GPIF Begins Building Database with BNY to Benchmark Alternative Assets
The Government Pension Investment Fund (GPIF) has been increasing its exposure to alternative investments (infrastructure, private equity and real estate). To regularly and efficiently obtain detailed data on the investment performance of funds in the market, GPIF begins building a database on alternative assets.
The GPIF's 5th 5-year Medium-Term Target starting in FY 2025 stipulates that alternative investments should be made from the perspective of obtaining excess returns, and it is important for GPIF to select investment opportunities that are expected to generate excess returns compared to traditional markets.
As industry practice in the alternative investment market, the selection and evaluation of individual funds has primarily relied on qualitative assessments, with quantitative evaluations limited to comparisons among similar funds based on a narrow set of metrics (such as internal rate of return and investment multiples). In order to further increase the confidence in obtaining such excess returns, GPIF begins building a database that will accumulate the data necessary for advanced quantitative analysis.
Unlike traditional assets, such database is not common in the alternative investment market. Therefore, the GPIF will need to directly collect data from individual fund managers (both overseas and domestic). GPIF has recently hired Eagle Investment Systems (an affiliate company of The Bank of New York Mellon) as the vendor to collect data. Going forward, the GPIF will collaborate with them and, with the cooperation of the asset managers for each alternative fund, proceed with acquiring the data.
BNY’s press release suggests that its Data & Analytics platform was selected to provide GPIF high-quality granular data of alternative assets, empowering informed investment decisions based on a clear view of the performance and risk of the asset class. The platform accesses the extensive dataset of CEPRES, a private market data company with over 20 years of experience and the largest private assets database globally.
GPIF’s five-year medium-term plan emphasizes achieving excess returns through alternative investments, making scarce, high-quality data for robust quantitative analysis essential. By consistently collecting investment look-through data directly from General Partners (“GPs”), combined with strong data validation capabilities, BNY will provide vital support for GPIF to achieve its objective.
Norbert Gehrke
