The number of Japanese institutional investors allocating up to 5% of total plan assets to private equity is expected to double to 28.6% in the next two to five years, while institutions allocating up to 10% to private equity will increase to 8.6% from 2.9%, according to a study by Adveq, a Swiss private equity fund of funds, and Kyoto University. The average private equity allocation, currently 0.4% of assets, is expected to increase to 1.3% in the next two to five years. Some 25.2% of Japanese institutional investors currently invest in private equity, of which 55.9% allocate less than 1% of total assets to the asset class. Most investors added the allocation after 2000, according to the study.
A total of 171 institutions, including life and non-life insurance companies, company pension funds and industry association pension funds, responded to the survey.