01 Oct 2021

Foreign Hedge Fund Manager Access to Japanese Pension Funds

Japanese Pension Funds are responsible for over USD 750 billion in AUM, but are subject to strict rules on making their own investment decisions and who they can allocate to. This toolbox memo explores the routes available for foreign hedge fund managers to access Japanese Pension Funds.

The strict rules generally mean that the investment decisions of these Japanese Pension funds are primarily delegated to registered investment managers in Japan. The registered investment management industry in Japan is relatively small compared to its population and highly concentrated with a small number of firms representing most of the cumulative assets under management. Foreign managers could potentially provide increased choice and competition for Japanese Pension Funds but there are high regulatory hurdles that must be overcome for these investment managers. This Toolbox memo discusses some of these challenges and looks at potential entry strategies for foreign hedge fund managers, including how they compare in terms of licencing and regulatory requirements.

The memo includes:

  • An overview of Japanese Private Defined Benefit Pension Fund market,
  • A comparison of relevant regulatory frameworks in Japan, the US, and the UK, and
  • An overview of access routes for foreign managers to Japanese Pension Funds.


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