Superyacht Investor London 2022: Sanctions lead to choppy waters
There were no Russian yacht owners at Superyacht Investor London 2022 for obvious reasons. But the effects of the Russian invasion of Ukraine dominated much of the conference.
It started with an excellent session looking at the impact from the Russian invasion of Ukraine. Daniel Martin, from HFW and Miguel Angel Serra, from Albors Galiano Portales, covered the legal issues. While , CEO of leading refit yard MB92, explained how difficult it is for companies to comply. Mennem believes we may see average lengths of yachts come down without Russian buyers. Some 76% of the audience of 200 senior dealmakers agreed with him. “Who really needs a 120m yacht?” he asked.
Financiers are concerned that when seized yachts are eventually released onto the market, it could have a big impact on all large yacht values.
“We have had owners contacting us asking if there are bargains out there,” said one broker. “But when people look into the risks involved, they quickly lose interest.” Some 80% of attendees believed yachts will be held by governments for more than one year.
Yacht managers stressed the importance of client due diligence. The charter panel discussed amendments to charter contracts to cover sanction risk and the insurance panel looked at how difficult it is to provide cover to anyone with a connection to the country – even if they are not sanctioned.
With 84% of attendees thinking that more sanctions are likely, Russia is going to dominate discussions for many more months to come.
“Even having a Russian name is difficult. We had a Ukrainian client looking for a charter, but the bank was not happy with the name,” said one yacht broker. “So it could not happen.”
But, while many are concerned about inflation and falling stock markets, 64% of delegates believed that the market can keep growing. “There still is a boom, despite the many challenges we have had to face in the last two years,” said Raphael Sauleau, CEO of Fraser Yachts. “We have been very fortunate to have this eagerness for yachting all year round.”
Will Christie, founder, of Christie Yachts, believes things may slow down: “It is not sustainable – not because of demand but because of supply. We have a long list of people who want to buy but are really struggling to find boats. A lot of owners have re-engaged with ownership in the last few years.”
Jamie Edmiston, chief executive, Edmiston said that there are no signs of charter demand falling. Their bookings are 60% ahead of last year – with 40% of clients new to yacht charter. “An extraordinary amount of wealth has been created in the last few years and even if the stock market halves people will still have a lot of money. And many of them want to go yachting.”