Billionaires Buy Bragging Rights With Giant Super Yachts
The $3 billion worth of vessels anchored for sale in the Monaco harbor draw a grin from Monte Carlo Luxury Yachts broker George Fortune.
“Super yachts are a particularly male-driven thing”, he says, surveying the principality annual super-yacht show.
“Somebody always has one bigger than yours”, the 55-year- old salesman explains from the bow of the $20 million jet- propelled Art Deco speedboat Musa. “This business is based on clients who care little about economic recessions and are passionate about proving that they have more money than you”.
There might be a load of statistics to prove the global economy is floundering on the shoals of catastrophe. Just don’t come spouting them aboard the 118-foot Musa, where all countertops are fossilized Carrera marble and the main salon is trimmed in snakeskin leather.
The only number that matters here is a top speed of 100 miles per hour, allowing thermo-billionaires to breakfast in Italy, lunch in Corsica and order supper in Monte Carlo.
“There’s no blood in this water”, Fortune says.
Jeff Flood, president of Balearic International Yachts in Palma, Majorca, says the super-yacht crowd begins calculating in multiples of $10 million.
“Big-buck shakers and movers want gigantic boats and are not afraid of what it will cost them”, Flood says. “But you’d better be selling something that’s less than five years old and with a fuel range of at least 3,000 miles”.
All of which should make the 7,800-horsepower Musa — with a range of 500 miles — a boat for the impoverished billionaire.
Low-Key Luxury
“Not really”, Fortune says. “Musa is low-key luxury for clients who actually have tankers waiting at predetermined locations at sea to pump fuel on board so they can continue traveling at top speed”.
Super-yacht owners keep their vessels for no more than three years before buying up, according to a Monte Carlo Luxury Yachts study. Mexican cell-phone billionaire Carlos Peralta wants something bigger.
Peralta, the former chairman of wireless-service provider Grupo Iusacell SA, has instructed Fraser Yachts in Fort Lauderdale, Florida, to strap his 257-foot Princess Mariana to Monaco’s biggest pier. Frasers asking $143 million for the vessel, down from $182 million a year ago, according to the yachts broker. It’s seeking someone who wants a starter boat to buy the six-deck yacht, which has a seven-passenger helicopter, indoor swimming pool and a range of 7,000 nautical miles.
Marianas teak deck is big enough to stage a motorcycle race that could be broadcast by the ships 17 security cameras.
“There are about 50 people in the world interested in Mariana”, says Fraser broker Rob Newton. “Folks who already have big boats sell them to buy even bigger boats because they come with more stuff”.
Chilled Mist
Aboard the Mariana, that stuff includes a 28-man crew, six cabins that hold 12 passengers, six jet skis, a 35-foot tender and a ship-wide outdoor sprinkling system that sprays guests with chilled mist. There’s a beauty shop, a massage parlor and a 13-seat movie theater. The master cabin comes with a waterfall and a beach club, an ersatz shore that electronically rolls out of the hull.
“The super yacht”, Fortune says, “is a city state”.
Pascal Wiscour-Conters job is to ensure it doesn’t sink. He’s the 42-year-old chief executive officer of Equisea Yacht Management, whose corporate motto is: “If you need a private banker, you need a private anchor”.
Worries Removed
Standing on Equisea’s balcony above Monaco’s harbor at last months show, observing his realm below through a pair of military binoculars, the former Dexia SA banker says his work takes the worry out of owning a super yacht.
“We manage the entire operation”, says Wiscour-Conter, whose services can cost more than $200,000 a year. Fuel, supplies, insurance, charter, crews, you name it. We are the public face and the owner stays in the background.
As for those owners, they are not coming ashore to talk and are taking extraordinary measures to remain out of sight. Consider the “anti-pap system”, a network of light guns that Russian billionaire Roman Abramovich installed on his 550-foot- long Eclipse, the world’s biggest private yacht.
“It’s designed to blind digital cameras with laser bursts”, Fortune explains. “The captain activates it whenever he’s at anchor near shore or sees an approaching ship that might have paparazzi on board”.
Expensive Indulgence
Despite the publicity of going to the sea in a really big ship, Flood says the super yacht remains the preferred way for someone to display their wealth. It’s an expensive indulgence that refreshes the cliche that you can’t afford the price if you have to ask how much it costs.
Flood says that Mariana’s annual berthing fee, for instance, orbits at around $200,000 and that the owner is looking at annually spending a minimum 10 percent of the boat’s initial cost on insurance, crew, fuel and upkeep that includes polishing Mariana’s miles of stainless-steel railings eight times each day.
“Since Lehman collapsed, 30 percent of my clients liquidated their yachts and plowed the money back into the stock market to buy something bigger”, Fortune says. “The other 70 percent wanted to sell, but couldn’t. That might sound contradictory to the bullishness of the market, but it isn’t: Not one of my clients has ever told me that they’re desperate to sell. The boat is all important to their lives and businesses”
Fortune calculates that demand for super yachts over the past year is down 30 percent, with prices dropping about 25 percent. One of the difficulties I face is selling any super yacht that doesn’t come with its own crew, he says.
As Fortune tells it, the recession has dried up the market of millionaires who once bought yachts to sail the globe in search of sun and fun. “Nowadays, it’s all about billionaires needing a secret place to conduct meetings and host events they can’t have on shore”, Flood says. “Dry land is crazy”.
For more information on the yacht market, see http://www.equisea.mc or http://www.fraseryachts.com.
Source: Bloomberg
Category: Brokerage News
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