GIC, CPF, Temasek among Asia's top 10 asset owners

Asia-Pacific assets comprise more than a third of the discretionary funds under management of the world's 100 largest asset owners, a report by Willis Towers Watson's Thinking Ahead Institute has found.

Discretionary assets of the top 100 asset owners came to US$19 trillion out of an estimated total US$55 trillion.

Asia-Pacific's share of the top 100 was US$6.7 trillion or 36 per cent of the total. EMEA and North America's shares were 34 and 30 per cent, respectively

In the global ranking, Singapore's GIC had 12th spot with assets of US$359 billion. The Central Provident Fund was ranked 17th with assets of US$269 billion. Temasek Holdings held 19th place with US$230 billion.

The Thinking Ahead Institute referred to the asset owners as "the most influential capital on the planet'' as they have discretion to place their capital into any country and any asset class. Thus they have the ability to shape capital markets and play a key role in the smooth running of the global economy.

The largest asset owner globally - in No 1 place - is Japan's Government Pension Investment with US$1.44 trillion. Norway's Government Pension Fund is the second largest with US$1.06 trillion. The third is APG of Netherlands with US$564 billion.

Assets controlled by the world's asset owners - estimated at US$55 trillion - are equivalent to more than US$10,000 per adult on the planet, said Roger Urwin, global head of investment content at the Thinking Ahead Institute.

"Asset owners globally are too important to fail in their mission. They have little choice but to take their financial and social responsibilities seriously and not to shirk the big issues. These include the need to develop stronger leadership, respond effectively to regulation, manage agency issues and improve control over outcomes.''

He added: "There is also a more over-arching need for these 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.''

Of the top 100 asset owners, 61 per cent are held by pension funds, 32 per cent by sovereign wealth funds and 7 per cent by outsourced CIO (chief investment officers) and master trusts.

The report said the emergence of OCIOs and master trusts as a new category of asset owner reflects the significant increase in the degree to which asset owners are delegating key decisions to external organisations. It is the extent of discretion that is delegated that differentiates these platforms from traditional asset management.

This article was first published in The Business Times. Permission required for reproduction.