Assets under management (AUM) of the “most influential capital on the planet” – the top 100 asset owners – totalled US$23.5 trillion at the end of 2020, growing 15.7 per cent from the previous year, according to new research from the Thinking Ahead Institute (TAI).
Pension funds remain the single biggest group of asset owners globally accounting for 58.1 per cent of assets, followed by sovereign wealth funds (34.7 per cent) and Outsourced Chief Investment Officers (OCIOs) and Master Trusts combined (7.2 per cent).
Commenting on the latest findings, the co-founder of the Thinking Ahead Institute emphasised the immense power held by leading asset owners to drive change on the pathway to net zero.
“This relatively small group of investors are right on the front line of the investment community’s fight to become net zero, and their power is even more concentrated among the top 20, which are responsible for nearly US$13 trillion,” said Roger Urwin.
According to the research, however, there are only three accredited net zero committed organisations in the top 20 and just 14 in the top 100.
“While the pledges from Glasgow Financial Alliance for Net Zero (GFANZ) organisations are critical, the largest asset owners hold the ‘keys to the castle’. Their allocations, ownership muscle and trickle-down influence will be important in opening the door to net zero pathways,” Mr Urwin noted.
Among the top 100 asset owners are six Australian institutional investors led by the Future Fund in 42nd position.
Comparing year-on-year data, the Future Fund, with US$168 billion under management, actually advanced its placement over the year, moving up 15 places, while its peer Australian Super slipped from 43rd to 46th. Aware Super followed in 63rd position, QIC in 75th, TCorp in 76th and QSuper in 96th position.
Noting the need for more mature governance and investment models among the top 100 to yield climate results, Mr Urwin called for immediate action.
“This is a defining moment for asset owners and it’s decision time,” he said.
“They can stay in their narrow mandates or step up with a systems-leadership mindset to play a galvanising industry role that unleashes a torrent of net zero aligned capital.”
