It had not happened since the financial crisis of 2008-2009. The Government Pension Investment Fund is one of the largest institutional investors in the financial markets. Despite the crisis, investments in Japanese start-ups will continue.
Tokyo () – On November 4, the Government Pension Investment Fund (Gpif) published economic data for the second quarter. For the third consecutive time, the report registers a loss to the government pension fund, something that had not happened since 2009, when the country was dealing with the global financial crisis. The GPIF is nicknamed the “whale” because it is the world’s largest pension fund and one of the largest institutional investors in the financial markets. With 192 trillion yen in assets (about $1.31 billion), the GPIF is worth close to Indonesia’s gross domestic product.
The figures released last week for the months of July to September they show total losses of 1,720 million yen, equivalent to 11,600 million dollars. Each of the four segments into which GPIF investments are divided, bonds and shares, both Japanese and foreign, were in the red and have lost 0.88% of their value.
The worst data was recorded by foreign bonds, with a negative balance of 764.4 billion yen that was lost due to the rise in interest rates applied by the United States Federal Reserve, which raised the yields of newly issued bonds and at the same time depressed the value of previously issued bonds.
However, the losses in the second quarter represent a deceleration with respect to the first, during which the pension fund had lost 1.91% of its value. In fact, between the months of April and June the value of the GPIF’s investments had already fallen by 3.75 billion yen (28.13 billion dollars). In the last quarter of 2021 the loss had been 1.1%.
The negative streak, however, does not seem to have stopped investments yet. In recent months, Nikkei magazine had revealed that the GPIF plans invest tens of millions of dollars in Japanese start-ups. This would be the first time at all for the government fund. To date, the participation of pension funds in the Japanese venture capital market represents only 3% of the total, while in the United States, for example, it is 32%.
If GPIF’s investments in Japan’s still underdeveloped startup ecosystem take hold, other pension funds could follow suit, thus reinforcing a positive trend for the entire Japanese economic system. On the other hand, boosting the emerging business sector was one of the objectives of the “new capitalismfrom Prime Minister Fumio Kishida. However, the specter of losses remains a concern that pension fund investors will continue to grapple with in the coming months.
