The Government Pension Investment Fund (GPIF) of Japan declared on Tuesday that it was investigating ways to diversify into illiquid assets like gold, farms, Bitcoin, and forests. In line with its goals for fiscal year 2023, it intends to conduct research and receive feedback on a number of investment-related topics. However, the proposal does not include a move into Bitcoin.
With over $1 trillion of assets under management, Japan’s Government Pension Investment Fund (GPIF) has announced its intention to investigate diversification possibilities. Apart from Bitcoin, it also includes traditional assets like gold and non-traditional assets like farms and forests. This investigation represents a significant possible shift in the investment approach of a fund generally associated with more conservative asset classes.
At the moment, GPIF is investing in real estate, infrastructure, private equity, domestic and overseas equities, bonds, and stocks. The latest release from GPIF is merely an information request; it makes no promises about the company’s future plans to diversify into other assets, such as Bitcoin. Rather, based on the information gathered, the company will decide whether to carry out additional studies.
In addition to academic research, analytical instruments, and indices, the fund is looking for fundamental data, “investment examples, investment philosophies, and how to incorporate them into the pension fund’s portfolio,” according to its statement.
The news comes weeks after the Japanese cabinet approved a measure allowing venture capital firms and investment institutions to hold cryptocurrency. The bill has yet to be approved by Parliament.
Pension funds turn their sights to crypto.
On March 19, the GPIF formally declared that they were creating new long-term investing guidelines. This is a reaction to both the quick advancement of technology and significant shifts in the economy and culture.
Interest in the crypto space from pension funds is not a new development. For example, South Korea’s National Pension Service made headlines last year when it invested approximately 26 billion won in Coinbase stock.
In an effort to boost returns, US pension fund Fairfax County Retirement Systems, which oversees $6.8 billion in assets, also revealed intentions to enter the cryptocurrency lending industry.
Meanwhile, according to a CFA Institute survey conducted in April 2022, 94% of state and government pension plan administrators are investing in cryptocurrencies. Due to its minimal correlation with traditional assets, proponents of the cryptocurrency sector have long praised Bitcoin as the perfect investment for pension funds.
