Should anyone doubt that active management, once seperated from short term speculation, can bring investment returns, look no further than the German development bank KfW (Kreditanstalt für Wiederaufbau, ‘Reconstruction Credit Institute’) which recycles its own funds, makes bond issues to others, and now has assets of around €500 billion and annual loans in excess of €70 billion. This makes it the equivalent to a major international bank.
Remarkably these funds have been built up as a result of specific investments in long term environmentally sustainable business development, done indirectly via banks so that they in turn have the guarantees to support specific loans responding to the KfW agenda. That indirect structure was created after the 1939-45 war so as to also support the rebuilding of the banking sector. It is now a model that may support the creation of ‘sober’, sustainable everyday businesses the world over.
Updated from Future Business, Long Finance, 2014, MMG/SNJ