Through the German pension reform being pushed by the government coalition led by former BlackRock official Friedrich Merz, large flows of money will be yearly guaranteed to Merz’s former employer, BlackRock.
It works like this: the reform will introduce the socalled “Generationenkapital,” which is a term created by the government to replace the unpopular “Aktienrente,” but it is the same thing. Part of the future pension check will come from money invested in capital markets. The initial capital will be borrowed by the government and poured into the existing German so-called “sovereign fund” KENFO, the fund created to manage the financial endowment for long-term nuclear waste storage sites.
KENFO, in turn will invest the money in exchange-traded funds (ETFs), and since BlackRock is the dominant player and the main supplier of ETFs globally, a giant slice of the management fees of this immense flow of money will fatten the balance sheet of Merz’s former company. KENFO will then dump earnings into the national pension fund.