Global SWF Annual Report 2023: State-Owned Investors Total $32.4 Trillion AUM, Top 10 Investors are China CIC, Japan GPIF, Norway BNIM, China SAFE IC, UAE ADIA, Kuwait KIA, Singapore GIC, United States FRTIB, Saudi Arabia PIF & South Korea NPS
7th July 2023 | Hong Kong
The Global SWF has released the Global SWF Annual Report 2023 providing key insights into State-Owned Investors (SOIs) – Sovereign Wealth Funds (SWF) & Public Pension Funds (PPF). In 2022, the State-Owned Investors total AUM is at $32.4 trillion (Sovereign Wealth Funds AUM $11.4 trillion, Public Pension Funds AUM $21 trillion) and is forecasted to grow to $50.5 trillion in 2030 with at least 500 State-Owned Investors. In 2022, the top 10 State-Owned Investors in 2022 – CIC (China) $1.35 trillion, GPIF (Japan) $1.32 trillion, NBIM (Norway) $1.14 trillion, SAFE IC (China) $980 billion, ADIA (UAE) $993 billion, KIA (Kuwait) $769 billion, GIC (Singapore) $690 billion, FRTIB (United States) $690 billion, PIF (Saudi Arabia) $620 billion, and NPS (South Korea) $608 billion. In 2022, the top 8 SWFs by GSR Scoreboard (Governance, Sustainability and Resilience): Temasek (Singapore) $298 billion, NZ Super Fund (New Zealand) $39 billion, NSIA (Nigeria) $3 billion, Future Fund (Australia) $168 billion, ISIF (Ireland) $16 billion, COFIDES (Spain) $4 billion, PIF (Saudi Arabia) $700 billion, and KIC (South Korea) $169 billion. In 2022, State-Owned Investors Return of Asset Classes in 2022 are Fixed Income -14.8%, Equities -18.7%, Real Estate -28.4%, Infrastructure -3.7%, Private Equity -31.7%, Hedge Funds -3.6%. The top 8 State-Owned Investors Investment by Sector – Real Estate 20%, Technology 18%, Financial 17%, Consumer 9%, Industrials 8%, Healthcare 8%, Infrastructure 7%, Energy 3%. In 2022, State-Owned Investors concluded 747 deals totalling $261 billion, with average deal size of $357 million. The 2 largest deals in 2022 are by Temasek (Singapore) acquired Element Materials for $7 billion, GIC (Singapore) acquired American REIT Store Capital for around $7 billion (Oak Street invested another $7 billion for total of $14 billion). Key State-Owned Investors Major Trends – Middle Eastern White Knights, Green Investing, Hedge Funds, Infrastructure, Indonesia. See key findings & summary below. View report here
“ Global SWF Annual Report 2023: State-Owned Investors Total $32.4 Trillion AUM, Top 10 Investors are China CIC, Japan GPIF, Norway BNIM, China SAFE IC, UAE ADIA, Kuwait KIA, Singapore GIC, United States FRTIB, Saudi Arabia PIF & South Korea NPS “
Global SWF Annual Report 2023: State-Owned Investors Total $32.4 Trillion AUM
The Global SWF has released the Global SWF Annual Report 2023 providing key insights into State-Owned Investors (SOIs) – Sovereign Wealth Funds (SWF) & Public Pension Funds (PPF).
Global SWF Annual Report 2023:
Summary:
- 2022 Total State-Owned Investors AUM – $32.4 trillion (2021: $33.6 trillion
- 2022 Sovereign Wealth Funds AUM – $11.4 trillion ($11.5 trillion)
- 2022 Public Pension Funds AUM – $21 trillion ($22.1 trillion)
- State-Owned Investors 2030 Forecast AUM – $50.5 trillion
- No. of State-Owned Investors in 2030 – At least 500 State-Owned Investors
- Top 10 State-Owned Investors in 2022 – CIC (China) $1.35 trillion, GPIF (Japan) $1.32 trillion, NBIM (Norway) $1.14 trillion, SAFE IC (China) $980 billion, ADIA (UAE) $993 billion, KIA (Kuwait) $769 billion, GIC (Singapore) $690 billion, FRTIB (United States) $690 billion, PIF (Saudi Arabia) $620 billion, NPS (South Korea) $608 billion
- Top 8 SWFs by GSR Scoreboard (Governance, Sustainability and Resilience): Temasek (Singapore) $298 billion, NZ Super Fund (New Zealand) $39 billion, NSIA (Nigeria) $3 billion, Future Fund (Australia) $168 billion, ISIF (Ireland) $16 billion, COFIDES (Spain) $4 billion, PIF (Saudi Arabia) $700 billion, KIC (South Korea) $169 billion
- State-Owned Investors Return of Asset Classes in 2022 – Fixed Income – 14.8%, Equities -18.7%, Real Estate -28.4%, Infrastructure -3.7%, Private Equity -31.7%, Hedge Funds -3.6%
- State-Owned Investors Investment by Region – North America $93.5 billion, Europe $63 billion, Emerging Markets $53.5 billion, Developed Asia-Oceania $51.1 billion
- Top 8 State-Owned Investors Investment by Sector – Real Estate 20%, Technology 18%, Financial 17%, Consumer 9%, Industrials 8%, Healthcare 8%, Infrastructure 7%, Energy 3%
- Top 5 State-Owned Investors by Capital Deployed in 2022 – GIC (Singapore) $40.3 billion, Abu Dhabi Investment Authority ADIA (Abu Dhabi, UAE) $25.9 billion, Public Investment Fund PIF (Saudi Arabia) $20.7 billion, Temasek (Singapore) $13.5 billion, Canada Pension Plan CPP (Canada) $12.1 billion
- State-Owned Investors Transactions & Value in 2022 – 747 deals totalling $261 billion
- Average Deal Size in 2022 – $357 million
- 2 Largest deals in 2022 – Temasek (Singapore) acquired Element Materials for $7 billion, GIC (Singapore) acquired American REIT Store Capital for around $7 billion (Oak Street invested another $7 billion for total of $14 billion)
- State-Owned Investors Major Trends – Middle Eastern White Knights, Green Investing, Hedge Funds, Infrastructure, Indonesia
- 4 Types of State-Owned Investors – SWF-Stabilization Funds, SWF-Savings Funds, SWF-Strategic Funds, Public Pension Funds (PPFs)
Global SWF Annual Report 2023:
1) State-Owned Investors Overview (Sovereign Wealth Funds & Public Pension Funds)
State-Owned Investors (SOIs) AUM 2022 (2021)
- Total – $32.4 trillion ($33.6 trillion)
- Sovereign Wealth Funds AUM – $11.4 trillion ($11.5 trillion)
- Public Pension Funds AUM – $21 trillion ($22.1 trillion)
2030 AUM Forecast
- State-Owned Investors AUM – $50.5 trillion
- Sovereign Wealth Funds – $17.3 trillion
- Public Pension Funds – $33.2 trillion
No. of State-Owned Investors in 2030 – At least 500
Top 15 State-Owned Investors 2022 AUM:
- CIC (China) – $1.35 trillion
- GPIF (Japan) – $1.32 trillion
- NBIM (Norway) – $1.14 trillion
- SAFE IC (China) – $980 billion
- ADIA (UAE) – $993 billion
- KIA (Kuwait) – $769 billion
- GIC (Singapore) – $690 billion
- FRTIB (United States) – $690 billion
- PIF (Saudi Arabia) – $620 billion
- NPS (South Korea) – $608 billion
- APG (Netherlands) – $522 billion
- NSSF (China) – $474 billion
- QIA (Qatar) – $450 billion
- CalPERS (United States) – $430 billion
- CPP (Canada) – $387 billion
Top 15 State-Owned Investors 2030 AUM:
- PIF (Saudi Arabia) – $2 trillion
- CIC (China) – $1.99 trillion
- NBIM (Norway) – $1.96 trillion
- APG (Netherlands) – $1.59 trillion
- GPIF (Japan) – $1.52 trillion
- SAFE IC (China) – $1.44 trillion
- ADIA (UAE) – $1.39 trillion
- NPS (South Korea) – $1.12 trillion
- KIA (Kuwait) – $1 trillion
- GIC (Singapore) – $1 trillion
- FRTIB (United States) – $874 billion
- CPP (Canada) – $829 billion
- QIA (Qatar) – $777 billion
- CalPERS (United States) – $738 billion
- NSSF (China) – $700 billion
Top 12 SWFs by GSR Scoreboard (Governance, Sustainability and Resilience):
- Temasek (Singapore) $298 billion – 100%
- NZ Super Fund (New Zealand) $39 billion – 100%
- NSIA (Nigeria) $3 billion – 100%
- Future Fund (Australia) $168 billion – 96%
- ISIF (Ireland) $16 billion – 96%
- COFIDES (Spain) $4 billion – 96%
- PIF (Saudi Arabia) $700 billion – 92%
- KIC (South Korea) $169 billion – 92%
- NBIM (Norway) $1.3 trillion – 88%
- Mubadala (Abu Dhabi, UAE) $276 billion – 88%
- Bpifrance (France) $50 billion – 88%
- FTF (Norway) $32 billion – 88%
2) State-Owned Investors Returns, Investments & Deals
State-Owned Investors Return of Asset Classes in 2022 (Benchmark):
- Fixed Income: -14.8% (S&P500B)
- Equities: -18.7% (S&PGL1200)
- Real Estate: -28.4% (S&P500RE)
- Infrastructure: -3.7% (S&PGLInfra)
- Private Equity: -31.7% (S&PLPE)
- Hedge Funds: -3.6% (EHHFI)
State-Owned Investors Investment by Region:
- North America – $93.5 billion
- Europe – $63 billion
- Emerging Markets – $53.5 billion
- Developed Asia-Oceania – $51.1 billion
Top 8 State-Owned Investors Investment by Sector:
- Real Estate – 20%
- Technology – 18%
- Financial – 17%
- Consumer – 9%
- Industrials – 8%
- Healthcare – 8%
- Infrastructure – 7%
- Energy – 3%
Total: 747 deals totalling $261.1 billion
Top 10 State-Owned Investors by Capital Deployed in 2022:
- GIC (Singapore) – $40.3 billion
- Abu Dhabi Investment Authority, ADIA (Abu Dhabi, UAE) – $25.9 billion
- Public Investment Fund, PIF (Saudi Arabia) – $20.7 billion
- Temasek (Singapore) – $13.5 billion
- Canada Pension Plan, CPP (Canada) – $12.1 billion
- Mubadala (Abu Dhabi, UAE) – $11.3 billion
- Caisse de dépôt et placement du Québec, CDPQ (Canada) – $10.3 billion
- Abu Dhabi Developmental Holding Company PJSC, ADQ (Abu Dhabi, UAE) – $8.7 billion
- Ontario Teachers’ Pension Plan, OTPP (Canada) – $7.9 billion
- Qatar Investment Authority, QIA (Qatar) – $7.1 billion
State-Owned Investors Transactions & Value:
- 2022 – 747 deals totalling $261.1 billion
- 2021 – 890 deals totalling $229.9 billion
- 2020 – 551 deals totalling $171.3 billion
Average Deal Size in 2022 – $357 million
2 Largest deals in 2022:
- Temasek (Singapore) acquired Element Materials for $7 billion from Bridgepoint
- GIC (Singapore) acquired American REIT Store Capital for around $7 billion (Oak Street invested another $7 billion for total of $14 billion)
3) Types of State-Owned Investors
4 Types of State-Owned Investors (Sovereign Wealth Fund ~ SWF):
- SWF-Stabilization Funds – Smallest group. Defined as “rainy-day funds” setup as buffer mechanism that can cover fiscal deficits in times of uncertainty. Usually highly liquid funds that allocate on average 90% of their capital into stocks and bonds.
- SWF-Savings Funds – Also known as future generations funds. Less pressure for short-term liquidity, invest more aggressively. Allocate an average of 22% to private markets with combined AUM of $6.9 trillion. Largest investors in real estate, infrastructure and private equity. Examples – Abu Dhabi (UAE) ADIA, Norway NBIM and Singapore GIC.
- SWF-Strategic Funds – Most popular choice among governments, combining financial goal with an economic mission including contributing to domestic development. Some set up without much “wealth” and seek to catalyze foreign capital and fundraise from other SOIs. Examples – Ireland ISIF, Malaysia Khazanah and Russia RDIF.
- Public Pension Funds (PPFs) – Similar in behaviour to SWFs. Both groups keep similar strategies and asset allocations and can be seen competing for the same stakes in public auctions and private placements around the world. Examples – Canada CPP, Japan GPIF and Netherlands APG.
4) State-Owned Investors Major Trends
A) Middle Eastern White Knights
- 40 Middle Eastern SOIs manage $4.8 trillion
- 26 of 60 mega-deals (> $1 billion) by Middle East SWFs in 2022
- 17 of 26 mega-deals into American & European assets in 2022
- Largest investment $4 billion by Abu Dhabi Investment Authority, ADIA (Abu Dhabi, UAE) into Ardian’s fund ASF IX, and additional $2 billion for co-investment
- Carlyle acquired 5% stake in Silver Lake (private equity firm) in 2021
- Abu Dhabi Developmental Holding Company PJSC, ADQ (Abu Dhabi, UAE) acquire shares in Vistria (private equity firm) in 2022
B) Green Investing: Here to Stay
- Renewable energy highly attractive infrastructure sub-segment for SOIs, both offering the stable, inflation hedging qualities of infrastructure and supporting net zero objectives.
- Pension funds reacting to policy holders’ demands for greater environmental sensitivity with several joining the Net Zero Asset Owners Alliance
- In 2022, SOI investment in renewables assets totalled $18.7 billion
- North America & Western Europe are the most popular destinations due to opportunity and positive regulatory environment
- In 2022, SOIs increased investment in European renewables by 45% to $8.4 billion. Developed Asia and Pacific investments doubled to $4.7 billion
- Canadian funds the biggest source of capital with 33%, Gulf investors contributed 29% and Singapore 26%. These 3 jurisdictions represented almost 90% of SOI renewables capital.
- The largest single investor in renewables in 2022 is Singapore GIC. The 2nd largest investor is (Abu Dhabi, UAE) Mubadala.
- Transition to low carbon energy sources is at the top of the agenda of Gulf SWFs – to diversify domestic and regional economies and gain exposure to progress towards the Paris Agreement’s net zero goals. Top selection – Hydrogen production, particularly “green” hydrogen which offers a clean alternative to fossil fuels.
- India remained the prime target of SOIs in emerging markets, despite being the world’s 4th biggest emitter after China, the US, and the EU.
C) Hedge Funds
- SWFs & PPFs hold about $500 billion in hedge funds, 25% of the total hedge fund industry size.
- Largest allocators in absolute terms among SWFs are (UAE) ADIA, (China) CIC and (Kuwait) KIA, representing almost half of all the capital allocated by all SWFs to hedge funds.
- Public pension funds have traditionally been more conservative due to the public scrutiny. In 2016, several funds including CalPERS, NYCERS and ISBI drop their absolute returns programs due to the “excessively high” management fees, compared to the produced returns.
- Endowment funds continue to present much larger portfolios, in relative terms. Harvard MC, Columbia IMC, and UC Investments’ endowments allocate as much as 33% to hedge funds, and the average among the USA’s top 10 endowments is 25%.
- Sovereign investors cover all well-known strategies, from diversifiers to return-enhancers. Macro strategies key focus on Commodity Trading Advisors (CTAs), which SOIs are very comfortable with, active trading or currency plays, including discretionary.
- Other popular hedge fund strategies are equity-hedge (fundamental growth and value), event-driven (merger arbitrage, distress, etc.), and relative value.
D) Infrastructure
- Transportation – SOI direct investment in transportation averaged $24 billion annually from 2018
- Energy – Investments in finite sources of energy fell below $7 billion.
- Rest of capital invested in energy went to renewable sources, which has quickly eaten a large share of the pie since the start of the pandemic.
- In 2022, SOI investment in renewables assets totalled $18.7 billion
- In 2022, SOI investment in utilities assets totalled $15 billion
D) Indonesia
- Population of 260 million, Indonesia is a rapidly developing market with GDP growth exceeding 5% in 2022.
- Foreign SWFs and PPFs have emerged as the country’s leading financiers.
- Indonesia has attracted around $15 billion in inward investment by overseas state-owned investors, into full range of asset classes and market segments, logistics, real estate, oil fields, roads, e-commerce etc.
- 49% is in infrastructure with a further 42% in private equity and 10% in real estate.
- Within the private equity sector, $2 billion allocated to venture capital in Indonesia including Tokopedia and Gojek (both now merged into GoTo), Traveloka and Bukalapak.
- Rest of the investment activity in direct investment, channeled through private equity funds or in co-investments.
- Singapore’s Temasek represents 22% of the investment value, followed by its stablemate GIC with 9%, Abu Dhabi’s ADIA with 7%, Canada’s CDPQ with 6%, and Qatar’s QIA, Malaysia’s Khazanah, and China’s CIC, with 5% each.
- Indonesia’s new strategic SWF INA is driving investment with key focus in infrastructure and green energy transition.
5) Case Study – Fund of the Year: Caisse de dépôt et placement du Québec, CDPQ (Canada)
- 2022 AUM: $304 billion
- Returns: -7.9% 2022 (average SOI returns -9.7%)
CDPQ invests on behalf of 47 different depositor groups, with three quarters of its capital comes from three pension plans: Finances Québec, Retraite Québec and RREGOP. It also manages the monies of several insurance plans, including those in the healthcare and automobile sectors. CDPQ has become one of the world’s most sizeable, active, and sophisticated global investors. In the past ten years, the fund has consistently been among the top 10 investors, and is also a frequent seller, identifying the right opportunities to monetize assets domestically and overseas. The Québec fund has been a trailblazer when it comes to sustainability and has put its money where its mouth is. In 2018, it sent a strong message by directly tying employees’ variable compensation to the achievement of climate targets. In 2021, it renewed its climate ambitions with an aggressive set of objectives, and its President and CEO, Charles Emond, currently sits on the Steering Group of the UN-convened Net-Zero Asset Owner Alliance.
CDPQ Asset Allocation:
- Fixed Income – 30%
- Equities – 25%
- Real Estate – 12%
- Infrastructure – 13%
- Private Equity – 20%
CDPQ Investment by Region:
- Canada – 33%
- United States – 38%
- Europe – 12%
- APAC – 6%
- Rest of the World – 11%
CDPQ has evolved significantly as an organization in the past decade. Just like its Canadian peers, it has a sound corporate governance model, with a Board of Directors of up to 15 members, two thirds of which must be independent. The fund is driven by the CEO and senior executives of the various investment units. In addition to the different asset classes, CDPQ has 3 subsidiaries with separate boards and directors.
- Ivanhoé Cambridge: $52 billion real estate (equity) investor with a mixed portfolio across 15+ countries. It recently opened an office in Sydney.
- Otéra Capital: $21 billion real estate (debt) investor with a portfolio in 37 areas of North America. Its 150+ staff sit in Montréal, Toronto, and New York. The latter was opened in June 2022 with a former exec of Related.
- CDPQ Infra: Chaired by CDPQ’s CEO, the infrastructure subsidiary acts as a principal owner and contractor for major projects and focuses on building sustainable transport infrastructure for communities like the REM light rail network in Montréal.
CDPQ announced its first climate strategy in October 2017 in the wake of the Paris agreement. CDPQ pursues a comprehensive reporting of its sustainability actions and produces regular reporting of its carbon footprint, which reveals the impact of its investments on the environment. Approximately 80% of the fund’s global portfolio are either low-intensity or carbon neutral (“green”) assets.
CDPQ itself employs 1,454 staff, 89% of whom sit in Canada and 162 overseas, in 9 different posts. São Paulo was the latest office to be opened in 2018, in order to co-manage the US$ 14 billion Latin American portfolio, along with Mexico City. Eduardo Farhat replaced Denis Jungerman as the head of Brazil in August 2022.
Global SWF
At Global SWF, we focus on State-Owned Investors, including Central Banks (CBs), Sovereign Wealth Funds (SWFs), and Public Pension Funds (PPFs), because it is what we know well. We are industry experts that have worked with these investors on the ground for many years, amassing unique knowledge and relationships. We track all the world’s Sovereign Investors and provides insights into the strategies, portfolios and executives of the most prolific funds in terms of size, investment activity and market interest. Our ultimate mission is to promote a better understanding of and connectivity into SWFs and PPFs, through 3 different verticals:
- Consulting: peer benchmarking and investment facilitation, among others;
- Data & Research: the most thorough platform of strategies, portfolios and staff;
- SWF Academy: the world’s only SWF-focused Exec Ed program.
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