AI300: Sovereign wealth funds fare best among investor types

Sovereign wealth funds were the best performing category for AsianInvestor's 2016 listing of asset owners and the only one whose top 10 members posted positive AUM growth.
AI300: Sovereign wealth funds fare best among investor types

Central banks were not the only category of investor to see their combined assets under management fall in this year's AI300 listing of Asia's biggest asset owners. As we have shown in our previous snapshots of the survey, the full listing of which is available to subscribers to AsianInvestor magazine, the uncertain and highly volatile nature of world markets in the past 12 months has had a big impact on the assets and reserves of the region's biggest institutions.

In fact, sovereign wealth funds represented the best performing category for the 2016 survey, and the only one whose top 10 representatives saw their aggregate AUM grow. They included China Investment Corporation (14% growth), State Administration of Foreign Exchange (-3.68%), Hong Kong Monetary Authority (1.14%) and GIC (0.4%). The best performing sovereign funds in the top 10 were Singapore's Temasek (+19%), and Thailand's Crown Property Bureau (+21%).

The top 10 central banks in the region – which include the giant People's Bank of China (ranked highest in the AI300 every year since the survey began 15 years ago) and the Bank of Japan – saw their assets fall by 7% in dollar terms, as quantitative easing and market interventions took a large chunk out of their asset base.

China and Japan continue to dominate the upper echelons of the list, reflecting the dominant size of the two economies in the region. The top 10 commercial banks category is made up of six Chinese and four Japanese banks. Industrial and Commercial Bank of China (ICBC), which is the new second-ranked institution on the overall list, saw fairly flat asset growth for the year in dollar terms, but still shaded out Agricultural Bank of China. Nonetheless, the latter moved up from fourth to third place overall, enjoying an impressive 7.6% growth in dollar terms.

Hong Kong-based insurer AIA is the only institutions among the top 10 insurance companies not from China or Japan. Its 0.66% growth in dollar terms reflected a fairly flat year for the company in US dollar growth terms. The biggest insurer, Japan Post Insurance, was the only one in the top 10 to post negative growth (-2.54%), with five of the 10 expanding 4% or more and Ping An putting on 12.54%. That was not quite Anbang territory in terms of growth, but impressive nonetheless in a tough year for all our asset owners.

Here is a snapshot of the data by category of asset owner:

Date by asset category
Top 10 asset owners by category 2016 2015 % change
Central bank 6,595,110    7,087,718    -7.0%
Commercial bank 8,650,434 8,989,384 -3.8%
Insurance company 3,068,129 3,183,674 -3.6%
Official institution 1,955,972 2,348,371 -16.7%
Pension fund 2,748,065 2,754,017 -0.2%
Sovereign wealth fund 2,506,332 2,384,840 +5.1%

Note: Most of the data is for the year to December 2015 or March 2016, though some data does vary from this

Asset assessment

To compile the AI300 survey we use a consistent basis for calculating total invested and investible assets. Looking at each organisation’s balance sheet, we take account of various holdings that represent actual investments. We do not include loans or intangible assets. We also do not include property unless it is specifically expressed as investment property.

Putting the survey together is not simple. It can be challenging to gain consistently expressed data from organisations, and often this information is only provided in local languages. That said, regional organisations are providing increasingly detailed balance sheets, which makes data collation a little easier.

As in previous years, asset numbers for sovereign funds and some official institutions are based on accepted industry estimates, and confirmed by input from a number of industry experts.

The AI300 is the result of detailed research by AsianInvestor’s team, supported by input from our sponsor firms Willis Towers Watson (WTW), Goldman Sachs Asset Management and Nomura Research Institute. Kwangho Shin and the WTW team in Seoul helped us with the Korean numbers, while Sadayuki Horie of NRI provide the data on Japanese institutions. Bernice Cornforth, AI’s head of polls, compiled the listing and produced the individual tables.

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