The Government Pension Investment Fund (GPIF) has been increasing its exposure to alternative investments (infrastructure, private equity and real estate). To regularly and efficiently obtain detailed data on the investment performance of funds in the market, GPIF begins building a database on alternative assets.

Our 5th 5-year Medium-Term Target starting in FY 2025 stipulates that alternative investments should be made from the perspective of obtaining excess returns, and it is important for GPIF to select investment opportunities that are expected to generate excess returns compared to traditional markets.

As industry practice in the alternative investment market, the selection and evaluation of individual funds has primarily relied on qualitative assessments, with quantitative evaluations limited to comparisons among similar funds based on a narrow set of metrics (such as internal rate of return and investment multiples). In order to further increase the confidence in obtaining such excess returns, GPIF begins building a database that will accumulate the data necessary for advanced quantitative analysis.

Unlike traditional assets, such database is not common in the alternative investment market. Therefore, GPIF will need to directly collect data from individual fund managers (both overseas and domestic).

We have recently hired Eagle Investment System LLC (an affiliate company of The Bank of New York Mellon Corporation) as the vendor to collect data. Going forward, we will collaborate with them and, with the cooperation of the asset managers for each alternative fund, proceed with acquiring the data.

Source: GPIF