On Tuesday August 20th Executive Managing Director and Chief Investment Officer of GPIF (Japanese Government Pension Investment Fund) Hiro Mizuno will give a keynote presentation with performance fees and sustainable investing being the main two talking points.
GPIF is the world’s largest pension fund with over 1.5 trillion in total assets.
GPIF’s main driver in recent years has been against “Shortism”. GPIF want to focus on building a more sustainable market rather than focusing on beating it.
Impressively, ESG investments comprise the entire GPIF portfolio as they target long-term returns and long-term value.
The ESG ethos is so strong that a Harvard Business School case study featured GPIF earlier in the year.
Their main principle asks investment managers to integrate ESG and to commit to the UN supported Principles for Responsible Investment or RPI that the fund signed in 2015. GPIF expect their asset managers to;
There are two basic rules that GPIF follow in order to promote their sustainable ethos;
If no alpha is generated, they receive the same fees as passive managers.
This fee structure was introduced 1 year ago and since, the fund has paid much smaller fees, roughly 40% fewer.
However, with fees being paid based on longer term results, you would expect the amount of fees paid to rise over time should the ethos be followed.
To find out more or register for a free demo, get in touch with our team.
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