AsianInvestor is proud to reveal 2019’s AI300, the most comprehensive list of top asset owners in Asia-Pacific by assets under management (AUM).
Now 17 years in the making, we decided it would be a good idea to breathe new life into this unique index. To do so we have dropped commercial banks from our list of official asset owner classification. We have retained central banks, pension funds, both corporate and public, insurance, endowments, sovereign wealth funds, and official institutions.
The decision to exclude commercial banks was taken because we want the AI300 to reflect not just the AUM of asset owners, but their capacity to actively invest it. Commercial banks often have large asset bases, but the majority is not in investible assets as we would consider them. As such, the institution’s scope of “investing” activity is very limited.
In doing so we effectively waved goodbye to 96 participants from last year. Filling the gap wasn’t easy. However, combing through publicly available data, official public statements and credible news sites, we have uncovered a rich new vein of asset owners across Asia.
The names replacing the commercial banks are mostly insurance companies and pension funds, with 27 new entrants coming from Australia alone. This is to be expected; the Australian market is more developed and transparent than many throughout Asia-Pacific. It is possible that we have missed relevant names in the process, and so we welcome any feedback for future review.
Given the dramatic change to the 2019 AI300 rankings, we have chosen to adjust the 2018 ranking by applying our new methodology to it. This should yield a more accurate picture of the progress or decline of an institution’s AUM year-on-year.
For reference, where we were unable to establish the most recent AUM figures we defaulted to last year’s. If we could not establish a figure for 2018, we decided to take the name out of the list. We understand this could skew the results, but we believe it is better to be accurate. Please also note historical figures are based on the exchange rates at the time of first publishing the data.
Scrapping commercial banks from the list has had an immediate effect on Japan and China’s historical dominance at the top of the charts. For the first time South Korea’s National Pension Service, Hong Kong’s HKMA Exchange Fund and Taiwan’s Central Bank of the Republic of China now sit in the top 10 as measured by AUM.
TOP 10 ASIA PACIFIC ASSET OWNERS, BY ASSETS UNDER MANAGEMENT
With the departure of commercial banks, the insurance sector now dominates by asset owner-type, occupying more than half (160) of the list. That said, these organisations only account for a combined AUM of $8 trillion; the 20 central banks on the list were only slightly less hefty, with $7.1 trillion.
TOP ASIAN LIFE INSURERS, BY ASSETS UNDER MANAGEMENT
However you cut it, asset growth has been weak amongst the top 10 asset owners, averaging only 0.98% over the year since we last published the AI300. This is a stark comparison to next 10 (11-20) on the list; their average AUM growth year-on-year reached 9.74%. The overall AUM of our new-look AI300 stood at $24.1 trillion.
China has 40 representatives on the list, up four on last year. Its total AUM trails Japan only slightly, dialling in at $6.5 trillion. The nation boasts the most sovereign wealth funds however, with four making selection. The China Investment Corporation is the largest sovereign wealth fund on the list and the third-largest globally.
Australia now enjoys the largest representation by number of institutions, totalling 66. This means it overtakes Japan as the most broadly represented market. However, the combined AUM of Australia’s asset owners is $1.41 trillion, which pales in comparison to the $6.9 trillion combined AUM of the 39 institutions represented from Japan.
In terms of year-on-year asset growth, non-government pension funds enjoyed the strongest performances, averaging 16.65%. The insurance sector came in a respectable second, with 9.23% growth. Central banks scored 7% and in fourth, the government-run schemes expanded 5.9%. Sovereign wealth funds saw the lowest growth, with an average increase of 3.27%.
The top 10 asset owners registered a surprising 58% average growth in AUM. This was topped by Australia’s New South Wales Treasury Corporation, which saw a 150% rise in assets to $27.5 billion, from $11 billion registered last year. Average growth across the whole AI300 was 10.6%, although given many institutions are new to the list, this can only be considered a broadly representative figure.
As an aside, our revised methodology allows us to welcome a new country to the mix: The Fiji National Provident Fund scraped in at no. 299 with AUM of $2.4 billion. Bangkok Insurance rounds off the list at 300 with $1.8 billion.
MORE TO DO
We intend to celebrate AsianInvestor’s 20th anniversary next year by pushing the AI300 envelope even further. Not content with just publishing AUM figures we will look to delve deeper into what sits underneath them. Where possible we aim to break down the overall AUM figure of each asset owner into four key assets: cash and equivalents, equities, debt, and alternatives.
Look for AsianInvestor's Summer 2019 edition for full coverage of the AI300 rankings. And look out for further analysis of the rankings soon.