From private assets to infrastructure: Pension superpowers reshaping the world economy

Working notably with the OECD and the World Bank [¹], the co-authors of this article were among the first to predict that once peripheral asset classes like private equity and infrastructure would “move centre stage” and become part of the normal pension asset allocation mainstay in most countries – as opposed to the exclusive object of a handful of sophisticated institutions like the Yale University endowment in the US or the Caisse de Dépôt et Placement du Québec, the French Canadian public pension giant doubling up as provincial sovereign fund and development bank.

For regulatory and political reasons (procyclical and poorly designed Basel, Solvency “adequacy ratios” favouring government bonds and listed equity large-caps) as well as the initial scepticism of some pension board members (trustees) and the general lack of available products (most global asset managers were uninterested at the time), that slow meta-trend took nearly 15 years to come to fruition: from the inaugural World Pensions–OECD Infrastructure Roundtable (December 2010) to the first Mansion House Accord where leading UK pension providers committed to raise substantially their existing allocation to private market assets (May 2015).

Running as it were along parallel tracks, another profound trend started at the beginning of the last decade: building on Edward Luttwak’s earlier work, we called it the Age of Geoeconomics [²]. In essence, it means the post-Cold War Age of Globalisation (Reagan, Thatcher, etc.) is now over. China and America, the only remaining real superpowers, are now both tearing down the old barriers separating commerce, international law and investment from national security and military matters (dual-use technologies). As a consequence, finance, industry, energy and mining are fast becoming “instruments of power” (weaponisation) in the hands of US and Chinese policy makers.

Here, the political and economic maturation process was a little faster: from chair Xi Jinping’s announcement of the development of China’s “Belt and Road Initiative” complete with giant transport and energy corridors connecting East Asia to Western Europe (September 2013), to President Trump’s seemingly abrupt Liberation Day tariffs (April 2025) and ensuing trade wars, with Europe and Canada on the receiving end of America’s newfound economic nationalist ardour.

We coined the term “pension superpowers” to designate countries that have amassed unprecedented, massive pools of retirement capital over the past two decades relative to their economy’s size: measured by the pension AuM to GDP ratio, which stands at roughly 200% for Canada (mostly public pensions), 150% for Australia (both public and private sector superannuation funds), 80% for the UK … and a pale 10% for supposedly “rich” industrialised EU champions France and Germany. Together, the US, Canada, Australia, the UK, the Netherlands, Japan and Scandinavia now hold over 75% of all global pension assets: “the new wealth of nations”. These assets can potentially give them extraordinary geoeconomic leverage on the global stage, but, so far, until time, governments have shied away from flexing the pent-up power of their pension systems … but things are changing.

Perhaps not coincidentally, right after his surprise election victory (May 2025), prime minister Mark Carney, a former central bank governor in both Ottawa and London, selected Marc-André Blanchard, of pension fund La Caisse de Dépôt du Québec as his chief of staff and Mark Wiseman, former chief executive officer of the Canada Pension Plan Investment Board (CPPIB) and former head of private investments at Ontario Teachers’ Pension Plan (OTPP), as Canadian ambassador to Washington, the two most important roles in the country’s government machinery.

For the first time in history, a major G7 economy is now led by former central bankers and pension executives! Also, from a geoeconomic perspective, Canada belongs to a distinct category combining pivot nation (Mackinder) and rich, technologically advanced middle-rank economy status, alongside Australia, South Korea, Switzerland and Israel.

Earlier last month (15 September 2026), prime minister Carney convened the first Canada Investment Summit, Ottawa’s response to Washington’s Trumponomics: “Canada is building big. Build with us. We unleashed nearly $500 billion of new investment into Canadian businesses and infrastructure – and this is just the beginning. The world sees our strengths and ambitions, and we will harness this moment to generate lasting growth, opportunity, and prosperity for Canadians. Canada is boldly unleashing our enormous potential, and we are just getting started.”

Many of these ambitious investment projects focus on artificial intelligence (AI), advanced robotics, small modular nuclear reactors and “fully permitted, shovel-ready critical minerals [mines that] will produce copper and palladium”, where Canadian pension giants will act as “core anchor investors” alongside US and Australian mining and energy giants and Arabian Gulf and Scandinavian sovereign wealth funds. A new economic era is beginning, and pension superpowers are reshaping the world as we know it.

M. Nicolas Firzli is head of research at the World Pensions council (WPc), and Nick Sherry is a former Australian pensions minister

_{[¹] Firzli, M. Nicolas J. (24 May 2016). “Pension Investment in infrastructure Debt: A New Source of Capital for Project Finance”. World Bank Group (WBG), Infrastructure and PPPs blog}

_{[²] Firzli, M. Nicolas “Pension Superpowers and Financial Markets in the Sino-American Century.” Private Debt Investor (2020)}