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November 4, 2011

The Hedgehog Issue 23

By Spear's

The Hedgehog is proud to introduce Spear’s Credit Ratings Agency Programme (SCRAP) designed to tell you what’s good as gold for your money and which ideas are going down like lead balloons

Tax Me Harder

Amid the recent clamour of the American and European wealthy to be taxed more, one country’s billionaires have remained resolutely silent on the subject: Britain’s.
Warren Buffett wrote in The New York Times: ‘My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.’ L’Oréal heiress Liliane Bettencourt, meanwhile, signed a public letter asking for an extra 3 per cent tax for those earning above €500,000.

But a quick survey of the CEOs of Britain’s leading private banks has produced no evidence that Britons will be writing cheques to HMRC any time soon. One said that he thought this was because French and American taxes were a lot lower than British (Buffett said he paid 17.4 per cent). Another said that none of his clients had expressed any such sentiment, with an added exclamation mark.
Hedgehog’s feeling is that the wealthy who are calling for extra taxes already have much-reduced taxes: if your lawyers and accountants have lowered your bill beyond what you would normally pay, then why should you mind paying a little more if it still doesn’t take you to that level?

Zago, Zagas, Zagat

Just as the Wolseley has become London’s most popular restaurant, according to the new 2012 London restaurant survey from Zagat, so Tim and Nina Zagat must be feeling a surge of popularity after Google agreed to buy their company in September.

In London to launch the survey, in which the Ledbury (winner of a Spear’s award) retains its ‘top food’ title, the Zagats are far from reticent about Google’s recent purchase of their life’s work. Although the sum was undisclosed and Tim Zagat is hesitant to predict (or reveal) Google’s plans, he ascribes the attractiveness of the deal to Zagat’s trusted brand and authoritative digital content. (Nina can only slip in brief interjections throughout our conversation.)

‘What we’re doing is creating digital content,’ he says, large and lordly in a comfortable armchair in their suite at the Connaught, ‘and fifteen years ago I’d never heard of digital content. It’s changing all the time and I suspect we’re going to change more now that we have a technologically strong partner.’ Google’s ‘fantastic bandwith’ of resources will enhance Zagat’s online position, and Zagat’s detailed local knowledge will help Google.

Technology plays a much greater role in Zagat’s surveys these days — online ratings, digital production ­— but also in food more broadly. Nathan Myhrvold, author of the five-volume bible for technological gourmets, Modernist Cuisine, invited the Zagats to Seattle for a 30-course meal. ‘It was a little overdone,’ Tim concedes, but he sees the place of the centrifuge in cooking.

Tim Zagat has sharp words for some of Britain’s overextended celebrity chefs. ‘There are a lot of chefs who are spreading themselves too thinly. Some of them have had terrible economic problems as a result. There’s plenty of room to question some of these television celebrity chefs in terms of both are they really cooking any more for anybody, and are they really as good as their TV image?’

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Perhaps coincidentally, Gordon Ramsay at 68 Royal Hospital Road, part of his troubled collection of restaurants, slipped to second most popular restaurant for 2012 and to eighth from second for top food.

The deification of chefs is not an entirely bad thing, he says. Thirty years ago (when ‘English food was definitionally bad’), ‘Chefs were foreigners who had hot, dirty jobs in the kitchen. The culinary schools and television have made the chef into a respected professional.’

But the survey shows that 73 per cent of reviewers are dissatisfied with service in London. ‘The front of the house has no such training [as chefs get] and nobody wants to be a waiter. Look at who does the waiting in most of the restaurants in London — they’re not English for the most part.’

There is dissatisfaction with service in nearly every city they cover to varying degrees, he says, which makes you wonder if we don’t expect too much. The Zagats dance around this question, but when pressed there is a curt no from Nina.

And have they eaten in Google’s fabled (within the corporate world anyway) canteens? An instant enthusiastic yes from both. ‘We ate at one yesterday,’ Nina starts before Tim breaks in. ‘Yesterday we ate here [at Google’s British headquarters in Victoria] and I gave them for an in-house canteen a 28 for their food.’

He’s just saying that because they have bought them! ‘Wait a minute. Compared to outside, I gave them a 22 or 21. I gave them two ratings.’
 Kazakh-A Your Face

It’s been ten years since Jim O’Neill coined the Brics, but Spear’s still can’t shake the feeling that a crucial letter is lacking. As we started work on the Asia special, we thought we’d found the answer: could Kazakhstan, the most economically and politically dominant country in central Asia, be the missing K?

The vast country is rich in natural resources and home to the world’s largest oil-field discovery in twenty years. It averaged ten per cent growth in the eight years leading to the global recession, is set to grow by around six per cent this year, and has Russia and China, two raw-material-hungry superpowers, vying for its affection.

In the interest of solid investigation and a well-spelled acronym, we set about trying to find out more about Kazakhstan’s economic prospects. We called up several young Kazakhstani bankers, who spoke confidently, intelligently and frankly about their hopes and fears for the future, but something strange happened when we tried to speak to experts in the UK and US. Emails went unanswered, phone calls unreturned, and the analysts we did manage to track down assured us that there was no way that they would be free, even for ten minutes, at any time in the next six weeks, to talk to us.

‘I’m sorry, I’m at home, I really can’t speak right now,’ one flustered think-tanker said before hanging up on the Hedgehog, who had dialled her office.

Days of enquiries turned into weeks, and we managed to arrange an interview with one emerging-markets analyst at a bank and one researcher at a think-tank who, by their own admission, hadn’t been working on Kazakhstan for a while and therefore couldn’t comment on recent events.

This communications shutdown is deeply unsettling. We are no more certain now whether Kazakhstan is the special K needed to complete the Brics and put Central Asia on the investment map or if, despite these positive economic indicators, the country is a dark and ominous K-hole waiting to take effect.

What we do know is that, given the country’s natural riches, a global economic recovery will almost certainly usher in a new wave of foreign investment in Kazakhstan. With so much secrecy surrounding the country’s economy, we hope they proceed cautiously.
Without Boundaries

A recent survey showed that members of the public can’t tell the difference between a fine Bordeaux and wines that taste like paint-stripper. (It was reported in the Daily Mail, so it must be true.) Château Boundary, the wine club launched by Terence Conran and Peter Prescott as a bibulous addendum (bibendum?) to their new Boundary hotel and restaurant in Shoreditch, refutes this with its carefully curated tastings, talks and dinners for the passionate oenophile.

But so popular are those events that a new club — a club within a club — has been launched. Château Boundary En Primeur follows the wine futures principle by allowing members to get their hands on some vintage events and offers first. Lifetime membership is £250 for individuals, £400 for businesses (up to ten named members), and, like those wines in their barrels, the price will only increase each year. Benefits include a discount on event tickets, advanced booking and money off the online wine store and the Conran Shop.

Also included is a sommelier service, where Boundary’s most knowledgeable wine waiters will be able to advise you on what exactly goes with the lobster mousse you’re serving on Friday night and how much you may need for the thirstier side of the family.

Peter Prescott, who planted the vines which have brought forth Château Boundary, says: ‘Château Boundary has been a phenomenal success for us and it keeps on growing. The club activities, especially the new online wine shop and the wine gift box business, have also allowed us to invest in the Boundary Restaurant cellar, which I now think rivals the best in London.

‘The restaurant diners have also noticed these changes and we now get some serious wine buffs joining us for dinner. One table recently spent £3,000 on wine and only £300 on the food.’ Hic!
Tres Bon

We are, we understand, to be treated to every one of Larry Gagosian’s eleven worldwide galleries (or stores, as one of our contributors declared with Freudian slippage) hosting Damien Hirst’s spot paintings simultaneously next January.

At the other end of the scale, doing something new and thoughtful and even a bit daring, is Bonhams, which is launching its Contemporary department. Because Bonhams has been around since 1793, you might argue that it’s been selling Contemporary work since before the Pre-Raphaelites, but now it’s creating a whole new department for new work.

Why enter into an already fiercely fought-over field now? Sotheby’s, Christie’s and Phillips have carved up Contemporary with their sleek parties and sleeker salesmen, and if the top pieces are still selling, middle-ranking Contemporary work has not held its value since the credit crunch. Anthony McNerney, the head of the department, says: ‘It was about finding the right time and the right people to do it properly. I was given a blank sheet of paper to start afresh.’ He emphasises that sellers as well as buyers will receive his full attention, which is not necessarily true at every house. He also says that greater competition can only benefit the market.

Rather than unwieldy, unrelated sales, ‘We’ll concentrate on small sales that we know will sell, almost a curated sale; we want works of art that sit well together.’ The first evening sale in October has as its star lot Alighiero Boetti’s 1984 (estimate £1.2-1.8 million), twelve panels of 192 pencil-drawn magazine covers from 1984. At that price, Arte Povera might have to be renamed.
Bigger Emperors

When Spear’s last met Elizabeth Sieff of the M&S clan and Rebecca Masri (ex-Goldmans), they had just launched Little Emperors, the card which provides discounts at London’s finest restaurants, shops and spas. It was the pit of the recession: ‘Elizabeth thought that her card would be beneficial both to bonus-strapped consumers suffering luxury withdrawal and businesses feeling the pinch of recession-era over-capacity,’ we wrote.

So two years later, what’s the state of the Emperors’ new clothes? ‘The last few months have demonstrated that the markets are incredibly volatile,’ Elizabeth says, ‘and people are being much more sensible with their pennies.’ Corporate customers who can no longer get good rates directly from hotels around the world can still get them through Little Emperors, via a new LE Travel Card (more of a passport).

Technology is a new strand, too: a smartphone app now geolocates you and tells you where the nearest place that accepts your Little Emperors card is. If you activate it in Mayfair, the map will be covered in dots.

In an act of imperial generosity, Elizabeth is offering to waive the joining fee to Spear’s readers. (Annual membership starts at £150.) Email or call 020 3178 4984 and quote ‘Spear’s’.
The Colour Purple

Maternity presents professional women with unenviable career choices: they can return to their desks as soon as possible; try to fit a week’s work into a half a week’s presence; or insert the lacuna marked ‘Motherhood’ into their CV.

But what about a constructive middle path through post-parturition? Gina Miller, philanthropist, mother of three and wife of Alan Miller, has developed Purple Pages, an online network to connect charities which need a raft of services (including event management, marketing and legal, accountancy or consultancy work) with these women, which launches in November. A range of tasks can be undertaken, and while the women cannot sign off on paperwork, for example, they can make it ready for someone else to.

Over lunch, Gina spoke about how frustrating it could be for women who were stuck at home while their professional skills and even mental poise went to waste: ‘Being a good mother does not mean having no other interest but your children. Purple Pages offers mothers who have a raft of professional skills and acumen an opportunity to think about your career in a different context that is flexible, fulfilling and creates a win-win situation for all involved.’

The website, which might almost seem like a dating agency for charities (‘Hospice WLTM lawyer with skill in briefs’), will allow women to remain practised at their vocation and perform a pro bono service for a needy organisation. That deserves some purple prose.

NFI. Until Now

If flying commercial, even first class has its pains. Heathrow, in an effort to smooth out those few remaining wrinkles, are making available to everyone else what was previously kept for the royal family, popes, presidents and the sleekest of diplomats. Heathrow By Invitation (£1500 plus VAT for up to six people for one departure or arrival) is the smoothest face of flying. So discreet is this service, in fact, that Spear’s is the first to review it.

My chauffeur dropped me at an unmarked white door at Terminal 5, a private entrance to the airport, where I was greeted by Alex, a VIP manager. My Louis Vuitton was spirited away. Under the bulletproof glass ceiling of a private hall, twelve staff were waiting. My passport vanished to be checked and my security screening took place in a dedicated area, away from other passengers. Forget Fast Track — this is God’s Track.

There are 23 private lounges — the largest fits twenty people. The food isn’t quite as varied as in the larger public lounges, but it’s a civilised place to rest, catch up on work or use one of their iPads to play Angry Birds until your flight. The service from my VIP host was super-attentive, with a smile as wide as an aeroplane wing.

As I was revelling in the smug factor of bypassing the main terminals, I was asked whether I’d like to board first or last — the ultimate smug-inducer. All too soon, I was sped away in a convoy of BMW 7 series — complete with flashing roof lights — to the steps of the plane. I didn’t even see another passenger until I was in the aircraft.

HBI works with a small number of the travelling elite — around 30 parties a day, and it’s available with most major airlines. It’s not for those who like the buzz of travelling, but the limo-to-plane service and private lounges make it a notch above any other VIP service. Caroline Phillips

For Richer, For Richer

With almost half of UK marriages ending in divorce, it’s time to acknowledge that when it comes to the promise to love, honour and obey till death do us part, terms and conditions apply.

Prolegal, the new entrant to the private-client legal market we wrote about in Spear’s 21, has now partnered with legal insurers ARAG to offer clients divorce insurance. While Mishcon de Reya also offers prenuptial agreement insurance, Prolegal is the first UK law firm with an insurance package that covers the cost of mediation and divorce litigation as well. For £600 a year, clients can be insured for costs up to £100,000. Both same-sex and heterosexual couples can take out the policy.

‘People say to me that this is a cynical product,’ says Jonathan West, head of family at Prolegal, ‘but I don’t accept that. We take out insurance on all sorts of things we don’t want to happen. Take life insurance, for instance.’

Prolegal has already had ‘a lot of interest’ in the product, and West believes that with prenups becoming more popular, demand for divorce insurance will become more widespread. ‘We believe that over the course of the next few years, around half of those taking out prenuptial agreements will also take out an insurance policy,’ West argues.

But, for the time being at least, Prolegal doesn’t intend to follow the lead of American insurer SafeGuard, which will pay out a bonus to couples who have been together for more than 25 years.
Illustration by George Leigh

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