Pension & Sovereign Wealth Funds

Global Sovereign Wealth Funds Surpass $9trn

Global sovereign wealth fund assets, including Nigeria’s, have reached $9,143,213,790,349, data released by the Sovereign Wealth Fund Institute (SWFI) has indicated. Norway’s Norges Bank Investment Management with $1.4 trillion in assets, is the world’s biggest sovereign wealth fund, the report revealed. It is followed by China Investment Corporation — $1,222,307,000,000; Kuwait Investment Authority , $692,900,000,000; and Abu Dhabi Investment Authority, $649,175,654,400 A breakdown of the sovereign wealth fund market share by region as of September 9, 2021, indicated that Asia accounts for 41.7 per cent of the assets, followed by Middle East with 32.8 per cent and Europe with 18.1per cent. North America accounts for 3.8 per cent of sovereign wealth fund assets; Oceania and Pacific, 2.3 per cent; Africa, 0.9 per cent; and Latin America, 0.4 per cent.
The SWFI noted that the key difference from 2000 to 2012 versus 2012 to 2021 was investment returns in the current period, especially in markets fueled by central bank quantitative easing (QE) action. Global sovereign wealth funds (SWFs) are a major source of institutional investor capital that have the potential to invest for the long term. Nigeria’s sovereign wealth fund, which is being managed by the Nigeria Sovereign Investment Authority (NSIA) was ranked 59th among the 100 top sovereign wealth funds globally. It now has around $3.5 billion in assets, up from $1.5 billion in 2015, when the current administration took over from the President Goodluck Jonathan government. Meanwhile, assets of the world’s 300 largest retirement funds increased 11.5 per cent to $21.72 trillion in 2020, despite the effects of the COVID-19 pandemic which ravaged stock markets and economies in the first half of the year. Nigeria’s current pension assets stands at N12.78 trillion (about $5.2 billion). According to the latest annual survey by Pensions & Investments and Willis Towers Watson PLC’s Thinking Ahead Institute, the top funds’ assets also grew at a faster rate than a year earlier, when they increased by eight per cent. Most markets quickly recovered from the effects of the pandemic, said Marisa A. Hall, London-based co-head of the Thinking Ahead Institute, who added that the S&P 500 index was back to pre-pandemic levels by August 2020 and notched more than an 18 per cent total return in 2020. Over the past five years, assets increased by an annualised 7.9 per cent for the 300 funds and 8.9 per cent for the largest 20 funds in that group. The latest survey showed that the challenging environment of the past year focused retirement plan executives on adapting their investment processes to encompass what Hall described as a total portfolio governance approach rather than traditional strategic asset allocation and three-dimensional investing that includes risk, return and impact.
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