As in 2021 and 2022, we have studied the performance of all major Sovereign Investors. By May, most organizations had already released results, although eight of the 50 funds featured below were yet to report them and we estimated their FY22 yield based on benchmarks. Whenever possible, returns are expressed in net, nominal terms.
As we always say, comparing returns across State-Owned Investors is not an easy task: besides having different fiscal years, funds report differently on nominal vs real terms, on net vs gross of expenses, on currencies, and on the kind of performance metric used, e.g., TSR, RoE, RoA, RoCE. But we believe this is an important annual exercise that sheds some light on some of the perceptions in the industry.
This year we decided to look at 10-year annualized returns as opposed to 6-year averages, given that 2022 losses had a huge toll on some funds and the difference reporting dates make. For example, leader NZ Super closes accounts on June 30, so the 12.1% does not reflect the large losses the fund had in Q2 CY22. And yet, even if the kiwi fund had closed on December 31, its 10-year return would have been 11.0% and it would have still led the table.
Separately, NZ Super Fund's CEO, Matt Whineray, announced today that he will be leaving his post at the end of the year after 15 years at the fund. From now until then, he will be working with the Board of Guardians to lead a number of programs of work that will double the fund's size in the next decade, and to assist them in the search for his replacement.
This is the ninth change in leadership of a Sovereign Investor in 2023 so far, after Ethiopia's EIH, UAE's GPSSA, Malta's MGI, Australia's CBUS, Sweden's Alecta, Israel's ICF, Senegal's FONSIS and Bahrain's Mumtalakat. Sadly, we continue to see a significant churn ratio at the top of SOIs.
