"It's hard to see how the mid-sized [brokerage] companies will survive"
Brokerage firms are faced with three options regarding their future, suggests Ocean Independence's Peter Hürzeler…
Trying to run before you can walk has caused the demise of more than a handful of new ventures in the luxury yachting sector; there are numerous companies or individuals who go straight for the jugular of big-ticket deals before understanding the nature of the market they are operating in.
One person who understands the foresight and planning needed in the brokerage business is Peter Hürzeler, managing partner of Ocean Independence, who, in issue 187 of The Superyacht Report, rationalises his strategy for organic growth.
“I don’t see additional growth via acquisition – especially the acquisition of larger companies,” he explains. “If you look at the competition, they are very well-established brands and I don’t think you want to get yourself into a situation where you either have to run two brands or get rid of one because it removes the value of what you’ve built.”
He adds: “We are attached to the Ocean Independence brand since the makeover and we like how we present ourselves, so we would not find it easy to buy another company and drop our brand – and I’m doubtful about running two brands in this industry at this level. We’ve seen it with one or two competitors who tried in the past and gave up, so I think it has to be internal growth.”
"They will either have to go in the boutique direction or become part of a bigger operator, or become a bigger operator themselves."
The market has not consolidated at the pace Hürzeler expected since the global financial crisis, however, he says, “When you look at the amount of investment required nowadays to keep up with compliance and digital developments, it’s hard to see how the mid-sized companies will survive. They will either have to go in the boutique direction or become part of a bigger operator, or become a bigger operator themselves.”
Hürzeler says that Ocean Independence would be “naïve, even stupid” not to try attracting bigger listings as part of the firm’s expansion plan, however he is adamant that the firm must continue to focus on its strength at the other end of the market. This is not because small boats are making big money but because it is still one of the younger of the larger companies and has to grow with its future clients, and its future clients will start with smaller yachts.
“We also have to grow our brokerage team,” he continues, “and you can’t grow junior brokers if they don’t do anything for years because their company is doing 60-70m yachts. If you train and supervise them properly, you can allow a young broker to deal with a 20m yacht earlier on. We are trying to build a company that will outlive people like myself.”
“We are very happy to have clients who own 80ft boats and have done for 20 years – they are good clients and important for the future of the company. Not everybody can own a big boat and not everybody can be the broker for somebody owning a big boat. The top is very thin and not everybody moves up.”
The full interview with Peter Hürzeler will be featured in issue 187 of The Superyacht Report.
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