Japan’s Pension Fund Association (PFA) increased its allocation to alternative investments to approximately ¥3trn, equivalent to $19bn or £14.2bn, during the 2025-26 financial year, its latest reports show.

Alternative investments accounted for 21.3 per cent of its basic pension portfolio at the end of March 2026, up from 20 per cent a year earlier. Meanwhile, alternatives represented 31.7 per cent of its combined corporate pension portfolio, up from 27 per cent at the end of the previous financial year.

In total, the association’s alternative investment holdings increased by around 14 per cent from ¥2.63trn in March 2025.

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The allocations cover a range of alternative asset classes, including private equity, hedge funds, real estate, infrastructure and income-focused investments. The PFA’s income-focused strategies include infrastructure debt, direct lending, asset leasing and other alternative financing arrangements.

The figures were disclosed in the association’s latest pension investment reporting, which also showed that its total pension assets had risen by ¥838.6bn to ¥13.76trn ($87bn) at the end of March 2026.

The association’s basic pension portfolio generated an investment return of 12.44 per cent during the financial year, compared with 1.06 per cent in the previous year.

The PFA manages pension assets transferred from corporate pension schemes in Japan, investing across traditional and alternative asset classes to support its long-term pension obligations.

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