Japan Post Bank has selected Goldman Sachs Asset Management, UBS Asset Management and Blackstone Group to manage its first hedge fund-of-funds allocations, according to sources who declined to be named.
The giant, Tokyo-based financial institution, with assets of ¥204.9 trillion ($1.82 trillion) as of the March 31 close of its latest fiscal year, could announce the mandates as early as Friday.
Details — including the size of the allocations, the fees Japan Post Bank will pay and how much input Japan Post Bank's investment team will have in overseeing its hedge fund-of-funds investments — weren't immediately available.
A Japan Post Bank spokesman conceded that the firm is “preparing for investment in hedge funds,” but declined to provide further details, or confirm that GSAM, UBS and Blackstone had been selected. Spokesmen for UBS, GSAM and Blackstone declined to comment.
Industry veterans, who declined to be named, speculated that the fees Japan Post Bank will pay its managers could be on the low side, in exchange for mandates that could grow to billions of dollars.
The bank, which gathers deposits from Japan's country-wide network of post offices, listed its shares on the Tokyo Stock Exchange in November 2015. Under current regulations, Japan Post Bank cannot compete with private banks in extending loans, leaving it dependent on its skills as an institutional investor to support its share price.
Over the 12 months ended March 31, its holdings of Japanese government bonds, which saw yields dip into negative territory in January, plunged to ¥82.3 trillion, or 40% of its portfolio, from ¥106.8 trillion, or 51.8%, the year before.
Over the same period, its holdings of foreign securities jumped to ¥45.4 trillion, or 22.1% of its portfolio, from ¥32.9 trillion, or 15.9%.
