This publication recently interviewed one of the world's largest brokerage firms for "super-yachts" in the wake of recent office openings and business changes.

Many wealth managers and their clients are back at work. The suntans are already starting to fade but that doesn’t mean the playgrounds in which ultra-wealthy like to spend their money are slowing down. And one sector which can measure wealth trends on the spending side is that of super-yachts.

According to Boat International, a magazine tracking the market for these gleaming behemoths of the seas, 263 super-yachts (defined as any vessel of 24 metres/79 feet or longer) have been sold in 2016. The highest price paid for any vessel this year was €60 million; the largest yacht was 77 metres in length. In 2015, meanwhile, 392 super-yachts were sold, and the largest was a whopping 139 metres, and the priciest vessel was more than €200 million (around $225 million). And to cap all that, 719 super-yachts are being built as of the time of writing. There appears to be no end in sight.
    
This is a market that private bankers working with nautically-inclined clients need to be aware of; there are specialists in the field, such as Edmiston, Fraser Yachts, Northrop & Johnson, and Y.CO. Such firms not only put would-be owners and charterers in touch with vendors but they can advise on such grainy details as where best to register a vessel, for example (Caymans, Gibraltar, Malta, British Virgin Islands, etc.) They can explain such prosaic matters as value added tax, hiring suitable crews and dealing with HR issues that this can bring up. (There are lawyers and specialists in this space such as one profiled by this publication here.)

Ocean Independence
This publication recently spoke to Zurich-headquartered firm Ocean Independence, a specialist brokerage house operating worldwide and claiming to be one of the big three such brokerages worldwide. It recently created a US sales team and opened an office in Malta. It now has 16 offices.

“For the ultra wealthy, there has been a seismic shift from ‘what you own’ to ‘what you do’ over the last five years; life onboard a super-yacht allows clients to enjoy the best of these two worlds. The interest of owning, chartering or building a super-yacht is growing in line with the demand for the ultimate in experiential luxury,” Toby Maclaurin, commercial director at Ocean Independence, said.

The firm has been busy. In April it launched its new corporate identity; this is a “distinctive and bold new look”; it supports a “lifestyle-led focus” and there is a new twice-yearly magazine, Pursuit, and a series of events for the Ocean Independence network.

This month, Ocean Independence said it is unveiling a new brand experience at a round of yachting shows, starting with the Monaco Boat Show. A new mobile app for clients is in the works. And this firm is aiming for higher things, launching a private aviation division that is based out of Zurich. Since that was launched in April, it has completed a total of 20 charters.

Maclaurin said the business has kept its status as one of the top-three brokerage firms for the last five years and represents the largest crewed charter fleet in the world (it has a crew on tap of more than 300 people); last year, a turnover target increase of 10 per cent was achieved, the strongest result since 2008. This perhaps is a sign of full recovery since the year of the global financial tsunami.

Ocean Independence says it is distinct in several ways. Even its choice of HQ is a bit different from the norm. (Switzerland is landlocked, albeit with some big lakes.) It may not at first be the most obvious place to have a super-yacht brokerage HQ, but Zurich is a natural spot to be because of its being a residence to so many international bodies, luxury marques and wealth management connections dating back more than a century, the firm said when interviewed recently by this publication. It also happens to be the place where Ocean Independence’s managing partner, founded the business. Ocean Independence is the only such brokerage present in the country.

What has happened in the US?
“We opened the Fort Lauderdale-based US office in 2005 and later added a sales and purchase team in 2015. This enabled Ocean Independence to strengthen its position in the market for sale and purchase, working with local specialists, Thom Conboy and Chris Collins. Having an on-the-ground, US-led sales drive has resulted in a rush of 7 super-yacht sales in 2015 and a 50% increase in fleet for charter,” Maclaurin said.

As far as Malta goes, having the office made strategic sense because the Mediterranean island is a hub for “East meets West” and has become a popular wintering destination for these vessels, he continued.

Perhaps unsurprisingly given the shifting centre of economic gravity Eastward, the firm said it will “focus on growth opportunities in the APAC regions including: Hong Kong, mainland China, Thailand and Australia”. “As with all of our other locations, we look to open an office with a trusted local team of specialists that will marry with our global vision and international client experience,” Maclaurin said.

More than 80 per cent sales and charter clients are based in Central Europe, UK and US, with the remaining 20 per cent are from the rest of the world, including South America, UAE and Asia. The single largest client demographic is Russia.

Paying up
Ocean Independence says it has a straightforward, transparent financial model between brokera and boat owner - there is a flat-rate commission paid to the broker on all bookings. This process can become more complex during the competitive negotiation with charter clients. There are issues to weigh up - how long is the charter going to be, how large the crew, choice of destination, and so on.

“As an industry, there is an unwritten policy as we are all offering the same product at the same price. Brokers therefore need to differentiate themselves through quality of service, advice and experience,” Maclaurin said.

The firm has a technical services division, called Ocean Management and the business has a crew service business, employing more than 300 crew members in total.

As mentioned above, some of the figures for sales and transactions in the super-yacht sector are impressive. So how has Ocean Independence fared?

“In the last 11 years we have completed 224 super-yacht sales with an impressive combined length of 7848 million. Our largest sale was a 91 metre mega-yacht; we actually sold her twice during a three-year period,” Maclaurin said. “In our sales fleet, we work with such a diverse portfolio of product; one day we can sell an iconic yacht that was built in 1929 and the next day, one equally as big but built almost one hundred years later, in 2011,” he added.

One diverting feature on the firm’s website was a video, set in the Mediterrean about Explorer yachts. How did this come about?

“The Top 10 Explorer Yachts was a feature that we compiled as part of the first and Ultimate Adventure edition of our new magazine, PURSUIT. All of the yachts represent both the sales and charter side of our business operation,” he continued. “Adventure and exploration as passions, reflect a growing trend with our clients wanting to point the bow to access and experience more remote places. Motor yacht PLAN B is a wonderful example, specifically for charter; she has been built for adventurous programmes and spent this summer in Norway, far away from the super-yacht runways of the Mediterranean,” Maclaurin said.

While some of the sales and construction data look impressive, this sector for super-yachts hasn’t been immune to global economic pain. “The crisis in 2008 and lack of ‘supply’ for sales purchase was met with shipyards offering more competitive packages to build, therefore there continues to be consistent demand in the new build market,” he added.