GPIF, APG team up for strategic infrastructure investments | Alternatives

Japan’s Government Pension Investment Fund (GPIF) and APG Asset Management have announced a landmark joint investment programme that will focus on strategic infrastructure investments in developed markets overseas.

This venture marks the first time these leading pension fund investors, with a combined asset management portfolio of over $2 trillion, are aligning their investment capabilities.

The size of the investment platform has not been disclosed.

Global infrastructure projects aimed at advancing digital connectivity, fostering energy transition towards a fossil-free future and spearheading decarbonisation efforts in transportation will be the focus, an APG spokesperson told AsianInvestor.

COLLABORATION

The collaboration brings together two large pension fund investors in the world.

As the largest pension provider in the Netherlands, APG manages the pensions of 4.8 million participants with assets totaling approximately €569 billion ($617 billion) as of December 2023.

Japan’s GPIF, the world’s largest pension fund, had around 225 trillion Japanese yen ($1.5 trillion) in assets under management as of December 2023.

“GPIF has been increasing exposure to alternative investments (infrastructure, private equity, and real estate) in expectation of greater portfolio diversification, seeking to improve investment efficiency and further ensure the stability of pension finance,” said Masataka Miyazono, president of GPIF.

Masataka Miyazono
GPIF

“As part of our recent partnership with APG, we launched a joint investment program in the infrastructure sector. As the leading public pension fund in each country, we are pleased to be at the start of a long-term partnership with APG,” said Miyazono.

This programme is expected to set a new standard for international pension fund cooperation, with a clear focus on delivering sustainable, long-term returns.

APG had an infrastructure portfolio of around €25 billion ($27 billion) at the end of June 2023.

GPIF’s infrastructure portfolio was valued at 1.45 trillion yen ($9.5 billion) at the end of March 2023.

MORE PARTNERSHIPS

Infrastructure is an increasingly preferred alternative asset class among asset owners in the region. 

The Indonesia Investment Authority (INA), the nation’s sovereign wealth fund recently announced it is joining forces with Global Infrastructure Partners (GIP), a US-based infrastructure investment group with over $106 billion in assets that was recently acquired by BlackRock, to scout for and establish high-quality infrastructure projects within Indonesia.

INA, which counts green energy and infrastructure among its key focus areas, said this collaboration will harness the wealth fund’s solid grasp of the local Indonesian market and GIP’s broad international experience in infrastructure development.

Also read: APG, ADIA invest in Indonesian road infrastructure

Since its inception in 2021, INA has also successfully partnered with a variety of asset owners, including APG Asset Management, channeling more than $3 billion into Indonesian infrastructure, aiming to oversee $24.5 billion in assets.

INFRA RESILIENCE

Infrastructure investment could potentially present investors with a trillion-dollar opportunity over the next decade according to Kyle Mangini, global head of infrastructure at IFM Investors.

Kyle Mangini
IFM Investors

The Australian pensions investor recently published its Global Infrastructure Outlook for 2024 which pointed out that infrastructure assets are becoming increasingly mainstream, attracting more capital and competition, and offering substantial opportunities due to the global energy transition and government policy support shifts.

Also read: Australian pensions investor sees trillion-dollar infrastructure boost from energy shift

The resilience of infrastructure investment was a key point from IFM’s report, stating that the asset class is being  increasingly recognised due to growing considerations for relative risk and return.

“Regardless of economic conditions, infrastructure has consistently delivered robust returns for investors’ portfolios,” said Mangini.