Japan Post Bank, the country's biggest institutional investor with more than ¥200 trillion ($1.67 trillion) in assets, has lived in the shadow of the ¥141 trillion Government Pension Investment Fund's aggressive move into risk assets over the past year. Money managers say that could be about to change.
Listed Nov. 4 on the Tokyo Stock Exchange, JP Bank — which is restricted from lending the more than ¥175 trillion in deposits it collects from 24,000 post offices throughout Japan — must rely mainly on its skills as an institutional investor to reward its shareholders.
That makes the bank more like a sovereign wealth fund than a typical financial institution client, said a senior Tokyo-based executive with a global money management heavyweight, who declined to be named.
JP Bank's first quarterly earnings announcement as a listed company, on Nov. 13, showed the giant fund continuing to move relatively quickly in diversifying its fixed-income exposure.
Allocations to externally managed “investment trusts,” focused on offshore fixed income, rose by two percentage points in the three months ended Sept. 30 — or more than $30 billion — to 10% of JP Bank's overall portfolio.
A JP Bank spokeswoman said the bank doesn't provide a breakdown between actively and passively managed investment trusts.
The bank's direct investments in foreign bonds, a separate category, edged up to 9.89% from 9.83%. Both increases came at the expense of the bank's holdings of Japanese government bonds, which tumbled four percentage points to 45.25%.
Money management executives in the region, who declined to be named, said there have been enough active mandates in the mix to make JP Bank their most important client over the past year or so.
Having JP Bank as a client has effectively been what separates the winners from the losers when it comes to asset gathering this year, said the Tokyo-based head of one global money management firm.