The worlds largest pension funds increased their
assets to $15.7 trillion last year, posting positive results
across major asset classes to recover from 2015s decline,
according to Willis Towers Watson.
The London-based consulting firm said this week that the
300 biggest pensions saw assets under management rise 6.1
percent in 2016, after tumbling 3.4 percent the year before.
The top 20 funds increased assets by 7.1 percent to $6.3
Among these giants are the worlds largest asset owner,
Japans $1.2 trillion Government Pension Investment Fund,
and the $893.1 billion Government Pension Fund in Norway. The
United States Federal Retirement Thrift, the largest
defined contribution plan with $485.6 billion of assets, ranks
as the third biggest pension fund, while South Koreas
national pension fund and Dutch pension ABP round out the top
five with more than $400 billion under management each.
"If asset owners are to successfully capture the long-term
premium, it is imperative that they continue to expand their
skill-sets, particularly in a continued lower return
environment which looks set to remain a feature of the industry
going forward, Roger Urwin, global head of investment
content at Willis Towers Watson, said in the firms
statement about its findings.
The 300 largest pension funds represent nearly a quarter of
all investable assets based on Boston Consulting Groups
estimate that global assets under
management totaled $69.1 trillion last year. The bulk were
concentrated among sovereign and public-sector pension funds,
representing 68.4 percent of the top 300s net worth.
While these giant pension funds make up a huge source of
cash for asset managers, many have begun cutting external
managers in favor of managing assets internally. Research firm
Cerulli Associates said earlier this year that the insourcing
trend has become so large among U.S. funds that 43 percent of
investment consultants fear losing business due to large
investors bringing money in-house.
[II Deep Dive: U.S. Pensions Aim to Be More Like Canadian
For example, Ted Eliopoulos, chief investment officer of the
California Public Employees Retirement System the
seventh largest pension, with $306.6 billion under management
told Bloomberg in January that the
long-term goal is for CalPERS to manage 75 percent to 80
percent of its assets in-house. Currently, the fund manages
roughly 70 percent of its assets internally.
Last year, the 20 largest pensions had the bulk of their
assets invested in stocks and bonds, according to Willis Towers
Watson. On average, these investors allocated 41.7 percent of
their portfolios to equities and 37.2 percent to fixed income,
with the remaining 21.1 percent in alternative investments and