Pension funds have lost market share among 100 largest asset owners with $23T AUM

investmentnews.com:

The 100 largest asset owners in the world saw their assets under management decline by 9% by the end of 2022 compared to the previous year, but still controlled more than $23 trillion in assets. But who are they?

Five years ago, pension funds were in pole position, holding 60% of AUM among the top 100 owners at the time. But relative investment performance – with a slower correction in their collective assets – and new inflows means sovereign wealth funds have surged ahead.

While sovereign wealth funds owned 32% of the top 100’s assets five years ago, they now control 39%, or $9.1 trillion in absolute terms, according to new research by the Thinking Ahead Institute. Pension funds remain the largest group overall, with 53% of assets while outsourced CIOs and master trusts are responsible for the remaining 8% of total AUM.

“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 Jessica Gao, director at the Thinking Ahead Institute. “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 owner in different and unexpected ways.”

Gao added that this has seen new risk methodologies emerge, such as a total portfolio approach, with goals the central driving force and the best ideas incorporated through