Martin Bellamy | Investing | Business

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Superyacht Business
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  DECEMBER 2014 | WWW.SUPERYACHTBUSINESS.NET 41 The interview Martin Bellamy Chairman & CEO | Salamanca Group The founder of Salamanca Group is convinced that greater financial regulation will hit the industry shortly and when it does his new venture OneOcean will be poised for action INTERVIEWED BY JULIET BENNING    P    h   o    t   o   :   M   a    d   e    l   e    i   n   e   F    i    t   z   s    i   m   o   n   s S alamanca Group’s chairman and CEO, Martin Bellamy, is in no doubt that greater regulation, and in particular, the financial services practice of ‘onboarding,’ will hit the superyacht industry within the next few years. “It will happen” Bellamy tells me with absolute conviction. “The industry is never going to get over its own problems if it doesn’t accept that regulation is going to be a big part of its future. I promise you, in five year’s time no-one is going to be able to charter a boat without understanding where the source of funds is from” he warns. Onboarding is a process that the financial sector has already been through and which traces the source of client funds, checking their legitimacy. “Over a period of time it’s these kinds of regulations that will make an industry like this raise its game. It will be a real shake up. It’s an irreversible trend so you might as well be aware of it and be prepared for it,” Bellamy tells me. I have met Bellamy on a dull London day in a charming French brasserie a stone’s throw from Salamanca Group’s Mayfair headquarters. Salamanca Group is a company name starting to be heard on the lips of industry players due to its substantial $100million investment in Barcelona’s Marina Port Vell, which having been overhauled, is set to become a serious contender as one of the world’s finest superyacht facilities. Moreover the Group is in discussions about making an investment into the marina’s neighbouring refit yard, MB92, and has created a transatlantic service collaboration with Rybovich in West Palm Beach. CAREER DETAILS w  Current role : Chairman and CEO of Salamanca Group. Bellamy founded the company in 2002 and is responsible for running the group and overseeing its continued development. w  Work experience : Previously Bellamy worked at WPP, a British multinational advertising and public relations company, and served in the British Army after training at Sandhurst. He has an MBA from Reading University and is a fellow of the Royal Geographical Society. In 1997, he rowed across the Atlantic Ocean. Martin Bellamy   Bellamy photographed near Salamanca Group’s Mayfair headquarters in London    TO THE POINT 42  WWW.SUPERYACHTBUSINESS.NET | DECEMBER 2014 The interview How have you found coming into the industry from an outsider’s point of view? I think the important thing is not to get too drawn in. My time is best spent working out strategically what direction OneOcean should go in. It’s for other people in time who are executives within the business to work within the industry but I think you need to challenge the status quo a bit. I’ve been to quite a few industry events, boatshows, and if you’re just going to try and slot in and do the rest as everyone else that’s not very productive for the industry. What kind of presence do you think OneOcean will have in the industry? I think we need to approach it from a slightly different direction and I think that to some extent OneOcean should be fairly well under the radar because if you’re going to speak with a very high profile client they probably want a business that’s relatively discreet that’s not going to wear bright colours and hold the biggest parties in the world. It needs to be different because if you do throw the biggest parties at any event one thing you won’t get are any clients going to it. You’ll get the industry going but you wont get any clients. OneOcean needs to be much more client focused. Are your clients coming from Salamanca Group? Our primary focus is on our own clients and working with those clients within the context of the industry. It’s not about stealing market share – this is about growing market share. Do you have any forecasts for the industry’s growth? There’s a lot of analysis out there. You need to take that analysis and put it in context. I think that OneOcean needs to run a robust business model because trends can change pretty quickly, especially in today’s economic climate. I don’t think anybody sat in 2008 would have projected the trend between 2010 to 2014 in terms of the growth in the upper end of the market. I think these things can reverse pretty quickly so I think you’ve got to find a business model that’s sustainable. What do you do with your spare time? I like keeping fit when I can. The truth of the matter is that I don’t have much spare time but one of the good things about that is that I enjoy what I do so much. I don’t do it as a lifestyle business Salamanca Group itself was founded in 2002 and has grown into a multinational company that covers investment and advisory, corporate risk services, business intelligence and investigations, as well as private client advisory. The acquisition of Marina Port Vell represented its first foray into the marine industry and the decision was made based upon the marina’s location and competitive price, “It’s an amazing asset in the middle of a city” Bellamy enthuses. “The real winning thing about buying it was that we bought it competitively but we didn’t need to build anything around it as it had the most amazing city surrounding it and the development of that part of Barcelona over the last four years has made it almost unrecognisable.” The group famously announced its grand ambition to transform the run down marina at the Monaco Yacht Show in 2011. Strong focus Ambition and tenacity clearly run strong through Bellamy’s blood. It’s these inclinations that appear to dictate the pace and flow of both his business and personal goals. Clearly well versed in delivering answers to interviewers, he maintains an unrelenting focus throughout our meeting. Though as polished and sharp in appearance as any city high roller one might meet, Bellamy also has the poise and immaculate manners of a true English gent. He admits he wasn’t academically minded at school, but excelled at sports and upon leaving went straight to the Royal Military Academy Sandhurst. The experience taught him invaluable leadership skills, which he refers back to regularly. “Sandhurst is great at getting you to understand the principals of leadership” he explains. “The first eight years of my career were really formative in terms of learning about what it takes to lead. [As an officer] you eat last and you get paid last. You get the accolades but if it goes badly it’s your fault. It can be a pretty lonely place when it’s not going so well. You should never expect somebody to do something you would not be prepared to do yourself. You’ve got to be able to communicate effectively. Other people have got to know what’s in your mind and what you’re trying to achieve.” After years of the rigorous institutional parameters of both school and the army, Bellamy was “itching” to do his own thing. But this was not before he had pulled yet more from his infinite personal well of fortitude by rowing unsupported across the Atlantic – a feat, which at 72 days, meant Bellamy and his rowing partner Mark Training at Sandhurst educated Bellamy in lifelong leadership skills  DECEMBER 2014 | WWW.SUPERYACHTBUSINESS.NET 43 Martin Bellamy Mortimer had seriously underestimated their nutritional needs. “One of the things I learned about myself was that I was pretty determined. We fished off the boat towards the end of the race because we ran out of food. Out of 30, about 20 boats finished the race. A lot called for help and got picked up.” Bellamy founded Salamanca Group in 2002 with current COO David Livingston, naming it after his old regiment and its namesake, the hard-pressed rowing boat. “All we had were determination and ignorance – our star qualities. Without experience we made tonnes of mistakes but were determined to make it work. Until you run your own business you just don’t realise how tough it can be. You eat live and breathe it. You’ll never work harder.” The pair’s single minded grit was eventually rewarded by various investors. “We were just not going to take no for an answer and eventually we managed to raise money. Our first initial success was a residential development investment in Poland. It raised about $ 15 million.”A retrospective approach to investment banking had become the example to which Salamanca Group was fashioned. “I admired the old merchant banking model – an era of bespoke closely held relationships. The Italian Renaissance banks made long-term, long distance investments. The biggest risk they faced was piracy.” Bellamy explains. Marina Port Vell represented the Salamanca Group’s first foray into the marine industry, which was a sector the company had previously overlooked, “We’d never done anything in the marine space. Why would you? Why on earth would we want to buy a marina?” Bellamy says. After unveiling the project at the Monaco Yacht Show in 2011, Salamanca Group encountered some initial resistance from the head of the Barcelona Port Authority. Bellamy makes the admission, “They were really annoyed. [The head of the Port Authority] said ‘Who said you could go to Monaco and say you were going to do this?’ But after he’d given me a ten-minute dressing down he came round and said it was a fantastic idea.” And not only has Salamanca Group redeveloped the entire marina, it has also been strongly involved in the lobbying towards favourable changes in the Spanish matriculation tax. “I don’t want to overstate our impact, but I think we have had one.” Bellamy tells me. The acquisition of the marina, considered by Salamanca Group to be a long-term investment, already appears to be paying off, with the company predicting that the asset has the potential to become one of the best superyacht destinations in the world. Welcome regulations But the ripples of Salamanca Group influence are widening within the superyacht industry and are helping to usher in a wind of change. At a press conference during the Monaco Yacht Show this year – the lead up to which had been paved with enigmatic invites revealing minimal information – Salamanca Group unveiled OneOcean, as well as revealing that the group would take a stake in both Rybovich and MB92. Bellamy updated  SB  at our meeting saying, “The srcinal idea was that Salamanca Group would buy a stake in Rybovich, but in the short term that’s more likely to be a collaboration, which suits us better.” The new venture, OneOcean, aims to become the pre-eminent provider of services and facilities to the upper end of the superyacht industry and a trusted advisor to yacht owners.“OneOcean was a concept idea which came about because we thought if we’re going to stay in the industry there’s no point sitting on a marina, you might as well do something that’s going to be a bit more proactive and interesting. There were a lot of people we’d spoken to who were saying how the industry might change over time.” At this point Bellamy acknowledges his status as something of an outsider, and comments: “Of course, we’re not in the industry and, as such, you can be accused of being ignorant and arrogant and everything else, which I’m sure we will be, but we also have the ability to look from the outside in which is quite an interesting perspective,” he says. “Our view was that it’s an amazing industry in that it deals with the most high value assets in the world, but it’s a very niche industry. I think there is a genuine wish within the industry to see it change and to see it but it’s a business where you have so many good people involved and so much enjoyment. Having a lunch like this is hardly hard work and you get to meet lots of great people and go to very interesting places. There are lots of challenges some of them good, some of them not so good. Bellamy hopes to encourage more UHNWI to invest in superyachts The new venture, OneOcean, aims to become the pre-eminent provider of services and facilities to the superyacht sector  44  WWW.SUPERYACHTBUSINESS.NET | DECEMBER 2014 The interview Martin Bellamy professionalise itself. One of the things that we have observed is that typically industries like this only change if there is either self-determined regulation or external regulation compliance of some description.”If at first it was hard to see quite how the OneOcean platform would make such progress for the industry, a grilling of Bellamy during a tender cruise of Port Hercule, lifted the fog as Bellamy explained, “If we could help the industry go from 3% to 4% or 5% penetration we’ve done our job. If those people coming in think this industry is starting to get serious, it’s starting to have greater compliance, greater regulation, transparency, greater corporate governance, then new clients can begin to think buying a yacht is now a decision I don’t  just take with my heart but also my head – my business mind can justify it.” Bellamy emphasised that new clients should feel that there is a predictable way into the market and a predictable way out, with an assured set of services along the way. “Hopefully OneOcean will be a market leader in terms of working with the owners and promoting a greater level of trust and transparency and also a long-term relationship.” Bellamy explained whilst clearing up any confusion about its role with the brokers. “We will work with the brokers and will advise clients closely on a non-transactional basis. If you’re advising a client you’ve got to be prepared to advise them on everything they do in the sector and sometimes out of it.”Asked about the levels of funding involved and strategic plans, Bellamy revealed that OneOcean and Marina Port Vell are long term investments. “A client advisory service is the best way to go. If you look at the growth of the fleet, owning some of the best marine facilities in the world has got to be an absolute no brainer. Owning some of the best service facilities in the world is exactly the same. I think it’s part of our responsibility to try and understand the market.” Get the business right Playing devil’s advocate I suggested that OneOcean, as a supporter of the greater regulation of funds coming into the industry, could become the source of resentment from brokers keen to make sales regardless of where the money has come from – could a major clean up operation stunt the number of individuals wishing to dabble in the market? Bellamy, though new to the industry, is already a champion for its future integrity, and drawing from his experience in the financial sector, is steadfast in his conviction that greater regulation is inevitable. “We want to set our company up to say we come from that background, we understand it, we subscribe to it. Actually the sooner greater regulation happens the better,” he explains.Back in London I ask what the reaction to OneOcean has been since the announcement at the Monaco show. “I think the news has been received extremely warmly,” Bellamy says. “We’ll get turbulence because I think that people will challenge it, but it’s one of those things where we passionately feel that the direction of travel is right. If we’re worried about what the industry thinks about us all of the time then we’ll just fall into the same trap that other people do. We’ve got to back ourselves to do the right thing. We’re not in a hurry to make this the biggest business in the world by tomorrow. We’ve got to do it step by step to get it right and we’ve got to be able to look at the business from a client point of view. We’ll be very reactive and very transparent. We’ll offer good advice and we won’t be conflicted. These are the things that owners want.”Having briefed me fully on Salamanca Group business and clearly disinclined to reveal much if anything of his personal life, Bellamy issues a polite apology before dashing off to his next meeting. Bellamy and teammate Mark Mortimer spent 72 days rowing across the AtlanticBellamy photographed in Monaco during the launch of OneOcean We’ve got to   be able to look at the business from a client point of view. We’ll be very reactive and very transparent
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