Japan's Government Pension Investment Fund announced a restructuring of its manager lineup for active foreign equities, with 19 new mandates heavily weighted to U.S.-based money managers.
The contracts, awarded in late October, were announced by the pension fund on Tuesday. The fund had ¥192.1 trillion ($1.33 trillion) in assets as of Sept. 30.
The North American fund managers that garnered mandates, either as advisers or subadvisers, were: BlackRock; Fidelity Institutional Asset Management; Brandywine Global Investment Management; CIBC Asset Management; J.P. Morgan Asset Management; Manulife Investment Management (US); Neuberger Berman; Putnam Investments; T. Rowe Price Associates; Wellington Management Co.; Applied Finance Capital Management; Columbia Threadneedle; DuPont Capital Management Corp.; and Jacobs Levy Equity Management.
BlackRock, T. Rowe and J.P. Morgan won two GPIF mandates each.
The list of 19 mandates also included European fund managers Amundi Asset Management US and Impax Asset Management.
A GPIF spokeswoman said details regarding the size of the mandates and their respective benchmarks would only be released when the fund's annual report for the fiscal year ending March 31, 2023, comes out in July.
Ueda Eiji, chief investment officer, warned in GPIF's annual report for the fiscal year ended March 31 that changes to the fund's approach to active foreign equities would be forthcoming following underperformance by its seven incumbent active managers. GPIF had 2.37% of its portfolio — or ¥4.7 trillion — allocated to active foreign equities at fiscal year end, with weak performance prompting the withdrawal of roughly ¥2 trillion for risk management reasons during the year.
Looking ahead, "to avoid a concentration of fund allocations and to achieve diversification effects in the equity portfolio, it is necessary to increase the number of active funds GPIF employs," he wrote. "For this purpose, GPIF has proceeded with the selection of active funds in the North American market, which offers the greatest number of options."
As of the March 31 close of the latest fiscal year, GPIF listed seven active foreign equity managers: Allspring Global Investments, MFS Investment Management, Intech Investment Management, Walter Scott & Partners, Baillie Gifford Overseas, UBS Asset Management (U.K.) and Lazard Asset Management.
The GPIF spokeswoman declined to comment regarding how many of the prior year's seven incumbents continue to actively manage foreign equities for the fund this year. She likewise declined to say whether the spate of new mandates revealed Tuesday pointed to a reversal of the outflows from actively managed foreign equities seen during the prior year.
