November 5, 2007, 12:28 pm
Venture capitalist Tom Perkins is making the media rounds these days to promote his new autobiography, “Valley Boy.”
On 60 Minutes last night (see video clips here), Mr. Perkins showed off his 289-foot sailboat, the Maltese Falcon, which is the largest privately-owned sailboat in the world. While the display may be repulsive to some, I found Mr. Perkins’ honesty about his showy ways refreshing.
Lesley Stahl, for instance, asked Mr. Perkins why he needed to have the biggest boat.
“I could give you some technical reasons why it really has got to be big to work right,” he said. “But I just wanted the biggest boat.” He added: “Do I have an ego? Yes. Is it big? Yes.”
Mr. Perkins was a bit more coy about the boat’s actual cost. He says the that the rule of thumb with big yachts is $1 million per meter. But Ms. Stahl said she’d heard the boat cost between $150 million and $300 million. Mr. Perkins says it didn’t cost $300 million, but he declined to give a number, beyond saying “I’m embarrased about how much it cost. There’s the homeless and charity and a lot of things you can do with that money that would improve the world.”
At one point, Mr. Perkins strings nautical flags up the masts that spell out the following: “Rarely does one have the privilege of witnessing vulgar ostentation displayed on such a scale.”
Ms. Stahl went on to list just a few of Mr. Perkins’ playthings: the Bentley, the $450,000 Porsche, the Aston Martin, the second yacht, the 900-year-old moated estate in England. Ms. Stahl asserted that with all these baubles, Mr. Perkins likes to show off.
“Guilty as charged,” he said. He went on to say that his need for conspicuous consumption probably goes back to his mother, who was always wishing for things his poor family couldn’t buy. “The fact that we didn’t have any money was very evident in my life,” he said. “She talked about it all the time. That rubbed off on me.”
Granted, blaming your $150 million sailboat on your mom may be a stretch. But Mr. Perkins should get some credit for saying what so many rich people think but won’t say: I want the biggest, and I want the best. I worked hard to earn my fortune and I deserve to do what I want with it — even if it doesn’t help the world.
In an age in which the wealthy hide their yachts, mansions and jets behind populist rhetoric (they’re just normal, humble guys — or they bought the boat/mansion/jet “for my family”), Mr. Perkins tells it like it is. He’s rich, he’s vulgar and he’s proud.
October 19, 2007, 11:47 am
You’ve heard of train-spotters and maybe even plane-spotters. Now comes a new innovation in the world of wealth voyeurism: yacht-spotters.
Yacht-spotters are boat-obsessed individuals around the world who hang around docks, marinas, shipyards and ports snapping photos of megayachts and charting their migratory patterns. Some are in the yacht business; others live by the water or own boats themselves. But all share what they call a “passion” for rich people’s boats.
Their numbers are rising, lifted by a tide of new Web forums and the spawning of more and more big yachts around the world. The number of private boats under contract that are longer than 120 feet has more than doubled over the last four years — it’s now 370, according to data about to be released by Showboats International.
My print column today looks at the rise in yacht-spotting sites, and how they’ve become something of an annoyance to rich, private boaters. As Jonathan Beckett of Nigel Burgess told me: “It’s a bit disturbing that people can now track exactly where a certain megayacht is located or where she’s anchored. I can see how it might be useful to some people. But I don’t think it’s very healthy.”
Still, most of the sites are innocent enough. And these sites make for entertaining Web browsing, especially for those who like to peek into the lives of the wealthy.
Some of my favorite threads on those sites show the less-visible sides of the boating world. Take this thread on Yachtspotters, which shows high-priced yachts in various wrecks, scrapes and groundings.
Other threads track boat movements. Want to see where Larry Ellison’s 454-foot ship, Rising Sun, has been over the summer? Click here. And here’s a link to the recent movements of Octopus, Paul Allen’s 414-foot vessel. (How such a huge boat managed to dock in Yap, Micronesia is beyond me.)
The sites also have endless shots of the boats at anchor, docked at marinas, lit up at night, and squeezed between other yachts at Cannes. The Megayachts forum has some especially great photos on this thread. Another of my favorite threads is about strange or bad-looking yachts. And for those into scenery, here’s a great thread on Yachtspotter with pictures from the Monaco boat show.
Some of the wealthy may be a bit bothered by all the attention their water toys attract. But if a billionaire builds a 414-foot boat, he or she can expect (if not want) a little attention. And after all, isn’t one of the most-important responsibilities of great wealth to provide fantasy for the general public?
August 24, 2007, 11:03 am
At Davos earlier this year, Sergey Brin, the Google guy and self-described environmentalist, defended his use of a Boeing 767 private jet by saying he purchased carbon offsets. Carbon offsets, or credits, are donations to help mitigate the impact on the environment from carbon emissions.
But even Mr. Brin admitted he didn’t know whether carbon offsets really helped.
“I’m not sure,” he told reporters. “I think it does something. But I think I would pursue something more specialized and personal” rather than relying uniquely on offsets, which, are “the most expedient thing I could do.”
The green movement has become the latest thorn in the side of the rich. They want their luxuries — their fleets of private jets (10,000 in the U.S. and counting), mega-yachts, cars, and giant estates. But they don’t want to be pilloried by the press as pollution hogs. Or, as a recent humor piece in the New Yorker said of a fictional lottery winner: “I’ve been thinking a lot about the environment now that I own so much of it.”
So the rich are coming with new ways to shrink their environmental footprints, without giving up their designer shoes.
My column today looks at three luxuries — yachts, private jets and mansions — that the rich are trying to make more environmentally acceptable.
For jets, they’re buying carbon offsets. For yachts, they’re installing ocean-monitoring equipment (presumably for determining how much the oceans are warming due to yacht emissions). And for homes, they’re building 7,500-foot EcoManors.
It’s easy to ridicule the moves as guilt payments. And they certainly don’t represent much of a sacrifice: A carbon offset for a $20,000 private jet charter will only cost you about $70 — which, by the way, is tax-deductible. If the rich really were truly dedicated to the environment, they would drive smaller cars, build smaller houses and trade their Feadships in for kayaks.
But c’mon — that’s not going to happen.
As Eric Carlson of the Carbon Fund told me: “These people aren’t required to do anything. We should praise those who make an effort.” Plus, as he and others say, the rich could take the lead in helping to fund alternative-energy markets, and thus drive down prices so they can become more available to the rest of us.
What do you think? Are the new green-friendly rich pioneers, or hypocrites?
July 26, 2007, 1:20 pm
Larry Ellison already owns the second-largest private yacht in the world — his 454-foot Rising Sun.
Now, he’s building another one.
According to the latest issue of Power & Motoryacht magazine, Mr. Ellison has commissioned a new yacht to be built in Europe. The mag doesn’t offer many details. Yet yacht-industry experts tell me that the new Ellison boat is slated to be about 80 meters long and is being built by Feadship. It’s scheduled for delivery sometime after 2010.
Why, you might ask, does Larry Ellison need another yacht?
Because Rising Sun is too big.
As Wealth Report readers might remember, Mr. Ellison has been complaining for years that the boat he built specifically to be the longest in the world — or at least to be longer than Paul Allen’s — turned out to be rather impractical. He can’t dock at most of the world’s marinas, since his boat exceeds size limits. When he pulls into shore, he has to tie up with oil takers and container ships at industrial ports. (Not very posh.) Or he has to anchor offshore and take tenders to the dock.
Larry’s other complaint, according to friends, is the “lack of intimate spaces” on the boat. With its Zen-like, modern design, the boat feels cold and imposing both inside and out. “It’s like walking in an empty mall,” says one friend who’s been on the ship.
So Ellison sold a share in the boat to friend and fellow billionaire David Geffen. It’s unclear whether his new boat means he’ll hang on to Rising Sun, sell it to Geffen or another buyer, or keep his share.
For now, however, it looks one of America’s flashiest billionaires may actually be downsizing.
July 12, 2007, 4:00 pm
The superrich like to go places that mere millionaires can’t. Like space. Or the bottom of the sea — in a private luxury submarine.
According to this article in the International Herald-Tribune by my former Journal colleague A. Craig Copetas, more and more of today’s wealthy are buying large, personal subs to explore the ocean floor.
Copetas writes: “Journeying to see what’s on the bottom aboard a personal submersible is a wretched excess guaranteed to trump the average mogul’s stable of vintage Bugattis or a $38 million round-trip ticket to the International Space Station aboard a Russian rocket.”
The article quotes sub builders and experts saying there are now about 100 luxury subs cruising the seas. A 10-passenger sub will run you about $10 million, while a model with five staterooms, five bathrooms and two kitchens will run about $25 million.
But buyer beware: Governments get defensive when they detect unidentified subs in their waters — especially those with sonar scanners that can be confused with torpedo tubes.
Yacht experts tell me that Paul Allen’s boat, Octopus, has a personal submarine that holds 10 people. Yet they add that it took months to get the craft working properly, since it was stowed in a special James Bond-like hold in the yacht hull. The sub is painted bright yellow — Mr. Allen is a Beatles fan.
Yacht folks also tell me that Russian oil magnate Roman Abromovich has a two-person “run-around sub.” It’s stored on his boat Pelorus. (Update: A spokesman for Mr. Abramovich says the oil tycoon doesn’t own any subs.)
Still, as one yacht broker put it: “You have to be a little odd to want one of these.”
July 2, 2007, 11:59 am
When it comes to bad loans, most of the attention these days is on the subprime market: Too many banks made too many loans to people who didn’t have the incomes to support their payments.
Now that the subprime market is drying up, banks are turning to the wealthy to keep up the revenue stream. The rich are rich, they figure — they will always be able to pay the loans back and have plenty of assets to back them up.
Yet every loan has risk. And as banks get more aggressive in writing loans to the wealthy, they are increasingly underestimating the amount of leverage that the rich have taken on in recent years.
I’ve written about these risks before. But an article in the New York Times by Christine Haughney shows lending to the rich has reached new extremes. According to the article — its headline is “The $3.6 Million Mortgage” — the number of multi-million-dollar mortgages in New York has exploded, with some banks going beyond their lending guidelines.
Keith Kantrowitz, the president of Power Express Mortgage Bankers, told the Times that the average mortgage requested by his borrowers in Manhattan has nearly tripled in the last two years to about $4 million. He’s even arranging interest-only mortgages for four borrowers in Manhattan, each for $30 million or more.
The article says the rich borrowers are using the money for real-estate investments, and that most of them are “overqualified.” Yet the article fails to emphasize the risks inherent in such loans. The New York property market could plunge, leaving the borrowers with big losses. All you have to do is look at the Miami condo market to see what happens to wealthy flippers and speculators when property prices tumble.
And the rich aren’t just leveraging houses. Financing for yachts and jets has also soared. Yacht brokers tell me that borrowers today can finance 60% of the value of their yachts — with some stretching even higher. That’s a big risk for a relativelty illiquid market (pardon the pun) with a history of price swings. The same holds true for art and jets, which have become equally large sources of lending.
I’m not saying high-end lending is poised for a meltdown. But anyone who thinks loans to the rich are no-risk propositions should remember the late 1980s.
June 4, 2007, 3:42 pm
I was browsing through my latest issue of Yachts magazine — I am what’s known as an “aspirational reader,” since my boating experience consists of renting a kayak once a summer — when I noticed a stunning advertisement.
The ad was for a yacht-brokerage firm called 4yacht.com. They were listing a very big yacht named Everest. I don’t mean big as in 300 or 400-feet big. I mean big as in 656-feet big. That’s right, 656 feet — which is pretty much a private cruise ship, without all the people or the buffet rooms to clutter things up. Here’s another listing for the boat on Yacht World:
The 200-Meter “EVEREST” can have accommodations for 36 passengers and guests consisting of 17 apartments and an Owners private penthouse suite on the top deck. Every suite will have private terraces. In addition the yacht will have an outside swimming pool with a cinema arrangement, large gymnasium, sauna, steam rooms, indoor cinema, and a beach club with side folding platforms port and starboard, as well as a large drive-in docking facility at the aft end for boats and a small submarine. Price on request. Serious Inquiries Only!!!
Since I recently wrote about the world’s largest yacht under construction, the Eclipse, I was a bit confused. Was Everest eclipsing Eclipse? And if Everest represented the highest peak in yachting, what are they going to call the next biggest boat? Bigger than Everest?
For help, I called Diane Byrne, the executive editor of Power and Motoryacht magazine. Diane writes the magazine’s annual list of world’s largest yachts and follows this stuff obsessively.
She says Everest isn’t really a boat. It’s a proposal — a set of preliminary blueprints that brokers and designers try to pitch to potential buyers. Brokers like proposals because they help potential buyers have something more concrete to look at when shopping around. And buyers like them because they help reduce construction time by a year or two, since some of the basic design work and logistics have already been done.
“The upper end of the yacht market has exploded, so there’s been a movement by designers and builders to create proposals,” Diane said.
Of course, any buyer of Everest would have some big challenges to overcome. For one thing, the boat is to big to dock in any standard marina. “They would have to dock in a commercial, cruise-ship terminal, and I’m not sure cruise terminals would even let them,” Diane says. “And that’s not as fun, since there’s an element of showing off” with boats this size.
And of course, there’s the price tag. The “whisper” price for Everest is 350 million euros. That’s right, euros.
May 25, 2007, 12:20 pm
First we heard about the Gulfstream shortage. Then the Ferrari shortage and the Rothko shortage.
Now, in the latest sign of the skewed economics of today’s wealth boom, we learn about the yacht shortage. According to yacht builders in the U.S. and Europe, the waiting lists for megayachts are now stretching to three years or more. The problem: too many yacht buyers, not enough yacht-making capacity. Yacht makers are expanding as fast as they can to meet demand. But finding qualified labor is difficult — there are only so many plumbers who can install antique French faucets for nautical use. And other yards are leery of expanding too rapidly, lest the boom turn into a bust.
Yet the imbalance between supply and demand in the yachting world has also created an interesting arbitrage opportunity. Meet the yacht flippers — people who commission yachts and then sell the half-finished or almost-finished boats to other buyers for multi-million-dollar premiums. It’s like real-estate flipping, but with $35 million boats. And it’s become a highly profitable business.
My print column today offers a peek into the deals of three of today’s biggest yacht flippers — Terry Taylor, Rick Hendrick and Felix Sabates, the king of flippers. Mr. Taylor, for instance, has purchased five yachts since 2001 but is currently boatless, since he’s sold them all. Mr. Sabates has flipped more than 18 boats over the past 15 years or so, but at least for now his flipping days are over — he was buying so many boats from Trinity Yachts that he decided to become a partner.
Just like real estate, yacht flipping carries risks. If the wealth boom fades and the yacht market tanks, the flippers could be left with pricey boats they’ll have to own. But they’re rich enough that they can afford it. (Who knows, they might even enjoy owning a boat!) And for now, flippers seem to be having the most fun in the boating world.
“Flipping boats,” says Mr. Sabates, “is a better business than building them!”
May 21, 2007, 2:37 pm
While the broader retail and consumer sector may be slowing, spending by the rich continues to astound.
A new survey of 198 people worth $10 million or more, conducted by Prince & Associates for Elite Traveler magazine, shows that the wealthy will spend 56% more this summer than in 2005.
Yacht charters top the list, with $384,000 in planned spending, which sounds about right, given that big yachts now charter for $200,000 to $250,000 a week. (See average planned spending of Prince respondents in 10 categories below.)
Ranking second was redecorating. Granted, redecorating may not seem like a popular summer pasttime for the rich. But since they’re usually traveling for the season, it’s an optimal time to let in the contractors and install that new lap pool or home theater.
Another high-ranking spending category: “experiential excursions.” For those unfamiliar with this new breed of primal-luxury vacation, they usually involve paying some high-priced guide to take you and your family running with springbok in Botsawana, trekking with penguins in Chile or learning wine-making in New Zealand.
Of all the categories, however, the one that almost all respondents planned to spend money on was charity. Fully 98% of them planned to donate to charity this summer, averaging $82,000. All those summer fundraisers may also explain why the rich plan to spend $56,000 on entertaining, and $24,000 for wine for entertainment.
|Summer Activity||Average Planned Spending|
|Out-of-home spa services||$61,000|
May 8, 2007, 11:40 am
Buying a Ferrari is one of the joys of being rich.
It’s one of those “you-know-you’ve-made-it-when” rites of passage, along with the house in the Hamptons (or Aspen or Palm Beach) and the American Express black card.
But today there are so many newly minted multi-millionaires and billionaires around the world that there simply aren’t enough Ferarris to go around. An article in today’s Journal by Gabriel Kahn explains that the waiting list for a new Ferrari has grown from the standard 12 months to 24 months or more in Hong Kong, the U.S., Australia and England.
The reason: huge demand for Ferraris among the new rich in Russia, the Middle East and Asia.
Ferrari’s chairman, Luca Cordero di Montezemolo, swore in 1990 that Ferrari would never make more than 5,000 cars per year. Now they’re making 5,700 and still can’t keep up with demand: “We started to consider 18 months [to wait] ideal, but now we can’t even keep up with that.”
To its credit, Ferrari isn’t doubling its production to keep up with the demand (thus avoiding the mass-luxury trap that has beset Jaguar, Mercedes and others).
But the result is a new V-VIP economy, where mere millionaires are bumped down the Ferrari waiting list by Arab sheikhs and Russian oligarchs who have been longtime customers and are buying two or three cars at a time. (Ferrari denies that it fiddles with the list, but let’s get real — the have-mores get better treatment than the haves in all luxury businesses.)
And Ferraris aren’t the only luxury product with a waiting list. Try commissioning a new 250-foot yacht these days. You’ll find yourself on a waiting list of at least a year, sometimes two. Want to buy one of Gulfstream’s new top-of-the-line G550s? Prepare to wait at least a year.
The millionaire glut is even appearing in the investment world. There are so many rich investors trying to get into the top hedge funds and private-equity funds these days that many are getting turned down. Private banks say one of the biggest problems for their clients today is “access” — finding top managers who are willing to take money from their rich clients.
What to make of this new luxury logjam? For the wealthy, it’s a constant headache. After all, they worked hard to make their fortunes and now they want the rewards. Spending $125 million for a boat and then being told to “get in line” has got to be humiliating for today’s rich.
Yet the rich have to realize that the economic forces that are making them rich — liquidity, globalization, technology — are making lots of other people rich too. And as more and more people get rich, they can’t all have the same luxury goods. Or if they can, they’re no longer luxury goods.
So the wealthy need to adjust their sense of privilege. They should accept that they may be rich, but they’re no longer that special. There are plenty of people just like them — and plenty more who are even richer. If today’s wealthy really want a sports car that they can buy today and drive tomorrow, they might have to settle for a Porsche.
April 9, 2007, 11:58 am
For the rich, ownership used to be everything.
Ten years ago, no self-respecting multi-millionaire or billionaire would have been caught dead in a rented car, rented house or rented boat. What was the point of being rich if you couldn’t own your own status symbols?
Now, a sea change is sweeping through the luxury world in the form of fractional ownership. It started with jets, then moved to plush vacation homes (rented by destination clubs) and automobiles available from exotic-car clubs.
The next wave in fractional ownership? Yachts. Evan Roth, of BBR Partners, the New York multi-family office, sent me this article by Shelley Emling in the International Herald Tribune about YachtPlus. The U.K.-based company is building a fleet of 10 yachts to be sold off in fractional pieces. Each of the 132-foot long boats will be divided into eight shares sold for $2 million each. (For those about to get out their calculators, that works out to $121,212.12 a foot.)
In the article, Han Verstraete, chief executive of YachtPlus, says that the rich no longer prize ownership. They prize experiences.
“My typical customer will have three real-estate assets and perhaps also do some sharing of jets,” he says. “The yacht experience is the experience these people are seeking next.”
The article also quotes James Lawson, senior research director at Ledbury Research, saying that “many wealthy people are looking for driving lessons organized by Ferrari, cooking lessons by celebrity chefs, and exclusive travel and holiday experiences. Experience is becoming more important than ownership.”
This is the common sales pitch from all fractional companies. Why own when you can co-own? Why deal with the hassles of finding a plumber for your house in Cabo, repairing the transmission on the Ferrari, and hiring your own pilots when you can let someone else do it and still enjoy the ride?
It’s a reasonable argument — up to a point. Today’s wealthy do indeed value experiences as much as things. But that doesn’t necessarily mean they want to share the cost of their things. Fractional ownership is likely to keep growing as the ranks of wealthy and affluent explode. But the industry will have to overcome three major hurdles:
1. The Christmas-Vacation Effect. Tanner & Haley, the first destination club, went bankrupt in part because all of its members wanted to be in the same vacation spots at the same times. So the company had to rent homes to accommodate the unexpected demand. Fractional ownership is based on the premise that all owners will want to use the asset at different times. But, inevitably, they all want to use their toys during peak holiday times — Christmas and New Year, Easter break, and August. When all eight owners of the YachtPlus yacht want to use the boat for the first two weeks in August, what happens? (Even rigorous scheduling and point systems leave people disappointed.)
2. The Wealthy Don’t Like to Share. These are people who have worked hard for their fortunes and are used to getting top treatment. They like things their way. Fractional yacht-ownership has run into trouble in the past because owners typically want their own kind of boat, crew service and trip itineraries. Can you imagine eight multi-millionaires trying to agree on flatware? (Another potential sticking point is YachtPlus’s yachts — while innovative, they look a bit like floating VW Beetles.)
3. Economics. In the end, fractional ownership is only as strong as the partners. What if you buy a boat with eight people and two end up bankrupt? What if the company selling the shares suddenly finds itself in dire straits (a la Tanner & Haley)? While fractional ownership may spread the costs of ownership, it also expands the pool of risks.
And as renting and chartering becomes increasingly popular for top cars, yachts, planes and mansions, co-owning starts to look less attractive. Maybe I’m wrong. But fractional ownership looks to me like it has the potential to combine the worst of both worlds — the price of ownership combined with the personal costs of sharing.
Fractional companies, I welcome your thoughts.
March 6, 2007, 12:16 pm
All those wealthy boaters buying megayachts are suddenly in need of yacht parking spots. Hence the sudden rise of the megayacht marina.
According to an Associated Press article by David McFadden, so-called megamarinas in the Caribbean are proliferating.
Leading the pack is Yacht Haven Grande in St. Thomas, which is getting a $200 million facelift to handle bigger boats. The marina is big enough to boast a dock for Larry Ellison’s 452-foot Rising Sun. And in Grenada, workers have broken ground on a $562 million resort and marina with spaces for boats longer than 250 feet.
Megayacht marinas are also becoming big business beyond the Caribbean. Rhode Island-based O’Neill Properties is building a marina called the Newport Club, on Aquidneck Island. It will have 1,500 marina slips and space for yachts as large as Rising Sun.
The Mediterranean is still king of the megayacht marinas, with more than 10 times as many large-boat berths as the Caribbean. Yet the Associated Press article quotes Michael J. Howorth, a British maritime writer and yacht captain, saying that the Mediterranean may be close to its limit: “There’s no place else to build in the Mediterranean and there’s a lot of local antipathy to new marinas.”
January 12, 2007, 9:13 am
At a yacht show last year, I asked a few boating executives what the natural “limit” would be on private yachts. Yachts were growing so outlandishly large that I figured there had to be a breaking point. At more than 400 feet, you’re really talking about a cruise ship with no passengers, rather than a private yacht. The executives told me that 450 feet was the likely limit. Larry Ellison was already grumbling about how his yacht, the 454-foot Rising Sun, was too big to get into most private marinas. And he complained to friends that he felt “lost” in the ship’s giant rooms.
Turns out, the executives were wrong.
My column today is about the biggest private yacht in the world, being built by Russian Roman Abramovich. It’s called Eclipse and it will be at least 525 feet, and probably longer. Abramovich’s goal was to “eclipse” Dubai, the 525-foot monster owned by a sheikh.
In other words, there is no physical limit to yachts. They will grow as big as today’s fortunes (and egos) allow.
January 8, 2007, 2:38 pm
Larry Ellison, the Oracle chief known for his boat fetish, has been has trying for months to unload his super-yacht, Rising Sun. The 454-foot white elephant, which cost more than $250 million to build, is simply too big to dock at most marinas. And Ellison has told friends he felt “lost” on board because of its size.
Now an old friend has apparently come along to bail him out. According to people in the yachting world, fellow California billionaire David Geffen has purchased a part-ownership in Rising Sun. The deal, akin to fractional ownership, will allow Geffen to use the boat part of the time and pay an equivalent part of the overhead. It’s unclear how much Geffen purchased or what he paid. But a person familiar with the deal said he paid upwards of $125 million for a half-ownership.
Geffen and Ellison couldn’t be reached for comment this morning. Rumors of a deal surfaced last week on Valleywag. Ellison told Vanity Fair in 2005 that he had considered selling the boat but changed his mind.
“It is absolutely excessive,” he told the magazine. “No question about it. When I was talking about selling her, I’d only spent 10 days with her and I didn’t know then whether it was newness or the scale that was the problem. Turns out, it was the newness. It’s really only the size of a very large house.”
Fractional deals have been part of the yachting world for years. But they rarely work: Both owners usually want the boat during the same periods (December holidays, Easter, August, etc.), and they often bicker over costs.
But brokers say the Geffen-Ellison merger stands a better chance because the two are close friends.
“If the deal is structured well, with a lot of detail, this could work out well for the two of them,” said one broker.
Source: Wall Street Blog