The world’s 300 largest pension funds saw their assets under management (AUM) increase at the fastest rate since 2017 in 2025, the Thinking Ahead Institute (TAI) has revealed.

Its report, in conjunction with Pensions & Investments, showed that the pension funds’ AUM increased by 13.4 per cent last year to a record high USD 27.7trn.

The analysis found that growth was especially strong among the 20 largest pension funds, which increased their assets by 14.7 per cent to USD 11.9trn during the year.

Europe increased its share of AUM among the top 300 pension funds, up from 23.7 per cent to 24.6 per cent.

The report noted that Europe’s growth was driven by the Government Pension Fund Global in Norway, which surpassed the USD 2trn milestone for the first time.

The pension fund overtook the Government Pension Fund of Japan in 2024 as the world’s largest pension fund and is now 12.7 per cent bigger than its closest peer.

The UK and the Netherlands were the only markets to report negative asset growth over the past five years in both local currency and US dollar terms.

Although they both remain two of the largest pension markets in Europe, they have been affected by maturing pension systems with significant defined benefit scheme legacies.

The report said this reflected the wider transition among developed markets, where established pension systems are increasingly balancing growth with benefit payments, de-risking activity, and changing scheme structures.

Europe had three pension funds in the top 20 largest by AUM, including two in the Netherlands, while the UK had none.

Europe remained the region with the lowest proportion of defined contribution assets at 13.2 per cent, compared to 31.6 per cent in North America and 30.7 per cent in Asia-Pacific.

North America was the region with the greatest share of the largest pension funds’ assets, accounting for 44.7 per cent of the top 300, although this was down from 47.2 per cent in 2024.

Over the past five years, North America recorded the strongest annualised growth among the major regions, at 6.4 per cent.

Asia-Pacific saw its share of assets among the top 300 rise from 25.5 per cent to 26.6 per cent in 2025, with the region having the greatest portion of its assets invested in equities among major regions.

“Scale and consolidation are among the defining industry themes of the moment,” said TAI director, Jessica Gao.

“Not only are the largest funds getting larger, but organisations are also increasingly pursuing growth beyond traditional M&A through strategic partnerships, which provide access to additional expertise, technology, and specialised capabilities.

“This is giving rise to a new generation of investment ‘hyperscalers’. Borrowing the term from the technology sector, these are organisations that use their scale alongside their capabilities, relationships and governance to gain greater influence and deliver better outcomes.

“For pension funds, it is not just about getting bigger, but about making their scale work harder.

“AI will be an important part of this, but ambition is currently running ahead of readiness. Funds are clear on the potential of AI to improve investment decisions and make their organisations more effective, but many are still building the data, processes and infrastructure needed to put it to work.

“The opportunity is significant, but progress will depend on strengthening the data, workflows and organisational foundations required to scale AI effectively.”

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