till, pressure to increase the fund’s investment returns should keep the question of diversifying into areas such as hedge funds, private equity and real estate in play, Koji Yamamoto, president and representative director of State Street Global Advisors (Japan) said. He predicted change could come over the next five to 10 years. The heavyweight fund is well known for being aggressive in negotiating low management fees — Nomura Research’s Mr. Horie noted that the average fee on the 80 per cent of GPIF assets in passive strategies and the 20 per cent in active strategies is a mere three basis points — but the reputation boost of getting the fund’s “seal of approval” is great, managers said.

Dev Clifford, a managing director with Greenwich, Conn.-based Greenwich Associates, said some managers reported garnering a number of Japanese corporate pension mandates soon after the GPIF announced that is had hired their firm. In the Japanese market, winning a mandate from the GPIF, with its size and transparency, is “very important,” agreed PIMCO’s Mr. Hodge.