Norway’s massive sovereign investor, Norges Bank Investment Management, has surpassed Japan’s pension whale Government Pension Investment Fund to become the world’s largest asset owner for the first time, according to a new report by the Thinking Ahead Institute.
NBIM, which was established to manage revenue generated from Norway’s oil reserve in 1998, has assets of KR20,440 billion ($2 trillion). At the time of the report, which measures assets at the end of 2024, it reported assets of $1.7 trillion, leapfrogging GPIF with $1.6 trillion.
Chinese sovereign wealth funds took out third and fourth place, with SAFE Investment Company and China Investment Corporation, respectively holding assets of $1.4 trillion and $1.3 trillion according to the report.
The fifth and final fund with assets above the trillion-dollar mark is the United Arab Emirates’ sovereign investor, Abu Dhabi Investment Authority ($1.1 trillion), according to the Thinking Ahead Institute. The report extracts AUM information and estimates from annual reports, regulators, third-party consultants and direct communications with organisations.
A unique attribute for a fund the size of Norges Bank is that it has also been named the world’s most transparent fund by the Global Pension Transparency Benchmark, marking a rare combination of size and openness.
On a country level, the US remains the biggest institutional market with 28 per cent of the assets from the top 100 asset owners, followed by China with an 11 per cent share and the United Arab Emirates with 7 per cent.
Director at the Thinking Ahead Institute, Jessica Gao, noted that there are five wealth “clusters” forming in the US, Canada, Europe, the Middle East and Australia.
“These pools of asset owners… collectively manage around $13 trillion and are shaping the direction of institutional investing, setting global investment trends, governance practices, and sustainability standards,” Gao said in a media statement.
A well-known group among them is Canada’s Maple 8, which have been trailblazers in the internalisation of investment management and allocation to private markets, enabled by their rigorous fund governance.
But the biggest cluster identified by the report is the ‘Euro 9’, which consists of NBIM, the Netherlands’ APG, PGGM, and MN Services N.V., France’s CDC, Sweden’s AP7, Germany’s Bayerische Versorgungskammer, Denmark’s ATP and the UK’s Universities Superannuation Scheme.
In a further extension of the acronym, the US boasts what the Thinking Ahead Institute is calling the ‘Public 7’, which is made up of seven state and federal-level pension funds, including the $954 billion Federal Retirement Thrift.
But the ‘Gulf 5’ in the Middle East and the ‘Super 6’ in Australia were deemed “less mature” clusters, even though the former collectively manages close to $3.9 trillion in assets. The Australian pension is a relatively young system – only 33 years old – but has huge growth potential because it is a compulsory system.
The report determined these clusters by exercising an AUM limit and while these funds operate in their own regional context, the report identified commonalities, including a total portfolio thinking, a focus on resilience and a willingness for investor partnerships.
As these funds grow, they need to address talent, culture, governance, and leadership as separate factors but also issues at the intersection of them: joined-upness in teams, work flexibility and networks, for example, the report said.
“The funds have expressed concern that often events progress faster than their organisations can react. They are aware that kneejerk responses that are not fully-formed will not advance their cause,” the report said.
“The funds’ CEOs and CIOs are impressive in their inner-outer thinking here – cultivating infacing-savviness – such as authenticity, self-awareness, critical thinking, visionary insight, and emotional intelligence. And outfacing agility – acting as ambassadors, authoritative voices, collaborators, diplomats, and experts.”
Another trend the report identified among asset owners is the increasingly sophisticated use of technologies such as artificial intelligence, but highlighted that most allocators’ use-cases orient towards oversight, decision-support, and governance.
It says this is a reflection of smaller internal teams in asset owner organisations and their reliance on asset managers in day-to-day investment implementation.
“AI has a particularly attractive use case for asset owners in integrating data by blending existing knowledge and beliefs with various fresh data sources and context to reach new levels of decision-useful intelligence,” the report said.
“[But] given the reliance asset owners place on asset managers for technology and data infrastructure, it is increasingly important that the asset managers stay ahead of the curve in adopting these tools.”
