A ‘Super 6’ has been identified by WTW and the Thinking Ahead Institute, those funds which shape the direction of institutional investing.
In its Asset Owners 100 report, the research body namechecked six superannuation funds, consisting of US$0.7 trillion in assets. These funds are “shaping the direction of institutional investing, setting global investment trends, governance practices and sustainability standards”.
This ‘Super 6’ consists of AustralianSuper, Australian Retirement Trust (ART), Aware Super, UniSuper, which all rank in the top 100 global asset owners, as well as Hostplus and Cbus which sit in the 100th to 150th range.
In particular, Australian Super now has US$212.3 billion ($320.5 billion) in assets under management to stand at 36th position and has risen by 17 positions in the table since 2017, the seventh-largest gainer globally.
Meanwhile, ART has US$186.6 billion while Aware Super has US$110.3 billion, sitting in 47th and 76th respectively. Hostplus has US$71 billion and Cbus has US$57.1 billion.
“While each fund operates within its own regional context and regulatory framework, they are increasingly converging in approach. Common themes include use of total portfolio thinking investing in global assets, a focus on risk and resilience, a business model in which investor partnerships are critical, and wide inter-connectivity of stakeholders,” WTW said.
Martin Goss, co-head of governance and investments for Australia at WTW, said the rise in scale and global recognition underscores the growing importance of the Australian superannuation industry.
“The increase in scale of the Australian funds and the recognition of an Australian ‘Super 6’ cluster totalling USD $0.7 trillion by the Thinking Ahead Institute in this study demonstrates the continuing evolution of the scale of the superannuation industry in Australia,” Goss said.
He also commended the adoption of the total portfolio approach (TPA) across Australian funds, which he said is increasing momentum even despite super fund constraints linked to the design of the superannuation performance test.
“By encouraging collaboration across teams and clarifying accountability for total-fund outcomes, TPA enables more efficient use of capital at the total-portfolio level and supports stronger longer-term performance potential,” he said.
However, Australia ranks on a small scale as part of Asia-Pacific with most capital held in Japan, China and South Korea, whose centrally pooled pension and sovereign systems dwarf the size of individual Australian funds.
When looking at asset owners globally, Europe’s ‘Euro 9’ holds US$3.5 trillion, the Gulf’s five sovereign funds manage US$3.9 trillion and the US ‘Public 7’ and Canada’s ‘Maple 8’ together exceed US$4.5 trillion in combined assets.
The top 100 funds worldwide now oversee US$29.3 trillion, an 11.3 per cent increase driven mainly by sovereign wealth funds and large public pension schemes.
