Who’s in Asia ex-Japan’s $15.6 trillion club?

Capital growth reshapes AsianInvestor’s annual ranking of the region’s biggest institutional investors by asset size.
Who’s in Asia ex-Japan’s $15.6 trillion club?

The 200 largest institutional investors in Asia ex-Japan saw year-on-year assets grow to $15.6 trillion, according to AsianInvestor magazine.

The biggest change in the rankings was the treatment of People’s Bank of China/State Administration of Foreign Exchange, which saw its assets in the rankings actually decline.

Jame DiBiasio, editor of AsianInvestor, explains that last year the rankings included renminbi assets on PBoC’s balance sheet. “Readers didn’t find this helpful so we have reverted to just counting the FX holdings,” he says.

The result wipes around $800 billion off this year’s total. Despite that, the 2011 figures are $1.2 trillion higher year on year. Accounting for the revised calculation for PBoC, AsianInvestor finds the other institutions in the universe actually grew by about $2 trillion in total assets.

“This gain is a reflection of the astonishing accumulation of capital throughout Asia,” says DiBiasio. “This growth is fairly universal, by market and by investor type.”

Although central banks remain big institutions, thanks to their FX reserves, which currently total nearly $4.6 trillion, this year has seen commercial banks’ cash and securities become the biggest asset pool.

With nearly $5.5 billion of portfolio assets on their balance sheets, commercial banks – notably those from China – have amassed incredible warchests. The AI200 only counts commercial banks’ securities and cash, and excludes loans and other assets.

DiBiasio says this reflects China’s huge credit expansion that began in early 2009, coupled with the PBoC’s decision to keep interest rates low and the lack of a fully developed local bond market.

AsianInvestor recorded $1.7 trillion of assets at official institutions, which includes postal savings, cooperatives, and government slush funds.

Sovereign wealth funds from Asia have about $1.2 trillion of assets, while pension funds (mostly public) have another $1 trillion. Financial holding companies and endowments make up the rest.

In terms of geography, China accounts for nearly half the total assets under management, with $8.6 trillion. South Korea is a distant second (but the fastest growing), with $2.1 trillion, and Taiwan is third, at $1.3 trillion.

The full results of the rankings are available in the July edition of AsianInvestor magazine. Excel versions of the rankings, plus historical data, are available to full package subscribers. For details, please email Richard Santoro or call him on +852 3175 1980.

¬ Haymarket Media Limited. All rights reserved.