AUM for the World’s Largest Pension Funds Grew by 10%

The world’s largest 300 pension funds recorded a 10% increase in assets under management (AUM) to reach $22.6 trillion in 2024, up from £20.6 trillion at the end of 2022.

The Thinking Ahead Institute’s Global Top 300 Pension Funds report revealed the funds returned to growth, marking a significant recovery from the 13% decline in assets observed in 2022.

This growth was attributed to relative stabilization in markets, following the high levels of global economic uncertainty in the previous year.

For example, although equity markets returned positive performance across most regions in 2023, full stabilization was not achieved as persistent volatility and high levels of global economic uncertainty continue to add complexity to the investment landscape.

Growth continued to be stronger among the largest schemes, with the top 20 pension funds experiencing a 12% increase in assets over the past year, outpacing their smaller counterparts.

This trend is consistent over time as the compound annual growth rate for the top 20 funds over the last five years was 5.4%, compared to 4.7% for the entire top 300 funds.

The Government Pension Investment Fund of Japan maintained its position as the largest pension fund in the world, which it has held since 2002, with AUM of $1.59 trillion.

However, the Government Pension Fund of Norway has assets of $1.58 trillion, which is just 0.5% smaller can could claim the top spot next year after recording a 22% growth of assets in the 12-month period.

The report also recommended that pension funds reconsider their investment strategies. For example, rising systematic risk creates a compelling case for adapting investment risk thinking and practices.

According to the report, the rise of 3D investing, also known as system-level investing, is both timely and crucial. This approach incorporates the three dimensions of risk, return and impact, recognizing that achieving desired returns relies on a well-functioning, sustainable system.