Pension pots and superyachts make a big splash

Can rich people find undisturbed lesiure only aboard an oversized boat?

 

A few days ago, I sailed past Sir Philip Green’s new superyacht Lionheart: nearly 3,000 tonnes of floating bombast at anchor off the Greek island of Skiathos.

It reminded me of the only time I boarded such a boat – belonging to another tycoon with pension troubles, Robert Maxwell. In 1988, he flew me and other journalists to Corsica to join him on the Lady Ghislaine so he could explain his latest publishing deal over lunch. Three years later, the media mogul disappeared from the same yacht, thus dodging the personal consequences of his looting of the Mirror media group pension funds.

Unlike Maxwell in 1988, Green, recently lambasted by House of Commons MPs for his poor stewardship of retail chain BHS, was not in a forthcoming mood. (He is not accused of any illegality in relation to the underfunding of pensions at BHS, which he sold last year). The retailer did not respond to my text offering to buy him a drink and he declined other reporters’ attempts to interview him.

But seeing Lionheart – which, at 90m, is 35m longer than Maxwell’s vessel – made me realise how superyachts sum up the flaws and contradictions of business success.

Living out Nemo fantasy

Vastly wealthy men (and a few wealthy women) seem to feel they are the only places they can enjoy undisturbed leisure, living out the fantasy portrayed by Jules Verne in 20,000 Leagues Under the Sea. Its anti-hero Captain Nemo is able to circle the globe in near-total secrecy in a giant submarine, Nautilus, complete with the latest technology, luxurious decor, haute cuisine and a library with “books on science, ethics and literature . . . [but not] a single work on economics”.

Unlike Nautilus, though, superyachts are hard to hide. When moored in Monaco alongside others, the billionaires and oligarchs may as well be living in an overlooked suburban semidetached, albeit one with its own spa, jet skis and, occasionally, small submersible. Paradoxically, being seen is often part of the attraction of owning such an oversized vessel.

Large yachts are meant to enhance the reputation of their owners with ultra-rich peers. But when things go wrong, they undermine their image. When I tweeted a picture of Lionheart, a number of people pointed out that Green’s sundeck was within range of a well-aimed rotten tomato.

In The New New Thing, Michael Lewis chronicles Jim Clark’s obsession with Hyperion, his computer-controlled yacht, as the dotcom bubble inflated in the late 1990s. At one point, Netscape’s co-founder learns someone is building a bigger boat: “One minute he could say, ‘Who cares which rich guy has the tallest mast?’ - and actually believe every word of it. The next minute he would be standing [with] the mast jutting out from him like an enormous black phallus and booming ‘Mine’s 60m. How long is yours?’”

Intelligence and testosterone

Lewis witnessed “intelligence and testosterone . . . wrestling for hegemony”. It is easy to see how such a wrestling match could transfer from the bridge to the boardroom, where corporate leaders already love to picture themselves as masters of ships tossed by unpredictable storms.

There is a good reason why Nemo banned economics books from his onboard library: the economics of building and running such vessels are terrifying. Green (or possibly his wife, who owns the retail empire) reportedly paid $150 million for Lionheart; the world’s biggest superyacht, the 180m Azzam, cost the sheikh who probably owns it well over twice that.

Towergate Insurance, which last year compiled a list of the true costs of such showboats, says cover alone could run to $240,000 (€217,000) annually. Operating costs amount to at least 10 per cent of the purchase price. No wonder most owners hang on to their boats for only three years and that J Pierpont Morgan supposedly uttered the line “If you have to ask the price, you can’t afford it” to warn a contact against following him into yacht ownership.

I can see only two advantages to owning large boats. One is to indulge at scale a childhood hobby, as dedicated sailor Sir Charles Dunstone, the Carphone Warehouse founder, does. Another is making beautiful boats seaworthy again, as household gadget grandee Sir James Dyson has done by restoring Nahlin, a 1930s steam yacht, which seems a worthy allocation of funds.

In general, though, while nothing stops magnates spending honestly earned billions with as little taste and as much extravagance as they can afford, most superyacht purchases reflect all their worst traits: hubris, personal greed, an overaggressive need to compete and a disregard for public opinion. Worse, superyachts allow their owners to indulge a Nemo-like illusion that they can cast off from the real world, where, as Maxwell discovered and Green may yet, judgment can be harsh, retribution painful and nemesis as hard to avoid as an uncharted reef. – (The Financial Times Limited)

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