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Worldwide pension fund assets increased in value in 2016

07 September 2017

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Assets under management at the world's largest pension funds increased in value by 6.1%, $15.7 trillion in 2016, according to research from Willis Towers Watson.

The figures from the world's 300 largest pension funds, show a return to growth year-on-year after a 3.4% decline in 2015, while cumulative growth in assets since 2011 now stands at 23.4%.

The top 20 funds in the research by asset size experienced a higher increase than the overall ranking, growing assets by 7.1% over the period.

Figures also showed that the top 300 pension funds together now represent 43.2% of global pension assets, rising from 42.5% in 2015, as estimated against figures from Willis Towers Watson's Global Pensions Asset study.

Roger Urwin, global head of investment content at Willis Towers Watson, said: "The search for attractively priced assets at acceptable risk continues to be a driving force in shaping the fortunes of pension funds and their ability to meet respective missions and objectives."

"This is increasingly hard and reduces the shine from a year in which the largest asset owners have been able to achieve superior growth in this year's figures."

Urwin added that the ability of leading asset owners to adapt to the changing investment environment, through improvements in governance and the ability to learn from their peers, has been central to the result.

He said: "The desire of asset owners to implement best-practice and sound governance across their organisation has strengthened and will be a key factor in their future success."

According to the research, North American funds have shown the most noticeable annualised growth rate over the last five years, growing by 6.7% during the period.

Funds from Europe and Asia-Pacific regions showed annualised growth rates of 3.1 % and 2.8% respectively.

The US continues to hold its position as the country with the largest share of pension assets across the top 300 funds, representing 38.6% spread across 134 funds.

Meanwhile, Canada has overtaken the UK as the fifth largest country by share of pension fund assets, accounting for 5.4% (5.3% in 2015).

The UK now accounts for 4.8%, falling from 5.4% of total assets in 2015.

First published 07.09.2017

Lindsay.sharman@wilmingotnplc.com