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Banks, Lenders & Investors

Is it time to rein in the Rentiers?

Businesses have now faced more than two years of uncertainty thanks to the constantly-changing environment caused by the Covid 19 Pandemic.

It is estimated by Begbies Traynor in its latest Red Flag analysis that in the third quarter of 2021 562,550 businesses were in “significant financial distress”, with a 17% rise in “more serious critical business distress”.

What businesses need, therefore, is some measure of calm and steady progress as far as any business can ever rely on these things.

Investors are among the most important in providing these conditions.

But for years now, many investors have been what are called “rentiers”, interested only in short term gains from the money they put into a business without being particularly invested in the future of that company.

Rentiers are deemed to be willing to shift their money elsewhere if they feel their rewards are not large enough or fast enough.

While no business would deny that it has obligations to deliver results for customers, shareholders and other investors, it is reasonable in these uncertain conditions to ask that investors show some patience and understanding.

The Government, as reported by CityAm, has invested in this idea by creating “British Patient Capital (BPC)” to which has committed more than £1bn of commitments itself.  This has so far attracted further £4.8bn of investment from third parties.

Ultimately, supporting a business and paying attention to its longer-term survival can only benefit investors looking for some security and stability on their returns.

It is a philosophy upon which K2 Business Partners is founded and acts whenever it gets involved in supporting any business in difficulty.

Of course, our involvement depends on a thorough analysis of the state of the business, but you can be sure that once committed K2 is with you for the long haul.