Asia’s Leading Investors: Taking the long view on instos
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AsianInvestor first began analysing the leading asset owners in Asia Pacific in 2012. In the years since, there have been some notable developments in the combined assets of the region’s largest investors.
Our lists have changed in format over the eight-year period, so we have now opted to confine our research to the top 150 asset owners each year, to best compare like-for-like data.
Propelled by strong economic expansion relative to the global rate and a rise in middle-class population, the region’s biggest 150 investors have seen their assets under management expand by 23% to $22.6 trillion this year from $18.4 trillion in 2012 (see figure 1).
The investors had a relatively fallow period between 2013 and 2016, during which time their combined AUM actually fell from $20 trillion to $19.75 trillion. However, the biggest asset owners rebounded over 2017 and 2018, saw a slight slip in 2019 and then posted strong asset growth last year.
Propelled by strong economic expansion relative to the global rate and a rise in middle-class population, the region’s biggest 150 investors have seen their assets under management expand by 23% to $22.6 trillion this year from $18.4 trillion in 2012 (see figure 1).
China, whose institutional investors have historically trailed those in Japan by asset size, has gradually caught up with the world’s third-largest economy. The gap between the two countries' share of the top 150 investors’ total assets has narrowed to just 2.5 percentage points this year, down from three percentage points in 2019.
This narrowing has underscored the expansion of China’s economy, and that of local asset owners by extension, over the years.
The investment portfolios of China Investment Corporation and China Life Insurance, for example, have swelled 10% and 18% year-on-year respectively; their latest AUM figures amounted to $941.4 billion and $425 billion.
THE FASTEST GROWERS
The make-up of investor type has varied over this period. Central banks have always been Asia Pacific’s largest combined asset owner bloc in the top 150 asset owners, but they have seen their share of the list's combined assets drop from around 36% in 2012 to about one-third today (see table below). At the same time, insurers and sovereign wealth funds have seen their AUM shares rise to 31% and 12%, respectively.
The rise in life insurer assets is down to a corresponding increase in their gross written premiums (GWP) across the region. The insurers saw their premium amounts climb 21.5% to $1.01 trillion in 2018 since 2013, according to an industry report published in December 2019 by advisory firm EY.
The region’s life insurance firms look set to enjoy further asset growth in the years to come. Asia Pacific lifers’ insurance penetration rate still sits at a relatively low 3.8% of regional GDP. Europe had a penetration rate of 4.35% as of 2018, according to the latest industry figures from Statista.com.
In addition, Asia Pacific insurers reported €764 billion ($856.58 billion) of GWP in 2018, an increase of 17.36% over the €650.99 billion recorded in 2013.
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There's also been a notable shift among the region’s pension funds. Increasing saving rates across Asia, and especially in Australia and Japan, have driven pension funds' assets slowly up since 2014.
The pension funds are likely to continue witnessing more asset growth, in large part because people will keep putting money away towards retirement.
This article was adapted from the 20th anniversary edition of AsianInvestor, which was originally published in June.