Monaco matches Ryder Cup for US-Euro rivalry
The Monaco Yacht Show has parallels with the US-Euro rivalry in golf's Ryder Cup. (Photo: ES Lee)
Golf’s Ryder Cup between the might of the USA versus the best of Europe teed off today in what will be a feverish, partisan atmosphere on New York’s Long Island*.
Just as electric, but with fewer chants of “USA, USA”, is the Monaco Yacht Show.
And the chat among yachting’s dealmakers, including a sizeable American contingent, on pontoons, quays and cocktail parties this week is broadly the same: US vs Europe (and the rest of the world), what’s the story?
But while the golfists are busy talking birdies and comparing trousers (pants), much of the discussion in Monaco centres on three major themes: tariffs, bonus depreciation in the US as a result of President Trump’s One Big Beautiful Bill and currency fluctuations.
The overall sense is a “robust” market, according to Jim Evans, co-founder of SuperYachtsMonaco speaking at the Marine Money Forum in Monaco on Tuesday. He suggested there is a split in the market, a “parallel universe”, with a “very hot” top end above about 70m (“We’re selling to 1% of the 1%”) and oversupply in the 20-40m segment. “Where you have a 20-40m, it’s a lifestyle accessory; these huge boats are geopolitical assets,” adds Evans.
Marco Valle, CEO of Azimut Benetti Group, also speaking at the forum, said: “Cannes was our best show ever for boats above 30m.” Valle also suggested the show earlier in September gave a good snapshot of the market with buyers from west and east Europe, Syria, Armenia and the Middle East. Asia is “still a little bit underperforming” he said.
But he added: “The question mark is about the US market.”
READ: Buying at Monaco – why good LOI’s are key
Surfing the wave
At Bethpage, the venue for the Ryder Cup, there is a sign which reads: “Warning: The Black Course is an extremely difficult course which we recommend for only highly skilled golfers.” The same could be said of the US superyacht market.
“I’ve lived in the US for the last 15 years and I’ve never seen anything like the last few months,” said Pietro Berardi, CEO, Sanlorenzo of Americas, referring to the uncertainty caused by tariffs, which would apply to yachts imported into the US.
“People are not comfortable. We are living every day trying to surf the wave. It’s very challenging.”
Zack Hamric, MD of superyacht financing specialist Azul Marine Lending told the forum the recent environment has been like “trying to drive down a highway in Italy blindfolded”.
There is a sense, though, that a “calmness” is descending as the implications of tariffs are better understood, according to new Heesen CEO Jeroen van der Meer, speaking aboard the company’s 55m M/Y Agnetha in Cap d’Ail harbour. Heesen’s new owner Laurens Last thinks geopolitical wrangling such as tariffs is not a cause for kneejerk reactions.
“From a business strategy perspective, we cannot change our strategy because of politics,” he tells us.
Simone Meletti, chief financial officer and MD, Ferretti Group of America suggested there are “many ways” to avoid paying tariffs, with legitimate legal advice from experienced lawyers. “We are seeing more people apply the methodologies,” he said.
Sophisticated borrowers
AJ Blackmon, founder of Florida-based Ikonic Yachts, sees the 40m+ market in the US as “incredibly strong”, particularly as larger vessels flagged offshore, and therefore not imported into the US, are immune from tariffs. “Yes, it was a slow start, but I feel confident Q4 will have incredible activity that indicates a surge in US-driven transactions,” he tells us.
Bob Allen, founder Robert Allen Law, speaking at the forum, agreed. “What I note from a buyer’s lawyer’s perspective, is demand seems to be tremendous.”
According to Toby Robilliard, head of Marina and Aviation finance at Investec Bank, the lending market is “buoyant” with “more sophisticated borrowers” employing capital arbitrage.
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Over on the Denison Yachting stand in the heart of the Monaco show, founder Bob Denison insists he is “extremely bullish”. “Long term it feels really good,” he tells us.
“There is so much money on the sidelines, an ageing demographic with a lot of wealth retiring and looking for fun things to do. And fortunately for us, yachting is a fun thing to do.”
Chatting in the offices of Jaffa and Co. overlooking Port Hercule, founder James Jaffa acknowledges “big US money is still buying big boats” but concedes the sub $10m market is “much softer”. The Middle East, meanwhile, is “absolutely storming”, he says, while Europe continues to deliver. A geographic relocation of wealth muddies the water, he adds. But Jaffa acknowledges that there has been a raft of deals falling through of late.
“It’s a consequence of buyers having expectations of fire-sale prices and wanting everything on their terms and sellers not needing to sell,” he tells us. “Then it all becomes a bit too complicated and people lose motivation.”
Misinformed
Some think the introduction of 100% bonus depreciation – allowing owners of a vessel used for business purposes to offset tax – will cause a flurry of transactions before the end of the year. Jaffa notes a “big uptick in July and August”, but he wonders whether the tax advantages are enough of a draw.
“They’re still not buying yachts like they’re candy because tariff trauma and the uncertainty of what might happen in the next six months outweighs the benefits of being able to write off your taxes,” he adds.
Blackmon believes it’s too early in the process for depreciation to be “originating deals on its own merit”.
“All of the yachts I’ve sold over 35m since Covid have utilised bonus depreciation strategies. But, and this is crucial, it wasn’t the sole driver for any of these purchases,” he tells us. “In reality, depreciation makes these deals incredibly complicated. Anyone selling the pitch that bonus depreciation alone makes a yacht purchase make sense is wildly misinformed.”
He adds: “The requirements are specific and unforgiving. I’ve been on dozens and dozens of tax calls with counsel, and I’m still learning how each client’s situation is completely different. Every deal teaches me something new about the intersection of yacht ownership and tax strategy.”
Hamric added: “If you don’t do it right, you’ll be the biggest audit target in the world.”
READ: Handshakes and hot buyers – the view from Cannes
The other headwind, as interest rates begin to ease, is the recent dramatic dollar-euro exchange rate fluctuations.
“In my opinion, that will be the most challenging thing to overcome,” added Ferretti’s Meletti.
Taking a big-picture view, Timothy Hamilton, director, Lürssen Americas suggests US wealth accumulation is “not going to slow down”.
“The amount of young people who are billionaires is mindblowing and I’m super bullish in the medium to long term,” he told the forum.
The genteel hum of Monaco might not match the bear pit of Bethpage, but in yachting as in golf, it’s clear the US remains the powerhouse.
*If you’re reading this on Monday, congrats Europe.
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