The total assets of the world’s largest 300 pension funds grew by over 14% in 2007 to around US$12 trillion, according to a survey.

Research by Watson Wyatt, in conjunction with Pensions & Investments newspaper, suggests that asset growth occurred in most major countries and the size of the pool of assets has more than doubled over the past five years.

“The world’s largest pension funds continue to benefit from a high profile as global demographic challenges remain front of mind,” says Carl Hess, global head of investment consulting with Watson Wyatt. “As a result, many large pension funds have prioritized their funding arrangements, helping them to grow despite adverse market conditions in the latter part of last year.”

According to the survey, the U.S. retains the largest market share of pension fund assets at 43%, down from 54% in 2002. Japan has the second-largest market share at 14%, with the U.K., the Netherlands and Canada tied for third place at 6%.

North American and European funds have exhibited stable growth over the past five years with compound annual growth rates of 13% and 21%, respectively, while Asia-Pacific funds posted growth for the first time in three years, averaging 21% since 2002. Australian funds have shown groth of 27%, the fastest growth rate over a five-year period—while Canadian, Swedish and Dutch funds grew at 22%, 19% and 18% respectively.

For only the second time in five years, the top 20 funds grew at a slower rate than the remaining funds. These top 20 funds amount to US$4.4 trillion and comprise over 15% of global pension assets, with each fund holding more than US$100 billion. Sovereign funds are prevalent in the ranking, posting growth of 24% since 2002 and representing 23% of assets for a total of US$2.8 trillion—up US$4 billion from 2006.

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