Assets held by the 300 largest pension funds in the world fell by $81 billion during last year’s “tougher market environment,” according to new research from Willis Towers Watson.
At the end of last year, these retirement funds managed a combined $18.03 trillion, down from about $18.11 trillion at the end of 2017, the firm’s Thinking Ahead Institute said in its annual World 300 report with Pensions & Investments. The decline compares with a 15.1 percent jump in assets under management in 2017.
Among the 20 biggest retirement funds, meanwhile, assets under management shrank last year by 1.6 percent to $7.3 trillion — marking the first time their share of total pension assets fell since 2012. In 2017, by comparison, the value of the top 20 funds had jumped by 17.4 percent.
“A tougher market environment in 2018 meant AUM growth paused, but the underlying trend remains one of growing pension markets worldwide,” Bob Collie, head of research at the Thinking Ahead Institute, said in a statement on the findings.
Over the past five years, for instance, Willis Towers Watson said that the top 300 pensions increased by 3.9 percent annually, while the 20 biggest funds had an annualized growth rate of 4.7 percent.
However, defined benefit assets still made up nearly two-thirds of pension assets managed by the top 300 funds at the end of 2018, according to Willis Towers Watson. Defined contribution assets, meanwhile, accounted for 23.9 percent of the total, with the rest held in government reserve funds and hybrid funds incorporating both defined benefit and defined contribution elements.