Japan Post Bank, one of the leading infrastructure institutional investors in the country, is eyeing agriculture, Yasuhiro Ono, director of private equity and infrastructure, told attendees at sister publication Infrastructure Investor‘s recent Tokyo Summit.
The move is part of a diversification strategy away from core infrastructure.
“We try to make investments that go beyond the conventional infrastructure investment, and we are ready to invest in new areas like agriculture. If there’s a stable demand, and a long-term contract with the offtaker, we see this is as a new area of investment,” Ono explained.
He added: “We focus on diversifying our regional, vintage and sector exposure. We also believe that we should diversify our approach to investment, and we are making efforts to participate in co-investment opportunities.”
Investors at the Summit also stressed that they like to visit assets to better understand their investments.
“Sometimes we don’t know which kind of exposure we are getting,” Hisamitsu Iida, private assets portfolio manager at Sompo Japan Nipponkoa Insurance, commented. “It’s important for us to visit the assets and understand the risks associated [with them], and that the risk level is not too high,” he added.
Similarly, the head of infrastructure and income investments at Japan’s Pension Fund Association, Satoru Tanabe, explained that he also considers on-site visits fundamental due to the “limited information” offered by fund managers.
“It is an issue of better accountability, and it helps us to convince the senior management to get approval for the investment,” he said.