Sovereign wealth funds (SWFs) now make up 38.9% of total assets among the world’s largest 100 asset owners (the AO100). In absolute terms, sovereign wealth funds within the AO100 now represent
As a result, pension funds only just retain the majority share of assets under management (AUM) among the AO100, with the combined assets of pension funds making up 52.8%, while outsourced chief investment officers and master trusts are responsible for the remaining 8.3% of total AUM in the AO100.
This marks a clear decline over the medium term. Five years ago, pension funds made up more than 60% of the AO100, while SWFs represented 32% (or less than one-third).
Taken as a whole, the AO100 are now responsible for
Other findings from the full study by the
The very largest 20 asset owners in the world now have a total of
“Asset owners from sovereign wealth funds to pension funds have navigated a year when volatility and uncertainty in the global economy have been at their highest in a generation — with often divergent outcomes,” said
“The disruption caused by elevated inflation and increased interest rates has affected equity and bond markets on a global scale, putting extra pressure on asset owners to reassess and adjust their strategies. The shift from an era of low inflation and interest rates has given a rise to a new macroeconomic landscape that demands a fresh understanding and management approach. This is impacting different types of asset owners in different and unexpected ways.
“Despite this, we have seen some positive outcomes from such unprecedented uncertainty. New risk methodologies are emerging, from the old view of strategic asset allocation toward leading funds adopting a total portfolio approach (TPA) — where goals are the central driving force and best ideas are incorporated through a competition for capital at the total portfolio level. That has also allowed some large asset owners to ride escalating market waves with better short- and medium-term outcomes too. Meanwhile, we’ve also noticed a renewed emphasis on positive culture, when markets put asset owners and their teams under pressure,” said Gao.
The report also reveals the largest asset owners have an emerging awareness and understanding of the significance of artificial intelligence (AI) for the investment and decision-making process. Out of the 20 largest global asset owners, nine proactively reported a focus on this area of AI while 11 mentioned a growing investment in technology more broadly to support innovation.
“Globally significant asset owners are showing greater awareness and planning for globally significant trends. This has ranged, just in the past 12 months, from equally existential questions of systemic risk — from climate to geopolitics and technology. Such a breadth of threats and opportunities will require a delicate juggling act as investment organizations strive to balance their own internal investments,” concluded Gao.
Notes to editors:
Figures were the latest available as at
About the
The Thinking Ahead Institute is a not-for-profit research and innovation network motivated to influence the investment industry for the good of savers worldwide and to mobilize capital for a sustainable future. Since its establishment in 2015, almost 90 investment organizations have collaborated to bring this vision to light through designing fit-for-purpose investment strategies, working toward better organizational effectiveness and strengthening stakeholder legitimacy.
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