Nine Australian funds are among the world’s 100 biggest asset owners, according to a new report released this week.
Research Willis Towers Watson’s Thinking Ahead Institute shows funds in the AO100 account for around US$19 trillion, or nearly 35 per cent of capital held by all asset owners globally.
The report found that Australia has the second highest number of funds in the AO100 after the US. Of the nine, four are superannuation funds, four are outsourced CIOs and Master Trusts, with the sole sovereign wealth representative is the Future Fund.
The largest Australian fund by assets, the Future Fund, comes in at 45th place with total assets of US$108 billion. The Australian funds included in the survey collectively accounted for assets under management of around US$665 billion, which equates to approximately 3.6 per cent of the survey asset total.
The Asia-Pacific was largest region in terms of assets under management at 36 per cent, with 34 per cent in Europe, the Middle East and Africa, and 30 per cent in North America.
“While Australian asset owners account for a relatively small portion of the AO100 by assets under management, their absolute size and influence means they have little choice but to take their financial and social responsibilities seriously, and not to shirk the big issues,” said Roger Urwin, global head of investment content at the Thinking Ahead Institute.
“These include the need to develop stronger leadership, respond effectively to regulation, manage agency issues and improve control over outcomes.”
AustralianSuper was the largest Australian superannuation fund included in the survey, while Nulis Nominees (Australia) Limited (NAB/MLC) was the third largest Australian asset owner and, globally, ranked the ninth largest in the outsourced CIO and master trust category.
The top 20 funds total nearly US$11 trillion in assets, accounting for 56 per cent of the total assets of the AO100. The top asset owner was the Government Pension Investment Fund in Japan, with its assets totalling US$1.4 trillion.
The institute’s analysis found that 61 per cent of the assets of the AO100 are held by pension funds, with 32 per cent held by sovereign wealth funds and 7 per cent by outsourced CIOs and master trusts.
“Looking at the bigger picture, the total value of assets controlled by asset owners, as defined by the Thinking Ahead Institute, is around US$55 trillion – a sum that is more than $10,000 for every adult on the planet,” Mr Urwin said.
“This represents a significant portion of the US$420 trillion total global capital pool that exists today. Asset owners’ size and influence make them too important to fail in their mission.”
He added that there is also a more over-arching need for large asset owners to understand the world in which they operate, and over which they potentially hold such influence.
“Over the next decade, this means doing more to institutionalise professionalism, streamline operating models, leverage culture and diversity more effectively and evolve the investment model into increasingly smart and sustainable arrangements,” Mr Urwin said.
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