TOKYO: Japan Post Bank Co Ltd plans to allocate “a few hundred billion yen” toward alternative assets such as private equity, real estate and hedge funds this business year, its chief investment officer said on Tuesday. Katsunori Sago, who is tasked with improving returns on the former state-owned behemoth’s $2 trillion assets, also told Reuters in an interview he does not expect the yen to weaken this year. Market players will closely watch how Sago, a former Goldman Sachs executive, diversifies Japan Post’s portfolio, once mostly comprised of Japanese government bonds (JGBs).
Its need to find new revenue sources beyond JGBs has become acute after the Bank of Japan introduced negative interest rate this year. “Clearly, we cannot invest in interest rates markets. In Japan, interest rates markets are very big and it is not easy to give up on them. But if you look around the world, there are many other markets that have depth. We should steadily build up those assets in our portfolio,” Sago said. For diversification, he said the focus would be on private equity, real estate and hedge funds, in that order.
