The most consequential change Toru Shindo made after becoming the chief investment officer of the $104.8B United Nations Joint Staff Pension Fund in 2021 was introducing corporate credit exposure.
The gap in this area surfaced during an ad-hoc asset-liability management study the fund conducted shortly after he took on the CIO role — an unusual step, but the post-Covid environment had already invalidated earlier assumptions. “Everybody was questioning whether the ALM study was still valid,” said Shindo, in an interview with Markets Group.
At the time, the fixed income portfolio consisted only of U.S. Treasuries, mortgage-backed securities, and emerging-markets debt. “We realized we were missing investment-grade corporate credit.”
Closing the gap required both portfolio redesign and internal restructuring. In 2022, Shindo introduced new equity and fixed income benchmarks and added corporate credit. But with no internal credit team, implementation had to begin with external managers while he built capabilities from scratch. “Credit is complicated — we didn’t have the internal resources.”
By 2024, the team was strong enough to add high yield and start insourcing. “We’re now managing more assets internally and pulling back the external portion after establishing a very strong team,” added Shindo.
In a strategic shift, the portfolio moved from 70/30 risky versus safety assets to 60/40; however, he offset that top-down de-risking by adding risk selectively within asset classes: corporate credit and high yield in fixed income and stronger emerging-markets exposure in equities. “This year emerging markets performed much better than the U.S., so the decision was good,” said Shindo.
The fund’s climate strategy advanced in parallel. As a member of the Net-Zero Asset Owner Alliance, the fund had pledged a 40% reduction in portfolio carbon intensity by 2024. It ended up cutting 48.2% as of December 2024. This came through divestment of fossil-fuel companies and deeper stock selection focus on low-emission names, highlighted the CIO.
On the private markets side, the fund began deploying into private credit at the end of last year, simply because internal resources were not ready earlier. “The team is very new and we’re starting from scratch,” said Shindo. Relationships with managers are still being established, although existing networks in private equity, real estate, and infrastructure are helping.
Shindo stressed that scaling will be opportunity-driven, not target-driven. “If we don’t see opportunities, we don’t have to invest,” said Shindo. “Our strategic allocation to private credit is still zero until the next ALM in 2027.”
Private equity faces its own difficulties: historically low exits and public market returns dominated by a handful of artificial intelligence giants. “Private equity should outperform public markets, but in the last three years it’s been the opposite. What is the value of private equity now? That’s a question.”
He expects the eventual broadening of AI benefits to lift private returns too. “AI should benefit all sectors and all market-cap levels,” said the CIO. “Private equity should benefit as the technology spreads.”
The organization is now exploring a total portfolio approach (TPA), joining peers seeking to overcome the suboptimal nature of siloed strategic asset allocation. With the probability of achieving its longstanding 3.5% real-return target now lower than four years ago, TPA is one option to enhance efficiency. “If we optimize at the total fund level, returns should be improve,” he stated.
However, implementation remains challenging. He likens the industry’s TPA maturity stages to autonomous-driving levels: “level one, level two, maybe level five.” There is no common definition, and each institution interprets TPA differently. The fund plans to begin a feasibility study soon.
“We may need to rethink our organizational structure [and] add new functions, tools, and processes,” said Shindo. “But we are still in the early stages of exploring TPA.”
The fund has also been a pioneer in sustainability disclosure, adopting Task Force on Climate-related Financial Disclosures-aligned reporting in 2022 and International Financial Reporting Standards-S2 disclosures. “We want to show our commitment and influence other pension funds follow,” added Shindo. “But the database is still not robust — it’s a chicken-and-egg problem.”
Looking to 2026, he emphasized long-term foundations rather than chasing annual metrics. “We are laying the foundation for future returns — 10, 20, 30 years from now.”
The pacing plan for private markets is in place, but the fund is already near its targets: slightly overweight in private equity and underweight in real estate and infrastructure. “The priority is infrastructure, real estate, and private credit. But we’re not investing just to fill gaps — we’re watching opportunities closely.”
