The assets under management of the world’s 100 largest asset owners totalled US$26.3 trillion as of the end of 2023, up 12.3 per cent from the previous year, according to a new report by WTW’s Thinking Ahead Institute.
It found, as of Dec. 31, 2023, the top 20 assets owners made up 55.6 per cent of total AUM (with $14.6 trillion), while the top five asset owners accounted for 24.4 per cent of total AUM (with $6.4 trillion). Pension funds managed 51.2 per cent of total AUM ($13.5 trillion), followed by sovereign wealth funds, which managed 39.9 per cent of total AUM ($10.2 trillion).
The top three asset owners remained unchanged, with Japan’s Government Pension Investment Fund retaining its position as the world’s largest asset owner ($1.6 trillion AUM), followed by Norway’s
Norges Bank Investment Management ($1.5 trillion AUM) and the China Investment Corporation ($1.2 trillion AUM).
Read: World’s 100 largest asset owners’ AUM down 9% in 2022: report
The report also noted since 2017, pension funds represent a declining proportion of the top asset managers in North America and in Europe, the Middle East and Africa, due to accelerated growth in sovereign wealth funds’ assets and use of outsourced chief investment officers. Indeed, OCIOs saw the most significant growth with a 26.4 per cent year-on-year rise.
Across the EMEA region, the pattern is more pronounced, as sovereign wealth funds now represent 70 per cent of total assets. By comparison, sovereign wealth funds manage 43 per cent of assets in Asia-Pacific and just two per cent in North America. Still, pension funds continue to dominate in North America and Asia-Pacific, representing 69 per cent and 57 per cent of assets, respectively. OCIOs and master trusts are responsible for 9.3 per cent of total AUM. Notably, endowments and foundations accounted for 0.6 per cent of total AUM.
By region, the EMEA region held the largest proportion (34.3 per cent) of total AUM, followed by Asia-Pacific (33 per cent) and North America (32.7 per cent).
“Asset owners globally are navigating a series of waves and occasional storms — from market volatility and geopolitics to technology and structural changes in societies and economies,” said Jessica Gao, director of the Thinking Ahead Institute, in a press release. “Traditional risk management relying heavily on historical data and linear models struggles to keep up with today’s complex, interconnected risks. A new approach will be required to understand and manage risks that arise from complex, systemic sources with limited historical precedent.”
Read: World’s 500 largest asset managers’ AUM up 12.5% in 2023: report