Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Japan û which has a 15% share of total pension fund assets worldwide û is still home to the largest pension funds in Asia-Pacific and is still ranked second in the world next to the US, which has a 43% share. Although Japan has maintained its standing in the world rankings for pension funds, its share of the total has been sliding from 21% in 2004 and 17.6% in 2005.
JapanÆs Government Pension Investment Fund is still the worldÆs largest pension fund û a position it has held since 2002 û with $936 billion in assets. A far second is NorwayÆs Government Pension with $286 billion, followed by South KoreaÆs National Pension with $203 billion, South AfricaÆs Government Employees Pension Fund with $178 billion, and TaiwanÆs Postal Savings Fund with $128 billion.
Sovereign pension funds accounted for $2.4 trillion in assets, or around 23% of the total worldwide. The latest figure is a sharp increase from just under $1 trillion three years ago.
ôSovereign funds are becoming increasingly influential investors,ö Watson Wyatt notes in the report.
The top 20 pension funds account for $3.8 trillion in assets, or around a third of the total worldwide. Other Asian pension funds in the top 20 are MalaysiaÆs Employees Provident Fund ranked seventh with $82 billion in assets, SingaporeÆs Central Provident Fund ranked eighth with $70 billion in assets, ChinaÆs National Social Security ranked 12th with $36 billion in assets, and IndiaÆs Employees Provident ranked 13th with $32 billion in assets.
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Hesitancy aside, institutional investors eye Australia and Japan as promising geographies for private debt investments within Asia Pacific, with Greater China and Korea on the periphery.
While Asia still lags the global average, interest in sustainable projects is growing fast; the only thing needed now is the expertise to drive growth
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.