The Asset Owner 100—the world's100 biggest asset owners—account for around $19 trillion, or nearly35 percent, of capital held by all asset owners globally, about $55trillion in assets altogether. (Photo: Shutterstock)

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You might not think so, but big pension funds are among theworld's biggest movers and shakers when it comes to owningassets.

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That's according to a new report from Willis Towers Watson's ThinkingAhead Institute, which points out that the Asset Owner 100—theworld's 100 biggest asset owners—account for around $19 trillion,or nearly 35 percent, of capital held by all asset owners globally,about $55 trillion in assets altogether.

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Says the report, “These institutional investors warrantparticular attention because they have the discretion to placetheir capital into any country and any asset class that suits them.It follows that their policies and their decisions regarding assetallocation and stewardship shape capital markets and are a keyelement in the smooth functioning of the global economy.”

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Out of the three basic types of organization that make up theAO100 are what the report terms

  • the older generation (pension funds, endowments andfoundations)
  • the younger generation (sovereign wealth funds)
  • and the newcomers (outsourced CIO organizations and mastertrusts).

These three groups—asset owners—have five basic qualifyingcharacteristics, and pension funds are the single biggest group ofasset owners that meet all five:

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1. Working directly for a defined group ofbeneficiaries/savers/investors as the manager of their assets in afiduciary capacity under delegated responsibility.

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2. Working with a sponsoring entity, usually a government, partof government, a company or a not-for-profit.

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3. Working within explicit law and possessing animplicit societal license to operate because of its societal trustand legitimacy.

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4. Delivering mission-specific outcomes to beneficiaries andstakeholders in the form of various payments or benefits into thefuture.

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%. Employing a business model that combines a governance budget(essentially resources and processes) and a risk budget (reflectingthe mix of financial assets that delivers on the mission).

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Not only are pension funds holders one of “the most influentialcapital on the planet,” but they account for 60.8 percent of fundassets held by the AO100, as well as 67 percent of the number offunds.

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Of the top 20 funds, the report adds, 50 percent are pensionfunds, and the average assets of pension funds accounted for $170billion, just below the average of $187 billion for all funds.

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