73. End of the crisis. What now?

Dear Gerard

The financial world is seen as the major cause of the greatest crisis since 1920-1930. It would take too long to give an analysis here. To blame only the banks is going too far. Politicians find it easy to do, as it is easier than blaming themselves. One of my favourite sayings is “When you point one finger, there are three fingers pointing back to you”. Indeed, the entire capitalist system, which seemed the best of all systems, has contributed to the crisis. Governments encouraged private consumption by making borrowing fiscally attractive and governments privatized one company after another to collect easy money. Of course, banks lent money too easily, but who set up the rules to make this possible? And where were the supervisors to monitor this lending policy adequately?
Most people think that the banks should pay the price. But what does this lead to? EMIR, FATCA, AIMD, Basel III – excessive regulation is overwhelming the sector. The idea behind these regulations is understandable, but the ultimate result is a disaster for the people working in the sector. The result is that small financial organizations are unable to exist, and they are either taken over by other companies or have to stop their activities. New initiatives are killed before they even start. The large institutions will become bigger and smaller companies will have no chance. In my opinion, this will have dire consequences, an environment must be created in which new initiatives are possible. Competition must exist so that the stronger companies, be they large or small, can survive. Bureaucracy is not a solution to the crisis.

In recent years, because of the crisis, it is almost impossible to attract money to investment funds, as everybody is looking to limit risks. As you know, we invest in the European market for high wealth individuals and family offices. We have been investing in listed companies in Turkey for more than 10 years and decided last year to set up a specialized fund in this area. Despite many risks, we see enormous possibilities for Turkey in the region and beyond: there is a growing population of hard-working people who want to have similar levels of welfare provision as in the west. The situation in Iraq and Iran is also developing positively. In March 2013, we launched a new fund, but three major adverse events in June, August and December 2013 resulted in a significant negative performance. However, the situation began to normalize in 2014. We believe that in Turkey, economic developments will be very positive. The value of our fund has almost returned to its old level. Of particular importance is that the process of democratization is going in the right direction. In Istanbul, there are more than three times more students than in Berlin and the city will soon have the largest airport in the world. A new city is being built to replace older housing, where one million people will live close to Istanbul. In addition, a number of European companies have production facilities in Turkey. The country is in the centre of the Middle East and is strategically important to the U.S. and ultimately Europe and Turkey will need each other. We are well-placed to benefit from this and are positive about the steps we took in 2013.

Regards,
Jan Stam