The world’s largest asset owners are too important to fail, carrying the potential to positively impact wealth and wellbeing for billions of people
ARLINGTON, VA, November 13, 2019 – The Asset Owner 100 (AO100) — the world's 100 biggest asset owners — account for $19 trillion, up 1.7% from last year, according to research from the Thinking Ahead Institute. In its second study of the AO100, the Thinking Ahead Institute highlights the unique position universal owners have to direct capital in a sustainable way, making a significantly positive impact on issues, including climate change.
"The major investment markets failed to make progress in 2018 around their equity and bond returns, but these funds, in many cases, were able to avoid losing ground against their longer-term targets by sensible diversification — in particular, into private markets," said Roger Urwin, global head of content at the Thinking Ahead Institute.
"The 100 largest asset owners are responsible for over 35% of all global asset owner capital. Of these, there are a number of self-declared universal owners that are large-scale, long-term and leadership-minded funds that own a slice of the whole world economy. This makes them pursue an influential role in safeguarding the financial system and contributing positively to certain big societal issues without compromising on their financial responsibilities. They have no choice but to take seriously their responsibilities and lead from the front," Urwin adds.
The Thinking Ahead Institute's analysis found that 59.1% of AO100 assets are held by pension funds, decreasing by 1.7% in 2018; 33.5% are held by sovereign wealth funds (SWF), increasing by 1.5% during the year; and 7.4% by outsourced chief investment officers and master trusts, increasing by 0.2%. Asia Pacific remains the largest region in terms of AUM, accounting for 36.1% of assets in the ranking. EMEA and North American assets represent 32.3% and 31.6%, respectively.
"During 2018 there were a number of sustainability initiatives by universal owner funds that involved 'doing good while doing well.' This marks the start of a movement in which funds support societally beneficial initiatives consistent with financially sound fiduciary principles. GPIF, the Japanese fund and largest asset owner in the world, is at the center of a number of these initiatives," said Urwin.
"Asset owners face lower expected returns in the future, and the success with which they meet their targeted returns will be dependent on how well they adapt their investment model to integrate sustainability considerations such as environmental, social and governance-related investment opportunities," said Marisa Hall, director at the Thinking Ahead Institute. "Global best practice on sustainability for asset owners is on an upward trajectory, but it still has a long way to go."
The top 20 funds total US$10.55 trillion and represent 55.5% of AO100 assets.
| Rank | Fund | Market | Total Assets | Category |
|---|---|---|---|---|
| 1 | Government Pension Investment | Japan | $1,374,499 | Pension Fund |
| 2 | Government Pension Fund | Norway | $982,293 | Pension Fund |
| 3 | China Investment Corporation1 | China | $941,420 | SWF |
| 4 | Abu Dhabi Investment Authority1 | UAE |
$696,660 | SWF |
| 5 | Kuwait Investment Authority2 | Kuwait | $592,000 | SWF |
| 6 | Federal Retirement Thrift | U.S. | $578,755 | Pension Fund |
| 7 | National Pension | South Korea |
$573,259 | Pension Fund |
| 8 | Hong Kong Monetary Authority Investment Portfolio2 | Hong Kong | $509,353 | SWF |
| 9 | SAMA Foreign Holdings2 | Saudi Arabia | $505,755 | SWF |
| 10 | ABP | Netherlands | $461,682 | Pension Fund |
| 11 | SAFE Investment Company2 | China | $439,837 | SWF |
| 12 | GIC Private Limited2 | Singapore | $390,000 | SWF |
| 13 | California Public Employees | U.S. | $376,859 | Pension Fund |
| 14 | Temasek Holdings2 | Singapore | $374,896 | SWF |
| 15 | National Social Security | China | $325,002 | Pension Fund |
| 16 | Qatar Investment Authority2 | Qatar | $320,000 | SWF |
| 17 | Public Investment Fund/ Sanabil Investments2 | Saudi Arabia | $290,000 | SWF |
| 18 | Canada Pension2 | Canada | $287,410 | Pension Fund |
| 19 | Central Provident Fund | Singapore | $286,963 | Pension Fund |
| 20 | PFZW2 | Netherlands | $248,326 | Pension Fund |
1 As of May 31, 2019
2 As of December 1, 2018
The Thinking Ahead Institute was established in January 2015 and is a global not-for-profit investment research and innovation member group made up of institutional asset owners and service providers committed to changing and improving the investment industry for the benefit of the end saver. It has over 40 members around the world and is an outgrowth of Willis Towers Watson Investments' Thinking Ahead Group which was set up in 2002.
The information included in this presentation is intended for general educational purposes only and does not take into consideration individual circumstances. Such information should not be relied upon without further review with your Willis Towers Watson consultant. The views expressed herein are as of the date given. Material developments may occur subsequent to this presentation rendering it incomplete and inaccurate. Willis Towers Watson assumes no obligation to advise you of any such developments or to update the presentation to reflect such developments. The information included in this presentation is not based on the particular investment situation or requirements of any specific trust, plan, fiduciary, plan participant or beneficiary, endowment, or any other fund; any examples or illustrations used in this presentation are hypothetical. As such, this presentation should not be relied upon for investment or other financial decisions, and no such decisions should be taken on the basis of its contents without seeking specific advice. Willis Towers Watson does not intend for anything in this presentation to constitute “investment advice” within the meaning of 29 C.F.R. § 2510.3-21 to any employee benefit plan subject to the Employee Retirement Income Security Act and/or section 4975 of the Internal Revenue Code.
Willis Towers Watson is not a law, accounting or tax firm and this presentation should not be construed as the provision of legal, accounting or tax services or advice. Some of the information included in this presentation might involve the application of law; accordingly, we strongly recommend that audience members consult with their legal counsel and other professional advisors as appropriate to ensure that they are properly advised concerning such matters. In preparing this material we have relied upon data supplied to us by third parties. While reasonable care has been taken to gauge the reliability of this data, we provide no guarantee as to the accuracy or completeness of this data and Willis Towers Watson and its affiliates and their respective directors, officers and employees accept no responsibility and will not be liable for any errors or misrepresentations in the data made by any third party.
In the absence of its express written permission to the contrary, Willis Towers Watson and its affiliates and their respective directors, officers and employees accept no responsibility and will not be liable for any consequences howsoever arising from any use of or reliance on the contents of this document including any opinions expressed herein.
Views expressed by other Willis Towers Watson consultants or affiliates may differ from the information presented herein. Actual recommendations, investments or investment decisions made by Willis Towers Watson and its affiliates, whether for its own account or on behalf of others, may not necessarily reflect the views expressed herein. Investment decisions should always be made based on an investor’s specific financial needs.
