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This is the 5th interview with a Japanese asset owner to appear on II Innovation. The other 4 interviews are:
Kunihiko Ogura is the executive director of the Mitsui & Co. group pension fund. The Mitsui & Co. Group Pension Fund, a defined benefit fund serving nearly 10,000 employees in 73 group companies, comprises 25.7 billion JPY in assets under management (end of March 2021) with assumed interest rate and expected return of 2.5%. . The asset mix of the pension fund is 40% national bonds, 10% multiple assets, 10% general life insurance account, 7.5% national stocks, 7.5 % foreign equities and 25% alternatives.
The fund generates income through aggressive investments in alternatives such as private debt, private equity, domestic and foreign real estate, as well as debit and equity stakes in infrastructure.
Given the long-standing and persistent environment of low inflation and low growth in developed countries, we expect returns on the four traditional assets to decline. In the meantime, we rely on illiquid assets as a stable source of income, although we are not increasing our holdings at this time.
Management history: Keep a sense of balance and curiosity
I joined Mitsui & Co. in 1980 and was assigned to Sales Accounting, as it was called then. I was in charge of accounting and finance in various locations, in various positions in Japan and overseas. In 1998, I was assigned to the Project Finance department, which financed the development of natural resources, infrastructure and other areas managed by Mitsui & Co. I was involved in negotiations with financial institutions to finance various projects of development. Having participated in the development of infrastructure, I now understand the attractiveness – and the risks – for investors of infrastructure financing.
I then joined the Finance Division of the American subsidiary of Mitsui in New York, where I provided financing for all of North America. I was there during the global financial crisis of 2008 when the liquidity in the financial markets simply evaporated for an entire month. For a while, it was almost impossible to organize any kind of funding. It was scary to see the market without liquidity. I had never seen anything like it.
Upon my return to Japan, I was assigned to a related real estate subsidiary and other companies before being appointed to Mitsui & Co. Group Pension Fund in 2017. My previous experience in the market had been on the purchasing side. , but in this move, I changed to investment operations. I look at the same financial markets as before, but my thinking is very different now.
The Fund invests in private REITs, but due to COVID-19 it is difficult to get an accurate picture of what is really going on in the real estate market based solely on numbers. So I try to understand the market as a whole by looking behind the statistics – for example, by directly collecting frontline voices using my old experience in the real estate market. What I appreciate in my work is having a sense of balance and curiosity.
Learn more about Japanese asset owners.
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