Tokyo, Japan – The Government Pension Investment Fund (GPIF) of Japan and APG Asset Management have formed a groundbreaking partnership to focus on strategic infrastructure investments in developed markets overseas. This collaboration between two leading pension fund investors, boasting a combined asset management portfolio exceeding $2 trillion, marks a significant milestone in their investment capabilities.
The investment platform’s size remains undisclosed, but the initiative will target global infrastructure projects aimed at advancing digital connectivity, promoting energy transition towards a fossil-free future, and leading decarbonization efforts in transportation. This endeavor aims to deliver sustainable, long-term returns while setting a new standard for international pension fund cooperation.
As the largest pension provider in the Netherlands, APG oversees the pensions of approximately 4.8 million participants, with assets totaling around €569 billion ($617 billion). Meanwhile, the GPIF of Japan, the world’s largest pension fund, manages assets worth about 225 trillion Japanese yen ($1.5 trillion). President of GPIF, Masataka Miyazono, highlighted the fund’s increasing exposure to alternative investments like infrastructure, private equity, and real estate to enhance portfolio diversification and ensure pension finance stability.
The joint investment program in the infrastructure sector is a testament to the long-term partnership between GPIF and APG, positioning them as leaders in the public pension fund space. APG holds an infrastructure portfolio valued at about €25 billion ($27 billion), while GPIF’s infrastructure portfolio stands at 1.45 trillion yen ($9.5 billion). This collaboration reflects the growing preference for infrastructure as an alternative asset class among asset owners in the region.
In another partnership development, the Indonesia Investment Authority (INA) has joined forces with Global Infrastructure Partners (GIP) to scout for and establish high-quality infrastructure projects within Indonesia. This collaboration leverages INA’s understanding of the local market and GIP’s international experience in infrastructure development, particularly in green energy and infrastructure.
According to Kyle Mangini, Global Head of Infrastructure at IFM Investors, infrastructure investment presents investors with a trillion-dollar opportunity over the next decade. IFM’s Global Infrastructure Outlook for 2024 underscores the increasing mainstream appeal of infrastructure assets, attracting more capital and competition while offering substantial opportunities amidst the global energy transition and government policy support shifts. The resilience of infrastructure investment, as highlighted in IFM’s report, underscores its growing recognition due to considerations for relative risk and return, delivering consistent returns for investors’ portfolios regardless of economic conditions.