Large pension funds do not invest more effectively than smaller pension funds (OpenAlex (recherche mondiale))

Summary

• At year-end 2023, OECD countries held $63.1 trillion of assets earmarked for retirement, almost equal to their annual GDP.p.1
• The number of active reporting pension funds in the Netherlands dropped sharply from 452 in 2007 to 164 in 2025Q1.p.7
• Total investments held by the sample of Dutch pension funds reached €1,581 billion at the end of 2025Q1.p.7
• Over 2012–25Q1, private equity achieved the highest average net investment return at 2.74 per cent per quarter.p.7

Key insights

1. Economies of scale in total net investment returns are absent across Dutch pension fund size classes.p.3
2. Large pension funds achieve higher returns on private equity, public equity, and real estate than smaller pension funds.p.3
3. The lower fixed income returns of large pension funds offset their higher equity and alternative asset returns, resulting in similar overall net returns across fund sizes.p.1
4. External investment advice compensated via performance fees does not add statistically significant extra value to total net investment returns.p.3
5. Smaller pension funds generate higher returns from public equity than from private equity over the 2012–25Q1 period.p.11
6. Liability interest rate risk hedging among Dutch pension funds increased from a simple average of 47 per cent in 2015Q1 to 78 per cent in 2025Q1.p.15