Sarnia Yachts introduces yacht management offering
By combining corporate services, crewing and management, Sarnia Yachts introduces a unique operations model…
It is perhaps a by-product of the way that the superyacht industry has naturally evolved, but the notion that corporate service provision, crewing and yacht management belong to fundamentally different sectors of the industry is now outdated.
Having established itself as a renowned corporate service provider and crew management business, Sarnia Yachts has now added yacht management to its arsenal in a move that sees all three services brought under a single umbrella, as well as managed on a single platform, thereby negating many of the inefficiencies associated with these most vital of services.
“Over the last 50 years Sarnia Yachts has built its reputation on ownership structures, corporate service provision and the fiscal management of superyachts,” starts Tim Joyce, Group CEO of Sarnia Yachts. “Our expert team can guide clients throughout all the necessary stages from concept and build through to delivery, export and continued management of the asset. Our involvement allows us to build a picture of what the owner requires from the yacht operationally, taking into consideration where their tax liabilities are, how they intend to use the vessel, what the VAT implications of this will be and, therefore, what corporate structure would be most suited.”
In recent years, driven by companies such as Sarnia Yachts, the superyacht market has moved away from rigid ownership and management models that have limited the structures’ ability to truly work in the best interest of the ultimate beneficial owner (UBO). And yet, at times, UBOs, especially those that are new to the industry, fall foul of poor advice on the part of ‘experts’. It is widely accepted that one of the key factors in ensuring a smooth ownership experience is the creation of an effective and professional owner’s team that works together and focuses on efficient service provision, not just profit through inflated costs.
Tim Joyce, Group CEO of Sarnia Yachts
“We have found that it is best to limit the number of third party involvements and operate with a smaller team that can handle the responsibilities of any given arrangement and deliver the whole picture without service creep, wastage and competition. Ownership should be a headache-free experience,” continues Joyce. “As a direct result of the inefficiencies we have witnessed in the market, in 2010 we officially launched our crew operation. We had been handling crewing requests for many years before as an ancillary part of our corporate service arrangement, but we added a standalone business to take it to the next level and, now, we have launched our yacht management business.”
By adding the yacht management business to the well established corporate and crew divisions, Sarnia Yachts has struck on a synergy between three inextricably linked, but often inefficient, core sectors of the superyacht market. By using a single platform to manage the three core sectors, Sarnia Yachts has managed to successfully negate a number of the headaches associated with these services when managed separately or ineffectually. Central to the development of this additional string to Sarnia Yachts’ bow has been the fact that it has been driven by client demand, not a blind desire for additional market share.
“Typically these three services would require three different communications chains and, as a result, create three opportunities for communications breakdown,” explains Joyce. “What we are offering is a single platform to manage all three, with a host of additional accounting and invoicing benefits to simplify the entire ownership experience. It is one point of contact attached to multiple services.”
Unlike some traditional management businesses, however, the Sarnia Yachts model is not an ‘all or nothing structure’. In a sense it is modular, from the creation of the initial ownership vehicle, Sarnia Yachts allows owners to pick and choose the services that they feel they require, which is particularly in keeping with the contemporary yachting zeitgeist where owners have far greater access to knowledge and information and, therefore, feel less reliant on third parties to handle all the related affairs of yacht ownership. That being said, Sarnia Yachts’ model does provide the full suite of services should they be required.
“We are approaching management in a new direction. On the one hand, management is a requirement for our corporate business from the perspective of responsibility. As directors of an ownership vehicle, it is our responsibility to act on behalf of the owner in a responsible manner, whether that relates to corporate administration, crewing or management,” continues Joyce. “It is by no means mandatory for the client to use us for crewing or yacht management services, that is not our objective, we are just offering owners with the full scope of bespoke services to create a model suitable for them. Our yacht management services satisfy our responsibilities as directors of a company and also provides standalone services for the client. Because of our integrated platform, tasks can be done once but be visible across multiple outputs, saving both time and cost for the owner.”
By way of example, when one considers the financial administration that is required of yacht managers, such as budgeting, expense payments and so on, it can become very expensive on the corporate side when the two sectors are separate. Work is often duplicated at a significant cost to the UBO to ensure both enterprises are doing their due diligence.
“With our corporate hat on, we have to prepare detailed financial statements for each of the yacht owning companies we administer. Where that company is a commercial VAT registered business, say in Malta, we have to submit VAT returns and undergo an annual financial audit to produce audited financial statements. This requires extensive and detailed bookkeeping and accounting. When we receive financial reports from yacht managers, more often than not we have to manually duplicate their accounting work within the yacht owning company. Clients often comment on how expensive it can be, and it is expensive,” comments Joyce. “However, when we undertake the financial reporting and payments as the yacht manager, the transactions are input once into our platform, which automatically undertakes the corporate book-keeping element, removing this duplication. “In essence, corporate bookkeeping is being done by the manager.”
Hans Bouman, Head of Yacht Management at Sarnia Yachts
The notion that superyacht clients are not fee conscious is, at the very least, outdated, if not insulting to those individuals that the entire industry relies on. Superyacht owners are indeed no strangers to spending large sums of money, however, they are acutely aware of the value that they receive from a particular product or service. As the superyacht industry has continued to evolve and professionalise the interlinked notions of value and efficiency are going to become increasingly important and those companies that meet such requirements will be those that succeed.
“I like our new model because it is a completely fresh approach. With the business being closely related to the corporate structuring side of the business, rather than being tied to the toing and froing of brokerage or charter elements of a business, we are clear to focus on the service itself. What I have experienced in the industry is that there is an underestimation in terms of the importance of the owning entity that sits in between the yacht and the beneficial owner. By bringing management and ownership structures together, the hierarchy and communications chains are clarified and the processes become far more efficient,” explains Hans Bouman, Head of Yacht Management at Sarnia Yachts.
As the superyacht market continues to mature and owners generate a far greater understanding of its complexities and how they relate to their own requirements, the rigid ownership models of years gone by simply do not provide the flexibility of service, unhindered by ancillary interests, that contemporary ownership requires. By amalgamating yacht management services with crewing and corporate services, Sarnia Yachts has created a flexible model that perfectly suits owners today.
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