Institutional Investor's Alpha Magazine - October 2008 - (Page 32)

LUXURY MARKETS rare and exceptional stones and estate jewelry. “There’s always a great place for the jeweler, even through difﬁcult times,” Betteridge says. “People will still have birthdays; couples, anniversaries; Christmas will still have a tree. And people will want to remember.” At his Greenwich, Conn., store, sales were up 105 percent in January, compared with the same period last year. In early September, at the height of the Wall Street crisis, he still managed to sell an emerald and diamond necklace by Van Cleef & Arpels for $3 million. “Jewelry has lasting value and, more importantly, meaning,” Betteridge says. “Big mad money and smart big money are still around. We have made a $3 million-plus sale in the past couple of weeks, but it‘s the day-to-day business that has always sustained us these last 111 years.” Jewelry can be likened to real estate, Betteridge adds. “In Greenwich, for example, great properties still will sell well, because the area is so beautiful, the schools so ﬁne and the combination of pluses so rare. Similarly, rare and great jewelry will always be loved and sought after.” Sailing On Despite Economic Storm Clockwise from top: Platinum, ruby and diamond Cartier bracelet, London, circa 1938; coffee pot of a three-piece sterling siilver tea set by Ball, Black & Co., circa 1870; and sailing yacht Felicita West brokered by Camper & Nicholsons. The very wealthy are not just buying more jewelry and handbags. They’re buying boats, and they want them bigger and more sophisticated. Responding to this growing demand, both LVMH and Hermès are now expanding into the yacht business. Hermès has entered into a joint venture with Wally, the Monaco yacht maker that specializes in conceiving, building and selling high-end boats. LVMH has also purchased Royal van Lent, a 160-year-old maker of ultra high-end yachts, from Dutch investment company Egeria. Royal van Lent, based in the Netherlands, designs and builds megayachts, measuring more than 164 feet and selling for about $44 million each. Antonio Belloni, group managing director of LVMH, believes the exclusive mega-yacht sector is “a market with sustainable growth prospects.” According to research by yacht broker Camper & Nicholsons, about 3,800 yachts measuring more than 80 feet in length are in service around the world – and 1,800 of them have been built since 2000. The study predicts that by 2010, 5,000 such yachts will be on the water. “The boats over the last 15 years have become larger and larger,” says Sara Monteﬁore, general manager of Camper & Nicholsons. “The bigger the boat, the more it can ride out this economic storm.” Orders for $10 million nautical chateaus are up 18 percent in 2008, resulting in higher demand for captains, engineers and crew. “Over the years, it has become more difﬁcult to get qualiﬁed crew, but especially today as boats become more sophisticated,” says Monteﬁore. “Also, the regulations that have come into play with these yachts are very strict. We’re now following safety and security manuals for cruise ships, so there are ratings required even for day workers and deck hands.” Many of today’s yacht buyers began as frequent private yacht charterers. At least a third of charter clients, Monteﬁore says, tend to turn to yacht ownership after repeated charter experiences. 2 • Alpha Sponsored Report • October 2008

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - October 2008

Institutional Investor's Alpha Magazine - October 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Process of Evolution The Good Guys: Israel's Champion Interview: Fast Lessons for Hard Times Cover Story: Industry Under Siege The New Hedge Fund Economics Good-Bye, Easy Money Caging the Shorts Strategies: Bottom Fishing Profile: Cult of Personalities Research Center: Alpha Awards: Eye of the Storm Alpha Bytes: Funneling the Chatter Unhedged: Commentary: Attention, Hedge Fund Shoppers

Institutional Investor's Alpha Magazine - October 2008

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