U.S. pension funds stay put in Japan
CalPERS has $7.7 billion invested in Japan
A growing humanitarian and nuclear crisis emerging in Japan in the wake of a massive earthquake and tsunami is not scaring U.S. pension funds into dropping their Japan investments — at least not yet.
“We’re not doing anything differently because of what is happening in Japan,” said Clark McKinley, a spokesman for California Public Employees’ Retirement System, the largest U.S. public pension fund with $225 billion in assets under management. CalPERS has $7.7 billion invested in Japan equities and fixed income as of Jan. 31, 2011.
“[Japan is] a very big market, very productive and eventually Japan will be coming back. We are a long-term investor, so we will not be doing anything in a short-term response to what is happening over there,” he added.
McKinley noted that CalPERS Chief Investment Officer, Joseph Dear, told the pension fund’s board earlier this week that the Japanese market is large and he expects a resurgence in productive capacity “which is not to be under-estimated.”
The investment community is considering an unfolding crisis in Japan as Japanese authorities raised the severity of the nuclear crisis at Fukushima nuclear plant on Friday, raised for the first time the possibility that they would have to encase the plant in concrete to prevent further damaging radiation releases.
Nevertheless, Ricardo Duran, a spokesman for the second-largest U.S. public pension fund, the California State Teachers’ Retirement System, echoed the CalPERS approach.
“While CalSTRS investment staff is closely monitoring the situation as it unfolds, they have not shifted strategy with regard to our Japan investments,” Duran said.
CalSTRS, which has $150 billion in assets under management as of Feb., 2011, has $126 million in Japan-based private equity investments, $3.6 billion in equity investments in Japan as part of its global equities unit and $4.4 billion in fixed-income allocations in Japan that include funds in bonds and securitized debt.
Separately, The Connecticut Retirement Plans and Trust Funds, which has $24.5 billion in assets, is conducting due diligence on its Japan investments. The CRPTF’s investments in Japanese firms are valued at approximately $1 billion, and represent 19% of the fund’s developed market international stock exposure, said Christine Shaw, assistant deputy treasurer at the Connecticut fund. Overall Japanese exposure to the CRPTF as a whole is 4.1% of the fund’s total assets as of March 11.
“The CRPTF’s money managers will take into consideration the financial impact of the crisis in Japan, and then act in the best interests of the fund,” said Shaw.
She added that the Connecticut pension fund has a $1.5 million investment in Tokyo Electric Power Co., or Tepco, the company that owns the crippled Fukushima nuclear power plants.
Shaw said Connecticut Treasurer Denise Nappier has directed her in-house staff to place Tepco on corporate governance watch and prepare a report of findings and recommendations concerning the company’s performance, transparency, disclosure and risk management. Nappier is seeking a similar report on all of its exposure to nuclear plants, both abroad and here in the USA, Shaw added.
(인용: Ronald D. Orol, MarketWatch)