State-owned investment (SOI) assets soared to a new record high of just under US$55 trillion last year, according to figures compiled by niche researcher, Global SWF.
The Global SWF report published early in January found public pension funds weighed in at US$25 trillion by the end of 2024 with central banks (US$16.9 trillion) and sovereign wealth funds (US$13 trillion) boosting the total to US$54.9 trillion.
Buoyed by strong returns across most asset classes sovereign wealth funds (a group including the NZ Superannuation Fund) recorded the highest relative and absolute growth in 2024, adding some US$1.3 trillion year-on-year – or more than 11 per cent: both government pension funds and central banks expanded by US$1 trillion apiece over the same period, equating to respective growth-rates of 6.2 per cent and 4.2 per cent.
“Projections suggest that SOIs could collectively reach US$60 trillion in 2025 and US$75 trillion by 2030, as Gulf nations progress toward their ambitious economic visions,” the Global SWF report says.
The research house also counted the launch of five new sovereign wealth funds last year including the Mutapa fund in Zimbabwe, the Malaysian Sarawak fund and the Future Ireland Funds.
Politicians in both the UK and US, too, made noises in 2024 about creating similar government-run investment vehicles.
Despite the broad global spread of sovereign funds most of the capital in the sector is “highly concentrated in two regions”, the Global SWF report says, with Gulf states accounting for 38 per cent and South East Asia controlling 10 per cent of assets.
“Additionally, two countries dominate the landscape: China, with 20% of total assets, and Norway, with 14%, including the world’s largest SWF.”
Private market and “sizeable and long term equity” deals among sovereign wealth and public pension funds rose slightly in dollar terms year-on-year even as transaction numbers dropped to 585 from 593 in 2023.
“In terms of industries, SWFs and PPFs increased their allocations to real assets, which together accounted for over 50% of total capital deployed despite a modest correction in the real estate sector,” the report says.
However, both deal numbers and dollars allocated were well down on the peak 2021 and 2022 years when funds poured in about US$230 billion and over US$250 billion in 892 and 748 transactions, respectively.
Global SWF, headed by Diego López, also spread some kudos to the Antipodes, naming AustralianSuper as its fund of 2024.
“The superannuation fund now manages US$246 billion for 3.4 million members, and has set up ambitious goals for 2030 and beyond,” López says.
Last year Global SWF ranked the NZ Superannuation Fund as the best-performing sovereign wealth fund (again) as well as awarding the now $80.5 billion operation a perfect score for its sustainability and governance efforts.