Japan's Government Pension Investment Fund, the largest public pension manager in the world, is in discussions to allow it to invest for the first time in alternative instruments. 

The GPIF has USD 300 billion in assets under management. According to officials, a special subcommittee of at the Ministry of Health, Labor and Welfare, which oversees GPIF, is poised to allow the fund to change its Investment Policy Statement to diversify from domestic and foreign equities and bonds into hedge funds and other higher yielding alternatives.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

The move would represent official approval from the Japanese government for alternative investments and is expected to clear the way for a potentially huge transfer of funds into them once other public pension funds in the country follow suit.

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