Japan’s Government Pension Investment Fund doubled its exposure to global infrastructure assets in the fiscal year ending March 2018, to JPY 196.8bn (USD 1.78bn) it said on Friday (6 July).
“We are proceeding with investment into airports (in the UK) from the fiscal year (ended March),” through the newly introduced fund-of-funds scheme, said GPIF President Norihiro Takahashi. He cited investments in the UK’s Birmingham and Bristol airports.
The JPY 156.4trn GPIF revealed that it has committed JPY 38.3bn to StepStone G Infrastructure Opportunities LP and JPY 10.7bn to Pantheon G Infrastructure Opportunities LP.
It also cited the Thames Water and Australia’s Port of Melbourne as examples of investments in specific overseas infrastructure assets.
The pension fund invested in these assets through a framework it launched in February 2014. Under the framework, GPIF teamed up with Canada’s Ontario Municipal Employees Retirement System (OMERS) and the Development Bank of Japan (DBJ) to co-invest in infrastructure assets such as power generation, electricity transmission, gas pipelines and railways in developed countries. Under this scheme, investments are channeled through unit trusts.
In May this year, GPIF gained the Japanese government’s approval to participate in limited partnership schemes, easing restrictions for it to invest via fund-of-funds or unit trusts only.
The UK’s share of GPIF’s infrastructure investments soared to 57% by end March 2018, up from 26% at end March 2017. This saw the shares for other countries decline: to 15% for Australia (from 27% last year); Sweden 15% (down from 25%); Spain 10% (from 17%) and Finland 3% (from 5%).
By sector, GPIF’s investments are in: port and harbor assets (27%), water and sewerage (24%), airports (21%), electric power distribution (18%) and oil pipelines (10%). GPIF did not disclose a sector breakdown last year.
At end March 2017, GPIF’s infrastructure investments amounted to JPY 96.4bn.
“I think it is okay to interpret we are in direction to expand” infrastructure investment, said Takahashi at a media briefing.