27/11/23

WEALTH MANAGEMENT: Sovereign wealth funds reach record global asset share

As published on: funds-europe.com, Monday 27 November, 2023.

Sovereign Wealth Funds (SWFs) now constitute a record 38.9% of assets among the world’s largest 100 asset owners, according to the Thinking Ahead Institute.

Within the top 100 (the ‘AO100’), SWFs represent US$9.1 trillion, an increase attributed to relative investment performance and new inflows outperforming other asset owner types in the last twelve months.

Pension funds, although still maintaining the majority share with 52.8% of assets among the AO100, have seen a decline from over 60% five years ago.

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Outsourced CIOs and master trusts account for the remaining 8.3% of total assets under management (AUM) in the AO100.

The AO100's total responsibility has now reached US$23.4 trillion as of the end of 2022, marking a nearly 9% decrease from the previous year’s US$25.7 trillion. The study highlights a growing concentration of assets among the top-ranking entities, with the top 20 asset owners holding US$12.9 trillion, or 55.2% of the total AUM in the top 100. The largest five asset owners alone accounted for 24.4% of the total AUM with US$5.7 trillion.

The Government Pension Investment Fund of Japan remains the world’s largest asset owner with an AUM of US$1.4 trillion, followed by Norway’s Norges Bank Investment Management with US$1.3 trillion and China Investment Corporation with US$1.1 trillion.

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Geographically, North America leads with 33.9% of total AUM in the AO100, closely followed by Asia-Pacific with 33.7%, and EMEA with 32.4%. The study underscores the shifting dynamics in global asset ownership, with a notable rise in the influence and holdings of sovereign wealth funds.

Jessica Gao, director at the Thinking Ahead Institute, said, “Globally significant asset owners are showing greater awareness and planning for globally significant trends. This has ranged, just in the last twelve 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 organisations strive to balance their own internal investments."

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Private Wealth Industry Wealth Management Sovereign wealth funds