ASIA - The assets of Asia Pacific sovereign pension funds swelled by 20% last year to US$1.8trn, according to Watson Wyatt.
It explained 26 of these funds now constituted 23% of assets of the top 300 funds, of which 11 were from Asia Pacific and totalled $2.8trn, an increase of 16% from the previous year.
Watson Wyatt head of investment consulting for Asia Pacific Naomi Denning said sovereign pension funds in the region had seen a tremendous growth in recent years.
She said: "Strong Asian equity returns in 2007 partly contributed to the boost in asset growth.
"Over the next five years, these increasingly influential institutional investors are likely to become the future role models for institutional funds and thus will have significant implications for services and products offered by fund managers and other intermediaries across the region."
The research found China's National Social Security Fund grew significantly, moving from position 69 to 38 and Singapore's Central Provident fund rose from position 32 to 22.
Denning added that large pension funds, notably the top sovereign funds would continue to grow and be successful if the remained adaptable and prioritised governance and risk management.
She said: "By doing so, they can build long-term investment frameworks that can accommodate shorter-term monitoring and decision making and longer-term journey planning.
"They will be able both to take advantage of new investment content offering higher efficiency and to focus on better management of their 'food chain' to ensure their various activities add up to a value proposition."
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