NEC hires JPMorgan for overlay

Increased foreign equities exposure requires a more strategic approach to currency hedging.

The Ñ661 billion $5.5 billion Pension Fund of NEC Corporation is now hiring JPMorgan Fleming as a currency overlay strategist to cover its burgeoning exposure to international equities, says Goichi Ohno, executive director in Tokyo.

The fund faces a Ñ114 billion deficit between what it has promised employees in its defined benefit retirement plan and the assets it is managing - a typical scenario for Japanese companies, which until the mid-1990s had their hands tied by strict regulations about how they could manage their investments.

Since NEC was allowed to establish its own asset allocation five years ago, it has gone heavily into equities and global investments in a search for higher returns to...

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