“Newer owners to the industry … are keen to use people from their own office to take on the management of yachts. I’ve come across it quite a lot in the last four to five years. The problem they come across, is they still need to have some interaction with someone who knows something about yachts, whether that’s an independent advisor, a manager or someone who sits somewhere in between. The biggest problems I’ve noticed, although family offices are really good at the tax, finance, accounting and day-to-day operational management of business, where they struggle is the yacht bit,” explained Mark Upton, director at MGMT Yacht.
“I’m sure owners would be much happier to be able to use their own office to operate everything on a daily basis, as fair as their yacht is concerned, but I think it’s just the intricacies and the technicalities of the yachting industry … make it so different from the corporate and commercial world. Yachting’s a funnily old industry and it just takes time for people who’ve come from outside to take a grasp on how it works and why it’s different,” continued Upton.
And in the context of the increasingly regulated superyacht industry, the requirement for a managing body with a comprehensive understanding of imposed directives is paramount, as Yves Danette, director of yacht management at Y.CO, explained: “The regulations imposed on commercial and/or large yachts such as ISM, ISPS and MLC [Maritime Labour Convention, 2006] are likely to steer them away from this option when faced with the costs and compliance requirements levied on the shore-side office as well. Yacht management companies are experts in this field and have the internal systems, processes, resources and specialised knowledge needed to ensure that all protocols are met and maintained. This is why larger yachts and those used on a commercial charter basis choose to use the knowledge, comfort and peace of mind that a management company can offer.”
- Mark Upton, director, MGMT Yacht
But can owners find a happy medium and utilise the comfort of the family office alongside the yacht-specific knowledge of a management company? According to Upton, this possibility lies on the horizon for today’s owners. “What I would like to see is the ability for yacht owners to mix the services they want. That’s where I think there’d be a great benefit. Companies will provide limited services because the owner says, ‘I can do the rest of things in-house’. This, I think, is the perfect compromise.”
The question of “Do I or don’t I?” when it comes to the choice of the family office for first-time superyacht owners is like to be ongoing. However, it is worth considering whether there is a yet-untapped relationship between management and family offices that has the potential to be of great benefit to today’s and tomorrow’s superyacht owners.