At a time when Asia Pacific’s pension funds need to modernise, expand and improve, having high calibre professionals in key roles will be vitally important.
For that reason, AsianInvestor has consulted leading pension fund experts, consultants, custodians and fund managers to put together a list of 20 pension executives who stand out in their field. The list, which has been rolled out online over the last couple of weeks, is not ranked. Nor is it intended to be exhaustive. But hopefully it highlights why these particular executives in the region have so impressed their peers, business partners and colleagues.
You can also find out more about the rationale for our list. Today, we move on to executives from Japan and Malaysia.
Chief investment officer, Government Pension Investment Fund, Japan
Few individuals have had a greater personal sway over a larger array of assets than Hiromichi Mizuno (pictured).
The chief investment officer of the largest pension fund in the world has been no wilting flower since joining from private equity firm Coller Capital, where he had been a partner, in January 2015. Mizuno was brought in to shake up GPIF’s ossified decision-making, while helping propel it along the government’s new objectives of creating corporate dynamism and transparency, and a more vigorous capital market. To do that, GPIF had to utilise its biggest weapon: its AUM.
The 52 year-old began by installing more concrete governance processes at the ¥149 trillion ($1.3 trillion) pension fund. This included more rigorous asset manager selection criteria, and a demand for more active approaches to corporate engagement and stewardship. In effect, he wanted GPIF’s fund houses to become far more emboldened when it came to demanding results from the corporates in which they invested.
In addition. Mizuno has directed GPIF’s embrace of environmental, social and governance (ESG) standards, with the fund directing ¥1 trillion of assets to follow three passive ESG equity indexes. He told AsianInvestor that the pension fund’s focus on ESG directly compliments GPIF’s goal to shepherd assets over the very long term.
“I believe that for capital markets to be sustainable, social systems must be sustainable. For social systems to be sustainable, the global environment must be sustainable,” Mizuno said. ESG, he added, is a “very convenient and efficient tool” to “eliminate the short-termism existing in the investment chain and get rid of all conventional excuses of our asset managers for such behaviour”.
GPIF has a great deal of clout to get its way. As Mizuno notes, the pension fund intends to keep fully outsourcing the investment of its assets, meaning it “is likely to remain the biggest institutional client for the asset management industry”.
That gives it a lot of influence, and Mizuno is keen to use it. One of his goals is to use “GPIF’s unique position” to begin “engaging other players, such as asset managers and index venders, to make the investment chain more sustainable.”
Fund managers, be warned: Mizuno isn’t done wielding GPIF’s assets yet.
WAN KAMARUZAMAN BIN WAN AHMAD
Chief executive officer, Kumpulan Wang Persaraan (Kwap), Malaysia
One asset manager who AsianInvestor spoke to rated Wan Kamaruzaman Bin Wan Ahmad, chief executive officer of Kumpulan Wang Persaraan (Kwap), as “one of the top executives in the pensions investment space in Malaysia today”.
In a decade in Malaysia’s pensions industry, Wan Kamaruzaman also worked at the country’s largest retirement savings fund, Employees' Provident Fund.
Industry insiders say since taking the top role at Kwap, also known as Retirement Fund Inc, in 2013, Wan Kamaruzaman has acted to transform its operations. This includes gradually attempting to diversify its investments out of local markets and to introduce technology to streamline its operations.
Wan Kamaruzaman is reportedly keen to boost overseas investments from around 12% to 15% of AUM. The fund received permission in 2013 to expand its overseas allocations from 10% of total assets to 19%. By 2015, overseas investments were close to 12%.
This hit a wall in 2016, when Prime Minister Najib Razak commanded Kwap and other big Malaysian institutional investors to pull back on foreign investments and channel resources to local fund managers to stabilise the domestic stock market, which had been hit by the scandal surrounding state fund 1MDB.
Wan Kamaruzaman has also expressed interest in increasing Kwap’s alternative investments, including private equity, property and infrastructure, which account for less than 10% of AUM. It reportedly invested $30 million in taxi-hailing app Uber as its first foreign disruptive technology bet and is considering more tech-focused deals.
In 2016, Wan Kamaruzaman oversaw the overhaul of the fund’s investment systems, with a new automated system for investment and back office. This year, Kwap became the first Malaysian pension fund signatory to the UN-supported Principles for Responsible Investment. Wan Kamaruzaman, a member of the Financial Stock Exchange’s environmental, social and governance advisory committee in London, is making his influence clear in this space—as in many other areas.