Japan's Government Pension Investment Fund is searching for managers to oversee the ¥156.8 trillion ($1.4 trillion) fund's cash holdings.
Interested parties should submit detailed descriptions of their approaches to managing cash in a negative rate environment, including the types of short-term financial instruments tapped. The RFP, available in Japanese, encouraged applicants to propose a broad range of financial instruments beyond widely used options such as Treasury bills, deposits, short-term corporate bonds and commercial paper.
GPIF held a record 9.1% of its total portfolio in cash as of Sept. 30, the pension fund said in its latest quarterly update.
The RFP said a briefing will be held at the GPIF's conference room at 1 p.m. Tokyo time Wednesday. Parties interested in attending should email their names and the names of their companies to GPIF before 11 a.m. on Wednesday.
Proposals are due by 4 p.m. Tokyo time on Jan. 16. The RFP said an initial group of applicants will be selected based on a review of their applications.
Separately, GPIF hired Mitsubishi UFJ Trust and Banking to manage a core domestic real estate fund-of-funds allocation.
A GPIF spokeswoman declined to say how big the mandate is, to avoid "influencing the market."
Mitsubishi UFJ Trust and Banking becomes the GPIF's first alternatives manager, confirmed the spokeswoman.
Since October 2014, when the GPIF announced a dramatic shift into risk assets from Japanese government bonds, the world's biggest pension fund has been slow to take advantage of its new asset allocation plan's 5% target for alternatives.
The fund's quarterly performance results announcements showed the weight of alternatives in its portfolio — invested in conjunction with other asset owners — accounting for a steady sliver of 5 basis points to 10 basis points of the total.
Tuesday's appointment marks the first result of a broad RFP the fund issued in April, seeking fund-of-funds managers for domestic and international real estate, private equity and infrastructure.
The domestic fund-of-funds allocation will be invested in unlisted real estate, the spokeswoman said.