This Christmas, as I reflect on 2011, I feel all our clients have been faced with a challenging and uncertain economy. There is no doubt that trading has been tough for all and this is set to continue into 2012.
There have been some national high spots over the last twelve months which have brought an economic impetus. With the country enjoying a royal wedding or two, we are now looking forward to the Olympics next year. We have seen a positive effect locally in Kent with the opening of the New Marlowe Theatre in Canterbury and the Turner Contemporary Gallery in Margate – both projects that are close to this firm’s heart.
Our national and local rejoicing has not however been sufficient to drown out all the negative economic news we have endured over the last twelve months. Each night on our television screens, Robert Peston has been preaching doom and gloom at the BBC. In addition, and despite their reported willingness to lend, many businesses continue to tell of how they are let down by their bankers. All this leads to a feeling of uncertainty as to the future of the economy. When one adds to that what is happening in Europe, it is no wonder that many businesses are not investing in new projects, even though a number of the company balance sheets that I see look strong, with significant cash balances.
Will the Euro survive? Will banks be able to support business if it doesn’t? Are the investment returns we all need to see to build our pension funds going to be sufficient to fund our retirements? Until we can see clear answers for these questions, it is going to be difficult to find investment for the next generation of new businesses.
If ever there was a time for entrepreneurs and good business leaders to come forward and be counted, then 2012 is that time. If the UK is to stay out of recession we need to start to invest risk capital in our businesses to ensure they can grow and support future employment. I see a lot of good projects that are worthy of investment but fail for lack of risk capital. This cannot come from banks, who should not be expected to be entrepreneurs themselves, but from individuals who see the likelihood of an above average return for taking an above average financial risk.
At a time of year when many businesses are reviewing their business plans and strategies for the year ahead, why not consider investment in such a fledgling business? You never know – it just might pay off. With another hat on, as Chairman of our international network, Kreston International, I see many overseas investors happy to invest in UK business in a way that we in the UK are not doing. For example China, India and Indonesia are now net outward investors looking for opportunities outside their own borders. They may well own our future if we do not invest in UK businesses ourselves.
Happy Christmas to all of you – and if you are interested in being an investor please let me know. I would be happy to introduce you to businesses looking for investment!
Clive Stevens
Managing Partner
22 December 2011
