Key Takeaways
- • Global pension assets reached USD 68.3 trillion in 2025, representing a 9.6% year-on-year increase driven by strong market recovery and defined contribution (DC) growth adding USD 6 trillion in value.
- • Approximately 74% of pension plans are currently invested in private market assets, with allocations to private credit and infrastructure expected to continue rising as lifecycle designs retain equity exposure.
- • Defined contribution assets now represent 63% of holdings among the top seven global pension markets (Australia, Canada, Japan, the Netherlands, Switzerland, UK, and US), with Australia (90%) and the US (72%) leading DC penetration.
- • The US dominates global pension markets at 66% of the top 22 markets (P22), while Canada overtook Japan for the second-largest position following 12% year-on-year growth; the UK's share contracted to fourth place after growing just 1.4% annually over the past decade.
- • Regulatory changes, particularly in France, are accelerating pension fund allocations to private assets and emerging market equities, signaling a structural shift toward alternative investments across major jurisdictions.
Summary
Global pension schemes are positioned to substantially increase their allocations to private market assets and Asian emerging markets, according to recent analysis from the Thinking Ahead Institute and Create-Research/Amundi research. This shift reflects both cyclical market strength and structural changes in how pension funds are managing risk and return objectives in an evolving regulatory environment.
Global pension assets reached record levels in 2025, totaling USD 68.3 trillion—a 9.6% year-on-year increase that added approximately USD 6 trillion in value. This growth was underpinned by sustained recovery across global markets, sustained investor sentiment, and relatively contained volatility throughout the year. The Thinking Ahead Institute's Global Pension Assets Study, which tracks the 22 largest pension markets (P22), attributes much of this expansion to defined contribution assets, which have grown at an average rate of 9.4% annually over the past decade. Among the top seven global pension markets, DC assets now comprise 63% of total holdings, with Australia and the US showing particularly high DC penetration at 90% and 72% respectively.
The geographic distribution of global pension assets is undergoing notable realignment. The United States remains the dominant market, accounting for 66% of P22 assets in 2025, but Canada has overtaken Japan for the second-largest position following 12% year-on-year growth. In contrast, the UK—which held the second-largest position in 2015—has slipped to fourth place, growing at only 1.4% annually in USD terms over the past decade. The Thinking Ahead Institute attributes this relative decline to structural shifts within UK pension markets, as defined benefit schemes mature, pay out benefits, and execute de-risking strategies. However, UK defined contribution pensions continue expanding, growing from 18% of pension assets in 2020 to approximately 40% by 2025.
Private asset allocations are the primary driver of future pension fund strategy. Current data shows that 74% of pension plans maintain exposure to private market assets, with nearly two-thirds (62%) allocated to alternative asset managers. Allocations to private credit and infrastructure are rising notably, supported by lifecycle investment designs that retain equity exposure while generating yield. This trend is expected to accelerate throughout 2026. Regulatory changes, particularly in France, have encouraged asset owners to increase capital deployment into private asset funds, demonstrating how policy frameworks are actively facilitating the shift toward alternatives. Simultaneously, pension funds are expected to increase exposure to Asian emerging markets, reflecting both growth prospects and geographic diversification imperatives.
This reallocation of pension capital toward private markets and emerging geographies represents a material shift in institutional capital flows with significant implications for alternative asset managers, private credit platforms, and emerging market investment vehicles. The combination of record asset levels, structural growth in DC schemes, and deliberate allocation tilts toward alternatives suggests sustained demand for private market solutions across the institutional pension landscape through 2026 and beyond.
Global pension assets reached record levels in 2025, totaling USD 68.3 trillion—a 9.6% year-on-year increase that added approximately USD 6 trillion in value. This growth was underpinned by sustained recovery across global markets, sustained investor sentiment, and relatively contained volatility throughout the year. The Thinking Ahead Institute's Global Pension Assets Study, which tracks the 22 largest pension markets (P22), attributes much of this expansion to defined contribution assets, which have grown at an average rate of 9.4% annually over the past decade. Among the top seven global pension markets, DC assets now comprise 63% of total holdings, with Australia and the US showing particularly high DC penetration at 90% and 72% respectively.
The geographic distribution of global pension assets is undergoing notable realignment. The United States remains the dominant market, accounting for 66% of P22 assets in 2025, but Canada has overtaken Japan for the second-largest position following 12% year-on-year growth. In contrast, the UK—which held the second-largest position in 2015—has slipped to fourth place, growing at only 1.4% annually in USD terms over the past decade. The Thinking Ahead Institute attributes this relative decline to structural shifts within UK pension markets, as defined benefit schemes mature, pay out benefits, and execute de-risking strategies. However, UK defined contribution pensions continue expanding, growing from 18% of pension assets in 2020 to approximately 40% by 2025.
Private asset allocations are the primary driver of future pension fund strategy. Current data shows that 74% of pension plans maintain exposure to private market assets, with nearly two-thirds (62%) allocated to alternative asset managers. Allocations to private credit and infrastructure are rising notably, supported by lifecycle investment designs that retain equity exposure while generating yield. This trend is expected to accelerate throughout 2026. Regulatory changes, particularly in France, have encouraged asset owners to increase capital deployment into private asset funds, demonstrating how policy frameworks are actively facilitating the shift toward alternatives. Simultaneously, pension funds are expected to increase exposure to Asian emerging markets, reflecting both growth prospects and geographic diversification imperatives.
This reallocation of pension capital toward private markets and emerging geographies represents a material shift in institutional capital flows with significant implications for alternative asset managers, private credit platforms, and emerging market investment vehicles. The combination of record asset levels, structural growth in DC schemes, and deliberate allocation tilts toward alternatives suggests sustained demand for private market solutions across the institutional pension landscape through 2026 and beyond.
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