AUM of world’s largest pension funds increases to $18.1 trillion, finds Willis Towers Watson

AUM of world’s largest pension funds increases to $18.1 trillion, finds Willis Towers Watson

Assets under management (AUM) at the world’s largest pension funds increased in value by 15.1% in 2017 to reach a total of $18.1 trillion, according to the latest Global 300 Research from Willis Towers Watson.

The rise marked a significant increase from the 6.1% growth achieved in 2016. In particular, the assets of Swiss pension funds also grew by an impressive 12.2%, although this was slightly below the average rate for the study. Emerging market pension funds grew in prominence on the world stage.

The Global 300 Research, from Willis Towers Watson’s Thinking Ahead Institute, captures the performance each year of the world’s largest pension funds. The study showed that the top 20 funds account for 41.1% of the AUM in the ranking, marking a slight increase from 40.3% in the previous year.

Emerging markets have become more prominent in the rankings in recent years, with the Employees’ Provident Fund (India) a new entrant into the top 20 in 2017. A total of four new entrants from emerging market countries have entered the top 20 over the last 10 years: three from Asia and one from Africa.

Michael Valentine, senior investment consultant, at Willis Towers Watson in Zurich, said: “The increased number of the largest funds originating from emerging market regions is reflective of a longer-term trend, with a great deal of progress being made in terms of governance structures and resiliency. These countries are especially interesting to monitor as they are typically in the earlier stages of maturity and can continue to adapt and develop their investment models.”

Commenting on the findings, Bob Collie, head of research for the Thinking Ahead Group, added: “This is a period of extraordinary change for large pension plans, driven by a confluence of factors. It’s not just demographic change and the changing global economic balance; it’s not just changes in social expectations, politics, sustainability, or regulation; it’s not just technology. It’s all of these, and it’s the way the changes compound one another. Many of these organisations are fairly young and have grown rapidly. This puts a spotlight on their governance and how they operate.”

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