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Read the headlines about sanctioned superyachts and you might think the ownership of such vessels is dominated by Russian billionaires with close links to the Kremlin. But the truth is that, while most superyacht owners are rich, most are nothing like billionaires. Nor are they necessarily Russians, let alone oligarchs loyal to President Vladimir Putin.
As our charts below show, Russian owners account for only 9 per cent of the global fleet of 1,957 boats of 40 metres or more in length, according to data from SuperYacht Times, an Amsterdam-based research group. That is way behind Americans on 24 per cent.
Admittedly, among the largest boats — those 80 metres and longer — the Russian-owned share is 20 per cent. But there are only 153 such vessels in the world. They may make a big splash, both in the water and the media, but this category represents just 8 per cent of the 40 metre-plus global fleet.
Define superyacht more broadly — starting at 24 metres, like Boat International, another research group — and you reach a global total of more than 11,000 boats, half of them owned by Americans. As one observer says: “The whole industry is held up by buyers in the 24-50 metre range. These are not oligarchs; they’re just people, generally Americans, who have done very well in business.” The most expensive yachts, costing $500mn-plus, are generally affordable only for Saudi royals and other billionaires, but a second-hand entry-level vessel of 40 metres can be had for $5mn.
Of course, this is not the whole story. For boat yards specialising in the top end of this rarefied market, sanctions have come like a bucket of dirty water on a pristine deck.
Boat International says Russian buyers finance about €3.9bn of a global order book of €35bn-€40bn, but the cash is not evenly spread. Italy is building the most superyacht projects for Russian clients, with 60 projects, followed by the Netherlands and Turkey. Yards elsewhere are much less involved in the Russian market.
Sanctions have also worried others dealing with Russian owners: brokers who buy and resell boats; charterers who hire out vessels; and the multitude of staff needed to keep these floating palaces in good order. Know-your-customer rules are much tighter, including for yachts held via tax havens such as the British Virgin Islands. “It’s not good enough to know that it’s owned by a BVI company — you have to know the people,” says Michael Howorth, a yacht industry commentator and former superyacht captain.
But brokers insist sanctions are having little impact beyond Russian owners and their networks. Overall, the industry is in rude health with record order books, boosted by buyers looking for Covid-safe holiday space.
Contrary to popular belief, superyachts are not an easy place to conceal illicit wealth. As the past few months have shown, their movements can be tracked by nerdy amateurs with laptops and apps. Once spotted, they are as inconspicuous as a row of Rolls-Royces. A country estate or a seaside villa with high fences is far more discreet. It is much easier — and cheaper — to hide money by buying a stack of Picassos or gold bars.
Rich people don’t generally buy superyachts to keep quiet about their wealth, but to flaunt it. It is — and is likely to remain — the ultimate form of conspicuous consumption.
Stefan Wagstyl is the editor of FT Wealth and FT Money. Follow Stefan on Twitter @stefanwagstyl
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment