JapanÆs biggest investor shakes up fund managers

The GPIF is troubled by portfolio æstyle driftÆ as it seeks to create active satellites around a passive core structure.

Asia's biggest institutional investor, the Ñ26 trillion $208 billion Government Pension Insurance Fund, which administrates assets for Japan's social security system, is engaged in a radical overhaul of its fund management structure, says Noboru Terada, executive investment officer.

The fund's biggest issue is the review of its management structure, which is our first attempt as the 'new Nempuku', he says, referring to the nickname of the original body managing social security assets.

In April 2001, the Pension Welfare Service Public Corporation Nempuku was reorganized in the face of mounting losses. By 2000, according to Cerulli Associates, Nempuku had a Ñ1.4 trillion deficit, because technically its assets were borrowed from an arm of the Ministry of...

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