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  1. Wealth
April 26, 2016

Hedgehog Issue 49: French police vs bankers & Mayfair’s DNA

By Spear's

Hedgehog unearths juicy tidbits – from the depths of the Black Forest to the heights of London’s bark-inspired balconies.

Suspicious minds

We know bankers are unpopular, but since when were private bankers arriving from abroad regarded as a major risk? The answer is for about a year, as far as the French authorities are concerned.

One private banker based in Luxembourg has clients in all the neighbouring European countries, but when he travels across the border to France he is liable to be stopped and searched. Indeed, France is the only country neighbouring Luxembourg that adopts such a hostile and suspicious posture towards private bankers. Hedgehog’s source says four of his colleagues were effectively kidnapped by French police last year and had to be bailed out by their employers.

Now, when he travels across the border to France, he has to remember not to carry any materials or documents with him, as they might be confiscated. Also, he runs the risk that his mobile phone might be taken away and its stored contents downloaded for spurious security reasons — or are the French authorities looking for information about potential tax evaders?

The instructions from his bank’s head of compliance are simple: keep the phone switched off when crossing the border, and if asked to switch it on enter the four-digit security password incorrectly three times so as to blow up any evidence. Better still, he has taken the precaution of registering as a private banker in France with the French regulator. This apparently gives him a free pass.

Mayfair’s magic

Mayfair’s position as London’s wealth hive remains robust but not guaranteed.

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Recently Hedgehog attended a meeting of minds from across the global wealth microcosm that lies between Piccadilly and Park Lane. British Land hosted a panel discussion following the publication of its guide The Essence of Mayfair, aiming to determine exactly what that essence is. Inside the lavish Spencer House, James Taylor, director of British Land, spoke about its new development ‘Clarges Mayfair’, a new-build block of 34 apartments, and how the bark of trees in Green Park had inspired the ‘DNA’ of the building.

Whether bark-inspired balconies are enough to become part of Mayfair’s own unique DNA remains to be seen, but such attempts to blend in are clearly being taken seriously. Taylor was joined by shoe designer Rupert Sanderson, who complimented the ‘oxygen’ the area gives to smaller, bespoke craftsmen despite the ever looming threat from mainstream fashion houses. This was a sentiment echoed by the former head cutter at Gieves & Hawkes, Kathryn Sargent, who now runs her own bespoke tailors. Sargent mentioned the 65 apprentices working on Savile Row, but what is perhaps more indicative of the area’s power of attraction when it comes to tailoring is the commission she recently undertook: 25 coronation uniforms for the King of Tonga.

Another King — Jeremy, co-founder of Corbin & King and proprietor of such establishments as the Wolseley and the Beaumont Hotel — spoke of how Mayfair had ‘reversed a trend’, having ‘lost that feeling of being a village or town’. This was something he credited to the family-owned estates that still manage so much of the region. However, he did point to the elephant in the room: the bulldozing of Cork Street’s galleries. This point was, perhaps surprisingly, countered by the Royal Academy’s chief executive, Charles Saumarez Smith (see page 16), who remained ‘reasonably optimistic — the art market will remain anchored in Mayfair’.

On summing up, the panel (pictured below) was offered the chance to encapsulate London’s wealth hinterland in one word or phrase. ‘Craftsmanship’, ‘distinction’, ‘stability’, ‘rich and mixed’, and ‘the high end of the monopoly board’, provided a bullish conclusion. Enjoying a glass of champagne outside the room was leading Mayfair property agent Peter Wetherell, who predicted Mayfair’s return to the number one property spot this year, usurping Knightsbridge, ‘We’re within a whisker of regaining that crown,’ he said — a theme he elaborates on in his Index profile.

However, words of caution remain, not least on what that value is really founded on.
‘You have to go through the process of safeguarding history, but also creating new history,’ said Jeremy King. ‘Unless there’s a vision we won’t have a Mayfair of all the idiosyncrasies, we’ll just have hedge-fund offices.’ That’s a dismal prospect that even this sartorial hedgie can agree on.

When letters help numbers

Thomas Archer and William Parry (both of whose fathers feature in the Spear’s 500) had some fairly rum adventures — Tom dabbled in mining in Sierra Leone, while Will flirted with rare pheasant breeding and pressing apples — before alighting on the idea for their short-term letting agency, the London Residents Club.

‘About a year ago,’ says Archer, ‘we travelled to Hong Kong equipped with some gold-leaf business cards, high hopes, and not much else. Why wouldn’t the expatriate market want to sign up immediately to our all-inclusive property management club?

‘After talking to the right people we realised that our flawless business model might need some adjustments. Back in London we focused instead solely on a short-term letting service. We quickly found that our clients could increase their traditional rental yields while still having the flexibility of staying in their properties from time to time. A year later we have three full-time employees, an office off the Kings Road and many happy clients.’

The London Residents Club has found that one-bedroom apartments don’t rent out so readily as short-term lets, whereas two- to three-bedroom apartments are an easy sell.
In some instances, Archer and Parry have found clients are able to realise twice as much per month as they were able to obtain from a long-term tenant.

The club currently has 21 UK (mainly London) properties on its books, as well as a couple in Spain and South Africa. Their rental customers (or guests, as they prefer to call them) are mostly international, although there are some British expats coming to London from Hong Kong and some UK residents who are taking a break from the countryside. Otherwise, the profile includes French, Italians, Americans, and a smattering of Asians.

The business model has proved appealing to two different categories of property owner who have only been getting a 2 or 3 per cent yield on their investment from long-term tenants, and to those who have spare properties and would like to obtain some revenue from them while still having use of them from time to time. It may not be a club in the strictest sense — there are no membership fees or rules — but it offers low-key concierge services for both clients and guests.

‘I think the most interesting thing we have discovered,’ says Archer, ‘is that many of our clients have given us their properties for the year instead of signing on a yearly tenant, as we have been able to achieve a much higher yield while looking after their properties as if they were our own.’

Good things come in threes

In 1683, from the depths of the Black Forest, new sounds are heard: the roar of flames and the hammering of molten metal. The age of industrial craftsmanship arrives with the strike of a hammer and German engineering is born.

In 2016 Gaggenau is marking its 333rd anniversary across the globe, honouring the brand’s rich heritage and natural evolution since its founding year. In a process that has seen the emergence of the original forge, the production of 250,000 Badenia bicycles, and the introduction of the combi-steam oven to the private kitchen, Gaggenau imagined what could be — and then built it. It is now the leading brand of built-in professional-grade domestic appliances.

‘It is extraordinary to think that Gaggenau has been 333 years in the making, but that our brand values have remained unchanged since 1683,’ says Sven Schnee, the company’s head of global brand. ‘The ongoing quest for authenticity and uncompromising quality has shaped the Gaggenau identity so heavily that our heritage is an essential part of our DNA today. That’s why we are using this anniversary to celebrate the past, the present and the future simultaneously, and we are excited to be able to launch a new icon that symbolises this, a piece of modern, innovative design that showcases traditional and timeless craftsmanship.’

Every piece that leaves Gaggenau’s factory is weighted with a 333-year reputation. Design has been integrated into its process ever since the 1890s. Defining tomorrow is never easy, but that is the path Gaggenau has chosen, while it is determined to remain authentic, uncompromising, and extraordinary. Gaggenau is evolving the kitchen and the difference is going to be amazing. The brand is present in more than 50 countries with flagship showrooms in major cities around the world, with market adding a local flavour
to their celebrations. The reinvented UK flagship showroom is due to open in April, just in time to take part in the global festivities.

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