Ranking and tables GPIF total assets 2001-12 GPIF portfolio by investment category 2010-12 GPIF portfolio by investment type and manager 2010-12 Asset managers by GPIF assets under management 2010-12
Asset managers by % growth in GPIF assets under management 2010-12
A move by the Government Pension Investment Fund to bring more of its passively managed domestic bond portfolio in-house together with a jump in its short-term holdings, also directed internally, have made GPIF’s own team its biggest asset manager. Over 35.4 trillion yen of the Fund’s 113.6tr yen portfolio is now handled in this way.
At number two in the overall league tableat the 31 March year-end are the combined businesses of Sumitomo Trust & Banking and Chuo Mitsui Asset Trust & Banking — which did not actually merge as Sumitomo Mitsui Trust Bank (SMBT) until 1 April. This institution now manages 21.9tr yen of the Fund’s assets.
SMTB also comes top in five of the eight individual portfolio categories. The two in which it did not prevail are passively managed international stocks and actively managed international bonds. The premier slot in the former is held by Mizuho Trust & Banking, a move up from the fourth rung it occupied last time, and in the latter by BlackRock.
The US firm now has 11.otr yen of the Fund’s treasure under its belt. It also did well in the actively managed international stocks category, where it was placed second after Amundi, as well as in passively managed international bonds and domestic stocks.
Top gainer was Daiwa SB Investments which, although it came in a lowly 23rd overall (up from 28th last time), saw a 36% jump in the value of the Japanese equities it actively manages for GPIF.
The rankings are derived from the Fund’s recently published annual report by the Japan Pensions Industry Database which is associated with this blog. The Government Pension Investment Fund is the world’s largest institutional investors according to Towers Watson.
The shift to managing bonds in-house also saw the total for Sumitomo Mitsui Trust Bank down by 14%, or 21.9 trillion yen, on the combined total for Sumitomo Trust & Banking and Chuo Mitsui Asset Trust & Banking in the previous year.
The other big trust banks Mizuho T&B, Mitsubishi UFJ T&B and Resona Bank, which rank respectively at fourth, fifth and sixth overall, saw smaller falls. Drops at these institutions were inevitable given the size of the business they handle for the Fund which now in its divestment stage, paying out to beneficiaries more than it receives in contributions income.
Since passively managed domestic bonds and short-term assets are, together with redemptions from FILP holdings, the categories from which these payouts most likely come, it makes sense to handle them in-house.
State Street ranks at seventh on the overall list but foreign firms are otherwise clustered at between 14th (Amundi) and 27th (Henderson) with Daiwa SB the only domestic interruption.
A rare glimpse into the size of Mizuho T&B’s and Mitsubishi UFJ T&B’s asset management businesses is also provided by GPIF’s annual report. Neither of these giants is a member of the Japan Securities Investment Advisors Association, Japan’s only source of data on pension assets under management collected on a consistent basis, and so submits no numbers to it.
The same used to be true of Chuo Mitsui Asset Trust & Banking — the numbers for which will presumably be included in Sumitomo Mitsui Trust Bank’s JSIAA filing from now on.
Chuo Mitsui Asset’s merger with Sumitomo Trust & Banking to form Sumitomo Mitsui Trust Bank was the final move in the repeated waves of restructuring which have reduced 18 banks to five since 1996. It was then that Fuji Bank’s absorption of Yasuda Trust & Banking, which had long-running non-performing loans problems, gave a foretaste of the future.
During this time the trust banks struck up or extended ownership and/or distribution ties with foreign firms.
Mitsubishi UFJ T&B now owns 15% of Scotland’s Aberdeen Asset Management, Mizuho T&B owns 2% of the USA’s BlackRock and one of Sumitomo Mitsui Trust Bank’s forerunners, Mitsui Asset T&B, has a ‘strategic tie-up with the UK’s Standard Life Investments. The other, Sumitomo T&B, holds 40% of New Smith Capital Partners. While New Smith’s HQ is in Tokyo it was started by mostly expatriate former employees of Merrill Lynch which in 1995 acquired the firm of Smith New Court,
Going the other way, France’s Credit Agricole — which holds 50% of Amundi — has increased its stake in Resona from 0.96 percent to 3.92 percent .
The restructurings started a year after a rolling deregulation of asset management began being moved into place and those foreign firms who were not preoccupied with mergers of their own were able to take full advantage.
With the Japanese banking sector now very strong, the roles are becoming reversed for asset management groups which are part of relatively less vigorous foreign financial conglomerates.
Today the question looming for GPIF is how long it can keep ambitious politicians and civil servants from interfering in the way it manages its assets. A posting on this will appear here soon.
© 2012 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes commitment, money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com.
This blog would not exist without the help and humour of Diane Stormont, 1960-2012
