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Japan’s Pension Fund Weighs Bitcoin and Gold for Investment Diversification

Shalini Nagarajan
Last updated: | 1 min read
Pension Fund
Source: Midjourney

Japan’s Government Pension Investment Fund (GPIF) said Tuesday that it is seeking information regarding diversifying into illiquid assets such as Bitcoin, gold, forests, and farmland.

The GPIF aims to refine its core investment portfolio with a focus on long-term sustainability, taking into account major economic and social shifts. It plans to conduct research aligned with its Fiscal Year 2023 objectives, seeking input on aspects related to investments.

GPIF said it won’t offer compensation for any information provided, according to a Japanese translation of the announcement.

While actively seeking information, there remains uncertainty regarding its potential expansion into new investments.

GPIF Seeks Long-Term Investment Returns for Pension Benefits

GPIF currently invests in a portfolio that includes both domestic and international markets. These encompass stocks, bonds, and various government bonds. Moreover, the fund integrates environmental, social, and governance (ESG) considerations into its strategy to enhance long-term returns. With assets totaling approximately $1.5t, it is recognized as the largest pension fund globally.

GPIF’s primary goal is to generate investment returns over the long term to support public pension benefits. All this while minimizing risk to the pension system.

Crypto Catching Pension Funds’ Eye

Interest from pension funds in the crypto space isn’t new. For instance, South Korea’s National Pension Service made headlines last year when it invested around 26 billion won ($20m) in Coinbase stock.

The Fairfax County Retirement Systems, a US pension fund managing assets worth $6.8b, also announced plans to venture into crypto lending markets to enhance returns.

Meanwhile, a CFA Institute survey conducted in April 2022 revealed that 94% of state and government pension plan sponsors are involved in crypto investments. Additionally, it found that 62% of corporate defined benefit plans were allocating funds to crypto-related investments.