The world's largest pension and sovereign wealth funds

19 November 2019 Consultancy.uk

The world’s 100 largest pension funds and sovereign wealth funds have over $19 trillion of assets under management, up 1.7% from last year.

Tasked with providing retirement income to retirees, pension funds typically have large amounts of money to invest. Financed by up to five different generations active on the labour market, pension funds are financed by employees, employers, or both, and this pooled funding is used to pay for employee retirement commitments. Pension funds, also known as a superannuation fund in some countries, can be government-owned or privately held.

A sovereign wealth fund (SWF), also known as a sovereign investment fund or a social wealth fund, is a state-owned investment fund. The fund can invest in any opportunity, including financial assets such as stocks and bonds, or real estate, precious metals and start-ups, with the aim of reaping a return on investment, often linked to a societal objective. Governments typically create a sovereign wealth fund when they have excess money, bringing the funds to use instead of simply storing it in the central bank or channeling it back into the economy.

The world's largest pension and sovereign wealth funds

Combined, pension funds and sovereign wealth funds have trillions of dollars at their disposal. According to data sourced from the Thinking Ahead Institute, a research division of Willis Towers Watson, the world’s 100 biggest asset owners have $19 trillion under their belt, of which the top 20 hold $10.5 trillion. Fifty-nine percent of the top 100’s $19 trillion is held by pension funds, while 34% is held by sovereign wealth funds. The remainder is owned by outsourced chief investment officers and master trusts.

Thirty-six percent of the total is held by Asian players, including the world’s largest asset owner, Japan’s Government Pension Investment, and China-based China Investment Corporation (number three globally) and SAFE Investment Company (number 11 worldwide). EMEA and North American assets represent 32.3% and 31.6% respectively of the total share.

The second largest pension fund in the world, Norway’s Government Pension Fund, holds $982 billion in assets, followed by sovereign wealth funds Abu Dhabi Investment Authority ($697 billion) and Kuwait Investment Authority ($592 billion) in fourth and fifth respectively. The top ten is rounded off by Federal Retirement Thrift (US; $578 billion), National Pension (South Korea, $573 billion), Hong Kong Monetary Authority Investment Portfolio (Hong Kong, $509 billion), SAMA Foreign Holdings (Saudi Arabia, $506 billion) and ABP (The Netherlands, $462 billion).


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