’s a tremendous incentive when bond yields are negative to find investments with a positive sign in front of it,” said Jim Sullivan, president of Green Street Advisors’ advisory group.
The decision by the Japanese fund to start out with a fund-of-funds strategy is unusual. Most new government-backed market entrants launch into real estate by buying property directly either by themselves or through special accounts set up by private-equity firms.
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