In the glory days of the bull stock and real estate markets, many lords of finance were grabbing their own yachts.
Now that much of their wealth has been destroyed, they are turning to fractional shares rather than outright ownership to get their yacht fix.
“Fractional ownership makes a lot more sense in today’s world given that bonuses are lower and the world generally is in a much tougher environment,” Peter Mallinson, part owner of “Ocean Emerald,” told Bloomberg. Ocean Emerald is a $21 million, 131-foot vessel.
Mallinson retired as a managing director at Goldman Sachs in 2002. Now he works for CDK Investments. Nomura’s European investment banking chief Ruggero Magnoni, also owns a piece of Ocean Emerald.
Bloomberg reported that mega-yacht builder Rodriquez Cantieri Navali, which produced Ocean Emerald, plans to make 10 boats for a time-sharing program.
With compensation for financial masters of the universe falling like a stone anchor, sales of yachts longer than 79 feet may drop 38 percent in the year through August, according to a forecast by University of Rome analysts cited by Bloomberg.
That’s a far cry from the average increase of 11 percent in the previous eight years.
And the trend may continue.
The number of people with assets of at least $30 million to invest dropped nearly 25 percent last year to 78,000, according to the latest World Wealth Report produced by Merrill Lynch and Capgemini, and cited by the Financial Times.
© 2013 Newsmax. All rights reserved.