Retirement plan assets in Asia outsourced to external managers grew 13.4% to $1.7 trillion in 2021, outpacing an 11.1% increase in total investible assets to $4.6 trillion, according to a Cerulli Associates report.
The Cerulli report on Asian retirement markets, published Wednesday, said the latest figures show opportunities for money managers in Asia ex-Japan retirement markets continuing to grow, with the outsourced portion of the region's expanding pool of public and private retirement fund assets rising to 36.8% by the end of last year from 30.6% five years earlier.
The report noted that public pension funds in the region, in an effort to improve retirement security for members, continued to boost allocations to alternatives, foreign assets and environmental, social and governance-focused mandates.
Shannen Wong, a Singapore-based senior analyst with Cerulli, said in an email that allocations to foreign assets jumped 22.3% to $746.1 billion last year.
Alternatives, meanwhile, surged 28.5% from a lower base to $250.2 billion, raising their share of total investible assets to 8.4% from 7.2% the year before, she said.
Cerulli couldn't provide a hard estimate for ESG-focused retirement assets, but Ms. Wong said a growing list of big public pension funds in the region see ESG-related allocations as consistent with their fiduciary duties, including Japan's Government Pension Investment Fund, China's National Social Security Fund, Malaysia's Employees Provident Fund, Hong Kong's Mandatory Provident Fund, Taiwan's Bureau of Labor Funds and Public Service Pension Fund, Thailand's Government Pension Fund and Indonesia's BPJS Ketenagakerjaan.
Through the end of 2021, retirement funds in the region continued to increase their exposures to risk assets, including equities, "at the expense of bonds and cash allocations," the report said.