What are the new power groupings in global investment?
Institutional investment is becoming increasingly polarised, with pension funds now dominating in North America while sovereign wealth funds are becoming more prominent in Europe and the Middle East. Armed with considerable resources, these investors are diving into private markets globally, including financing the energy transition.
Investment power has increasingly consolidated into several regional groupings in recent years, including seven of the largest US state and federal pension funds and the Maple 8 public pension funds in Canada.
This is the striking assessment of the Thinking Ahead Institute's recent Asset Owner 100 report, which tracked the growth of the world's largest institutional investors throughout 2025.
It found that pension funds continue to dominate in North America, while sovereign wealth funds are now more prominent in Europe, the Middle East and Africa. In the Asia-Pacific region, there is an even split between pension investors and sovereign funds.
The Thinking Ahead Institute also found that, for the first time, Norges Bank Investment Management, the manager behind Norway's $1.7tn (£1.3tn) sovereign wealth fund, had edged out Japan's $1.6tn Government Pension Investment Fund to become the world's largest asset owner.
Together, the biggest 100 investors tracked by the non-profit research institute held $29.3tn in assets, up more than 11 per cent on a year ago.
“[The Maple 8] are incredibly well-staged, resourceful, [and] they spend a lot of time thinking about strategic partnerships”
The seven largest US funds, including the $542bn CalPERs and the $385.8bn California State Teachers' Retirement System, held a combined $2.8tn in assets.
In the Middle East, by contrast, the Gulf 5, which includes the $475bn Qatar Investment Authority and the $829bn Abu Dhabi Investment Authority, managed $3.9tn in assets collectively.
Leveraging investment power in private markets
The largest eight Canadian funds, including the C$777.5bn (£422bn) Canada Pension Plan Investment Board and the C$496bn Caisse de dépôt et placement du Québec (La Caisse), together wielded £1.7tn in assets.
Marisa Hall, head of the Thinking Ahead Institute, tells MandateWire Analysis the Canadian funds have spent a considerable amount of time working out how to function as large-scale, longer-term investors, allowing these funds to internalise their allocation processes around private markets.
"These funds are incredibly well-staged, resourceful, [and] they spend a lot of time thinking about strategic partnerships. They very much have a system to manage their private market [assets], either through co-investments or resourcing up on staff," Hall says.
Through a tilt towards long-term strategies and expertise in the management of private assets, the Canadian funds have been able to function as long-term investors.
Hall likens this to the success of investors like Warren Buffett, famous for achieving compound returns over decades.
"It's that often-quoted Warren Buffett saying — that somebody was sitting in the shade today because somebody a generation ago planted a tree," Hall says.
A long-term approach has allowed the Maple 8 to confidently deploy assets at scale and tap into new private asset allocations globally. In November, MandateWire reported that the Canada Pension Plan Investment Board had ploughed more than $150mn into a joint venture project in India, investing in a portfolio of industrial and other logistic assets.
In the same month, we reported that La Caisse had taken on an investment in a US power grid and a UK offshore wind project, leveraging its large size to make infrastructure commitments abroad.
Announcing the investment, Martin Longchamps, head of private equity and private credit at La Caisse, called his fund a "global investor with significant exposure to the power and energy sector".
The rapid growth of sovereign wealth
Sovereign wealth investors saw the biggest growth in their assets under management last year, with a 16.7 per cent increase in 2025. By contrast, the world's largest pension funds saw more muted growth levels globally, at an average rate of 6.5 per cent on their 2024 assets.
As a result of their large growth in recent years, sovereign investors now account for almost three-quarters (73 per cent) of assets in Europe, the Middle East and Africa, the report found.
But pension funds still dominated the overall share, managing nearly half (49 per cent) of total assets globally, while sovereign investors held around two-fifths (40.8 per cent). There were 63 pension funds and 22 sovereign wealth funds included in the top 100 list.
Amin Rajan, chief executive of Create-Research, tells MandateWire Analysis the rise of sovereign wealth funds "owes a lot to the economic success of their sponsoring nations".
But at the same time, Rajan adds, these investors tend to be "highly regulated and cautious in their investment approaches, as [demonstrated] by NBIM".
For this reason, asset managers have directed their innovation efforts at "plans, endowments and foundations, who have been more open to new ideas and strategies", he says.
Sovereign wealth funds finance the energy transition
Owing to their size and ability to take a long-term perspective, Middle Eastern sovereign wealth funds have been active in bidding for private asset opportunities around the world, including financing significant energy transition and infrastructure projects.
In September last year, MandateWire reported that the Qatar Investment Authority purchased a 4 per cent stake in the Canadian mining company Ivanhoe Mines for $500mn, which operates three large mining projects in central Africa.
Mohammed Saif Al-Sowaidi, chief executive of the sovereign fund, said the move allowed QIA to contribute to the development and supply chain of critical minerals, which he said were "essential to the global energy transition" and crucial in the development of advanced technologies.
Also that month, MandateWire wrote that the Abu Dhabi Investment Authority had invested $1.6bn alongside Singapore's GIC in Vantage Data Centers, focused on digital infrastructure in the Asia-Pacific region.
Khadem AlRemeithi, executive director of the infrastructure department at ADIA, said the investment "aligns with our strategy of investing in infrastructure that enables digitalisation".
In Europe, the continued growth of the Norwegian oil fund has seen the fund make mammoth commitments in the global green infrastructure space in recent months, including a €4.5bn (£3.9bn) investment in TenneT, a German grid operator, and a $1.5bn commitment to an infrastructure fund run by Brookfield Asset Management.
Harald von Heyden, NBIM's global head of renewable infrastructure, told MandateWire Analysis exclusively in October that it would seek to allocate a further €2.6bn to renewable infrastructure funds, with its large size providing it with a "competitive advantage" in the biggest global deals in renewable energy infrastructure.
But other types of asset owners may have constraints hindering their investments in illiquid long-term assets, including the need to generate constant disbursements to pay out pensions to end-savers, charitable grants or insurance claims.
"[Many asset owners] tend to be more focused on liquid strategies and do not go after illiquidity premia," Rajan adds. "Stellar returns are not on their radar. They come with stellar risks."