(Repeats Thursday's story with no changes to text)
* Seven execs recruited in 2015 to broaden investment expertise
* Bank halves three-year targets for alternative investments
* Curtails risk-taking stance; slashes hedge fund exposure
By Tomo Uetake and Hideyuki Sano
TOKYO, Feb 27 (Reuters) - Four of the seven top investment professionals brought in to bolster Japan Post Bank's $2 trillion portfolio have now left the bank, as the former state-owned giant rolls back plans for a more aggressive investing approach.
The change of strategy around one of the world's largest investment pools raises more questions about the growth prospects of parent Japan Post Holdings, which counts the bank as its main breadwinner. It is already grappling with a policy mis-selling scandal at Japan Post Insurance, while the internet is dampening demand at its traditional postal services division.
Dubbed the "Seven Samurai" after Akira Kurosawa's classic warrior film, the executives were recruited in 2015 from Goldman Sachs and other top institutions as Japan Post Bank, known colloquially as Yucho, sought to broaden its investment expertise beyond government bonds and improve returns - something which became imperative as the Bank of Japan's negative interest rate policy from early 2016 ate into income earned from domestic bonds.
Two sources told Reuters that Tokihiko Shimizu, a former key official at government pension fund GPIF, and Naohide Une, an ex-Goldman head of derivative trading, left the company last month, cutting the number of Yucho's samurai to three after the departure last year of Taiichi Hoshino, a Goldman alumnus and ex-hedge fund manager.
The team's guru, Katsunori Sago, a former top Goldman executive, left in June 2018 to join SoftBank Group as chief strategy officer.
Japan Post Bank confirmed the departure of the four Samurai.
Less than a year after Sago left, the bank lowered its target for what it calls "strategic investments" -- including hedge funds, private equity, real estate funds and direct lending -- to a range of 4 trillion to 5 trillion yen ($36 billion to $45 billion) by March next year, from a previous target of 8.5 trillion yen.
The strategic investment allocation stood at 3 trillion yen in September, up just 0.1 trillion yen from March.
Sago's departure is eroding the "samurai spirit" at Japan Post Bank, which is slowly returning to the bureaucratic ways seen when it was fully-owned by the government, one of the sources, who has direct knowledge of the matter, said.
However, the shift also appears to be in line with one underway at Japan's Financial Services Agency (FSA).
While Nobuchika Mori, who stepped down as FSA chief in July 2018, put pressure on banks to seek higher investment returns, current chief Toshihide Endo is perceived by the financial industry to be putting more emphasis on tighter risk management.
Yucho had cut its allocation to hedge funds to 0.6 trillion yen by September from 1.0 trillion at the start of the financial year last April, according to the bank's earnings statement.
It has since pulled out more funds, with most of its remaining hedge fund allocation unable to be redeemed as it is subject to lockup periods, the two sources said.
Other areas - such as active investing in domestic equities by an in-house team and derivatives trading - have also seen limited expansion compared with its initial goal, one of the sources and one other person said.
Japan Post Bank told Reuters it had lowered its allocations to hedge funds because of sluggish performance. It said it continued to increase other strategic investments such as private equity and real estate.
Currency traders have also noticed a more conservative approach. In 2016-17, Yucho bet big on the U.S. dollar gaining against the yen - and won. But more recently it has had a much lower profile in the market, which market players attribute to its more conservative shift.
"This change in strategy has raised risks of a decline in profit. The driver for its medium-term profit growth has become unclear," said Rie Nishihara, senior bank analyst at J.P. Morgan.
($1 = 110.30 yen)
Reporting by Tomo Uetake and Hideyuki Sano; Editing by Jennifer Hughes, Christopher Cushing, Kirsten Donovan