The assets of sovereign wealth funds (SWFs) and public pension funds are projected to rise to US$22.4 trillion and US$36.3 trillion, respectively, over the next five years, according to new research by PwC, launched today.

According to estimates, SWF assets are expected to grow at a compound annual growth rate (CAGR) of 8%, with public pension funds growing at 6%.

Based on a comparative analysis of the world’s 350 largest public investors, the report finds that sector growth is being supported by strong investment in AI and infrastructure projects, with these actors increasingly evolving from passive allocators of capital into principal investors that originate deals, build platforms and operate assets.

Currently, the 200 largest sovereign wealth and public pension funds together manage roughly US$34 trillion in assets—approximately US$15.5 trillion in SWFs and US$18.5 trillion in public pensions.

Growth in the sector comes as separate PwC analysis finds that an estimated $151 trillion in investment is needed through 2050 to modernise digital infrastructure, clean energy systems, and resilience transport.

“Sovereign wealth funds and public pension funds used to be thought of as passive allocators. But as heavy investment in AI infrastructure transforms the economy, behaviour at the largest funds has shifted. These investors no longer depend solely on external managers – instead, they are originating transactions themselves and taking controlling positions with operational roles. As the largest institutions set the tone for the megatrends shaping the global economy, players that take an active role in the defining theme of our time will emerge winners.”

AI and infrastructure investments in the US are shaping the investment outlook
According to global SWF figures, roughly $66 billion of state investor capital flowed into AI and digitisation in 2025 alone. From this, the US was the dominant destination for this global capital.

Across the roughly 2,723 disclosed transactions analysed in our sample, North America accounts for about 42% of activity, and Europe and Asia-Pacific are the next-largest destinations.

The largest institutions in the sector are also increasingly setting the tone for the sector at-large. According to PwC analysis, the top ten funds hold roughly 41% of the combined sovereign and pension pool, the top 25 hold 61%, and the top 50 hold 77%.

The shift from allocator to principal
The shift from allocator to principal is visible in three forms of greater agency:

Owning and operating: Funds are gaining more control by investing directly, taking companies private, and building in-house capabilities, behaving less like limited partners and more like principals in their own right.

Building platforms with partners: Rather than buying a single asset, funds are increasingly assembling repeatable vehicles that combine their balance sheet scale with a partner’s sector expertise.

Creating new capacity: At the most active end of the spectrum, the largest sovereign funds create companies, ecosystems, and infrastructure where there are no mature assets to buy.
As these actors become increasingly active as principals in shaping their investment strategies, three key questions emerge:

How much risk is concentrated in a diversified portfolio? Many funds are pursuing similar investment platforms and themes—converging in particular on investments in AI, data centres, and power.

Can execution keep pace with ambition? As funds acquire controlling stakes, they inherit operating responsibilities that a limited partner doesn’t usually bear.

How can energy and climate objectives work together? The need to expand data centre capacity is increasing the demand for reliable, round-the-clock electricity, even as funds pursue climate goals.

“The world’s largest sovereign and pension investors are no longer simply financing the global economy. They’re increasingly shaping it, deciding which industries to build, which technologies to scale and where capital flows. PwC’s Principal Investors Practice brings together our expertise and relationships to support these ambitions, connecting investment strategy with execution, institutional capabilities and long-term value creation.”

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