The value of the total assets under management for the world’s 100 largest asset owners declined nine per cent to US$23.4 trillion as of Dec. 31, 2022, according to a new report by WTW’s Thinking Ahead Institute.

Among these asset owners, pension funds retained 53 per cent of AUM, down from 60 per cent five years ago, while sovereign wealth funds’ AUM increased to 39 per cent, up from 32 per cent, and outsourced chief investment officers and master trusts were responsible for the remaining eight per cent, up 1.4 per cent.

Read: World’s 500 largest asset managers’ AUM down 13.7% in 2022: report

Japan’s Government Pension Investment Fund retained its position as the world’s largest asset owner ($1.4 trillion), followed by South Korea’s National Pension Service ($706 billion) and the U.S.-based Federal Retirement Thrift Investment Board ($690 billion). In terms of Canadian asset owners, the Caisse de dépôt et placement du Québec was ninth on the list with $290 billion.

“Asset owners from sovereign wealth funds to pension funds have navigated a year when volatility and uncertainty in the global economy have been at their highest in a generation — with often divergent outcomes,” said Jessica Gao, director at the Thinking Ahead Institute, in a press release.

“The disruption caused by elevated inflation and increased interest rates has affected equity and bond markets on a global scale, putting extra pressure on asset owners to reassess and adjust their strategies. The shift from an era of low inflation and interest rates has given a rise to a new macroeconomic landscape that demands a fresh understanding and management approach. This is impacting different types of asset owner in different and unexpected ways.”

Read: Canada has third largest share of global pension wealth for the first time: report