Australian super funds have moved up in the rankings of the world’s largest pension funds, research by WTW’s Thinking Ahead Institute and Pensions & Investments has revealed.
The latest Global Top 300 Pension Funds report, published by the two firms, showed that AustralianSuper ranked in 18th position with US$177.45 billion in assets, up from a year earlier when the country’s largest super fund came in 20th with US$196.06 billion.
“Australia had 16 funds included in the top 300, with most improving their ranking on last year,” said Ellie Boston-Clark, co-head of governance, investments Australia, at WTW.
“AustralianSuper remained the only fund in the top 20 globally, but the merger of Sunsuper and QSuper to create the Australian Retirement Trust saw it move to 21st place this year.”
The Future Fund was the next Australian fund in this year’s rankings. The sovereign wealth fund held onto 26th position with US$133.62 billion in total assets.
Aware Super moved up from 46th to 41st with US$99.32 billion, UniSuper rose from 77th to 67th with US$68.86 billion and Hostplus jumped from 127th to 84th with US$54.51 billion.
Meanwhile, Cbus, which ranked 125th a year ago, just managed to join the top 100, placing in 99th with US$47.63 billion.
Rest came in 107th with US$44.71 billion in assets, HESTA was 109th with US$44.42 billion, Commonwealth Superannuation Corporation (CSC) was 132nd with US$37.77 billion, and State Super was 174th with US$28.42 billion.
Western Australia’s government employee super fund GESB ranked 205th (US$25.01 billion), ESSSuper was 222nd (US $23.22 billion), and Super SA was 231st (US$22.40 billion).
All of the aforementioned Australian funds improved their position compared to a year earlier. Additionally, Equip Super (US$20.16 billion) and Spirit Super (US$17.11 billion) joined the top 300 for the first time, coming in 255th and 292nd, respectively.
Ms Boston-Clark noted that ongoing consolidation in the super industry had helped boost the position of Australian funds in the latest rankings despite a weakening Aussie dollar.
“We expect the prominence of Australian funds among the top global asset owners to continue in coming years, but as their scale grows, in an ever more challenging and uncertain environment, they will need to shift their focus increasingly to a strong governance focus,” she said.
“This is essential to maintain long-term stability and ensure they meet their performance objectives.”
AustralianSuper is expecting to grow to more than $500 billion in member assets over the next five years, while ART has similarly set its sights on reaching $500 billion by 2030.
Turning to the global rankings, the Government Pension Investment Fund of Japan held onto the top spot with US$1.45 trillion, followed by the Government Pension Fund of Norway (US$1.30 trillion), and the National Pension Service of South Korea (US$706.50 billion).
Overall, the top 300 pension funds were reported to have suffered a 12.9 per cent drop in assets, from US$23.6 trillion at the end of 2021 to US$20.6 trillion in 2022. This marked the first fall since 2018 and the fastest annual decline in the study’s 20-year history.
“We sounded a note of caution last year when reporting on a previous record. In last year’s research, we anticipated rising inflation and interest rate pressures, as well as the potential for slowing growth the following year,” said Jessica Gao, director at the Thinking Ahead Institute.
“With the latest data, we have witnessed the drop in the pension assets, with a fragile global economy seeing equity and bond markets reverse previous gains.”
The top 20 pension funds accounted for 41.5 per cent of the assets under management in this year’s rankings, up from 41.0 per cent in the year prior. The assets of these top 20 funds fell by 11.8 per cent, slightly better than the decline experienced for the top 300 overall.
