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The only assets that increase instead of decline in value (like currencies) are energy generating assets with the "Energy as ROI' model. Pension funds therefore will really like renewable energy investments, as this give them hedge (counter weight) against most of their assets. Pension funds will focus their whole new investment wave on the 'Energy as ROI' model. They have already to much assets will be that gives them a ROI, but not deliver a hedge against inflation (currency decline). They need to balance this. The current asset crisis emphases this very clear. Assets in currencies are declining assets by the massive non energy bound Quantitative Easing to fix bad bank/state debts that's currently going on in each year more volume. Pension funds will stop to buy treasuries (governmental bonds). They will not be able to sell them, as they only can be sold with a huge discount. They will use banks to make their treasuries liquid again, as banks can get one 100% cash for treasuries by the Central Banks. These liquidities they will invest in 'Energy as ROI' models as these assets grow instead of decline and by this can counter weight both the loses they will face on treasuries and other investments as the value decline of any currency as ROI based asset. It often said: Bank Crises delivers Sovereign Debt Crises delivers Pension Fund Crisis. By energy investments based on the 'Energy as ROI' model the pension funds can free themselves out of this asset down watering spiral. Pension funds are really 'hurt' by the market situations of the last years. PeakCredit/PeakCapital has given them severe asset damage. This undermines their function legitimization severe. They must take action otherwise the will be replace by any Direct Model, as Direct Models emerge enormously in the capital market. Capital democracy (people deciding their own investment portfolio) will become the default state of pension funds. They see this and adjust to it (by facilitating their customers with it) of they will lose their customers by this direct model demand that is unstoppable emerging in the market. The operational model of pension funds thereby will change a lot the next years. Pension funds will use the current quantitative easing focused on treasuries of the Central Banks to turn their treasuries into cash and use this cash for energy investments. Energy as Pension is a concept capable of generating a massive energy transition investment wave.

Author: Gijs Graafland

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