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Research

Global Public Investor Assets Rise to $33.5 Trillion in 2016

Report finds pension funds spurred increase in worldwide asset total.

By Michael Katz

The total combined assets of public pension funds, sovereign funds, and central banks grew to $33.5 trillion by the end of 2016, driven mostly by pension funds, according to a report from think tank Official Monetary and Financial Institutions Forum (OMFIF).

According to the OMFIF’s fourth annual “Global Public Investor” survey, which will be released June 14, worldwide pension fund assets increased $435 billion in 2016, while sovereign funds rose $143 billion, and central banks declined $103 billion.

The OMFIF classifies global public investors as institutions such as pubic pension funds, central banks, and sovereign funds which are linked by their status as public sector-funded entities, and represent a major part of world capital markets.

The report broke down the global assets geographically, and found that the Asia Pacific region remains the largest by assets under management, with $12.7 trillion, or 37.9% of all global assets. Asia had four of the 10 largest public investment institutions: the People’s Bank of China, the Bank of Japan/Ministry of Finance, Japan’s Government Pension Investment Fund, and the China Investment Corporation. North America is the second-largest, with $8.1 trillion, or 24%, while Europe is third with $6.4 trillion.

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Europe’s increase in total assets was led mainly by central banks, with European assets under management rising $197 billion to $6.4 trillion. The Swiss National Bank, ranked seventh in the list, accounted for a rise of $76 billion, which the report said was due to intervention to hold down the Swiss franc, and strong returns on equities, making up one-fifth of Swiss reserves.

Total official gold holdings, which was at its highest level since 1999, increased by 377 tons, which was led by the central banks of Russia, China, and Kazakhstan. Turkey, Venezuela, and Azerbaijan saw the biggest decline in gold assets.

The report also said that there was a rise in assets related to what it called the “green economy,” although they still represent only a small portion of total assets. According to the survey, 38% of respondents said they will increase green bond investments over the next 12-24 months, while 35% said they will invest in renewables.

“Investments in green equity, fixed income, and alternative vehicles represent one way for public investors to achieve adequate returns while meeting low-carbon requirements,” said OMFIF in a statement. “Yet green finance remains beset by challenges, including over bond issue standardization.

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Home > News > Market Moves > Aldi, Lidl Pen First Chapter in Grocery Wars Saga
Market Moves

Aldi, Lidl Pen First Chapter in Grocery Wars Saga

The two European grocery chains will expand into the US this summer, but archrival Wal-Mart is already implementing a contingency plan.

By Chris Butera

Long range investors take note: contrary to the current state of US retail, German grocery chains Aldi and rival Lidl will be adding more than 4,000 stores in the US over the next five years.

Aldi said on Sunday that it will be investing $3.4 billion into the expansion, bringing its US locations up 56.5% from 1,600 to 2,500 by 2022. Of that $3.4 billion, $1.6 billion will go towards remodeling 1,300 existing stores. This will create a total of 25,000 US jobs, putting the company in the number three slot for US grocers. Aldi also plans to add in-house brands and price product at 21% lower than competitors.

For Lidl, the expansion will be the company’s maiden voyage into the US market.  It plans to open the first 10 US stores on Thursday across the Carolinas and Virginia, with an additional 10 openings planned for summer in the same region, creating an estimated 4,000-plus jobs. By 2018, Lidl plans to open 100 stores across the US, stirring up competition with US grocers by pricing products up to 50% lower than its competitors. The company says 90% of its in-store products will be private-label brands that are free of synthetic colors, trans fats, and added MSG. Lidl will continue its American expansion on a regular basis, with analysts expecting between 600 and 2,000 US stores over the next five years. Forbes expects Lidl to match Aldi with 2,000 US stores in 2020.

 

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Speaking of competition, Wal-Mart — the largest fish in the retail pond — is already firing back in the grocery war, spending $6 billion and testing lower prices in 11 US states. By doing so, it is essentially creating a ripple effect that strong-arms its vendors to undercut its opponents by 15%.

Lidl plans to open stores in the following locations this summer:

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