Foreign Hedge Fund Manager Access to Japanese Pension Funds

Routes for Foreign Fund Managers to access Japanese Hedge Funds and a comparison of regulatory frameworks.

01 Oct 2021

Japanese Pension Funds are responsible for over USD 750 billion dollars in assets but are subject to strict rules on the ability to make their own investment decisions and the types of businesses that they can allocate to. These 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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