FTwealth

THINKING AHEAD HOW ’S OLIGARCHS ARE PLANNING TO REBUILD THE NATION

BY YURI BENDER

“Big business has been given a huge chance to participate in the building of a new country”

VICTOR PINCHUK

FORMULA ONE SAO PAULO ART FORGERS YOUTUBE MILLIONAIRES ALFA ROMEO 4C

WWW.FT.COMWEALTH SPRING 2014

FT WEALTH SPRING 2014 BIG BUSINESS HASA HUGE“ CH“ANCE TO HELP BUILDA NEW UKRAINE

COVER PHOTOGRAPH Your wealth of ideas BY ROSS MCDONNELL

Special reports editor Michael Skapinker Head of editorial content Hugo Greenhalgh Production editor George Kyriakos Art director Sheila Jack Picture editor Michael Crabtree Sub-editor Philip Parrish Global sales director Dominic Good Advertising Mariam Lolavar Publishing systems manager Andrea Frias-Andrade Advertising production Daniel Lesar

CONTRIBUTORS Dalya Alberge is a freelance arts journalist Helen Barrett is an FT commissioning editor for special reports Daniel Ben-Ami is an author and journalist Yuri Bender is editor in chief of Professional Wealth Management, an FT Group publication It is time for a change. As we move deeper into 2014, is FT Wealth Liz Bolshaw is a freelance journalist addressing the areas you want us to cover? Is there enough investment Jeremy Hazlehurst is a freelance journalist content? Or should we be looking closer at philanthropy? Are there Rohit Jaggi is the FT’s aircraft, car and markets or countries around the world that deserve analysis? These are motorcycle columnist James Mackintosh is the FT’s investment editor all questions we would like you to answer. Sarah Murray is a regular FT contributor The mix is working at present: this edition covers issues from art to Feargus O’Sullivan is freelance journalist Ukraine, and from investments to philanthropy. For our cover story, Samantha Pearson is the FT’s Brazil Yuri Bender travelled extensively throughout Ukraine to gain a clearer correspondent picture of the involvement of the country’s oligarchs in business and Matthew Vincent is the FT’s personal finance editor politics. With the country still in flux, what role will they play in Ben Woodhouse is a freelance journalist building Ukraine’s relations with both Europe and Russia? Away from the turmoil, millionaires, as Feargus O’Sullivan discovers, are getting younger and younger. But in his piece looking at YouTube entrepreneurs, he reveals that while the medium might have changed, the amount of hard graft needed to achieve success remains the same. It might look easy, but, as he writes, these kids really put in the hours. But for the next issue, we’d like you to tell us which subjects to cover. So please send your ideas and suggestions to the address below.

Hugo Greenhalgh, Editor YOUR NEXT [email protected] FT WEALTH Follow us on Twitter @FTReports June 27 2014

4 FT.COMWEALTH PHOTOS: CHARLIE BIBBY; JAMES OATWAY; AP/WARNER BROS CO 22 28 10 16 6 8 u h r aigsrosmoney serious making are who but world online the outside unknown new a Yo opportunities political and business new sensing fakes worthless be to found kan,tecountr the Ukraine, In a by sold works after world art the gripped es fbetr of sense A the all out pull to need especially teams smaller mone the prize in millions worth be can In a eiul aaeone damage seriously can advisers professional with Disputes the for Ja VIDE REVOLUTIONAR RFLDODGERS ARTFUL UNDERDOG H IHCOLUMN RICH THE IDE THE FEA OP ligsfr:Rohit safari: Flying 4C Romeo Alfa the Hu www analysis latest the with Pr bush African the VIDEO VIDEO INDICES FT mes Tb n t iasaeproducing are rivals its and uTube h aeo h piig in uprisings the of wake the Fo c hc:fiewn,cr n art, and cars wine, fine check: ice NTENTS gg O ml n,weemilliseconds where One, rmula EN n h rud Rohit ground: the ing ge Ma hy WE IDOLS AS TU ner Ne eo uls brokers bullish of pe .ft knohugsu o ofall to not us urges ckintosh COLUMN at IN w S .c o of ion Yo AL UP ay RES st om p osucceed to ops kgleywere gallery rk ladssiinhas suspicion and al Y GS TO FO y’ st TH Ja lgrh are oligarchs s SPEED RC r largely ars /we gg ES isotinto out flies i ’s wealth ON al Ja gg th drives i LI y, NE 6 16 40 46 36 50 48 56 42 44 58 54 52 54 RT To the hunting Th people young unemployed to skills Th Ma billionaire anti-capitalist an Pe uho nara safari aerial an on bush African southern the Discovering Rohit Th proper residential its to answer an seeks Cornwall Are We PLANNING PHILANTHROPY PHILANTHROPY THE LIFE CA BO PLANNING INVE INVE EQ IN tt dd itcnlg companies biotechnology e technology e eaeo mrc’ a resisters tax America’s on debate e R UITIES R lhmngr ehn their rethink managers alth OKS igagraceful a king 58 rSodlni unusual is Stordalen er st ST BU ST ST SI REVIEW In Ru rfn aaesadigbreed? dying a managers fund ar Ja YLE ternational MENT MENT SINE gg pr,chief ppert, GHT rvsteAf oe 4C Romeo Alfa the drives i ke SS st immortality to ys st GURU r-p teaching art-ups ty ex conundrum ex tfo donating from it ctv of ecutive FT .C ev OM nfor en st rat W egy EA LT H 5 6 T Fo t it-etpos sixth-best its producing after year this highs new seems the and up film, sum the to see to kids the took I in over and over playing h otof sort the at bonds, european year. last terms price at va offerings to rushed bankers as whatsapp. of purchase $19bn the alone let biotech smaller the among real the misses that burst, and bubble the since time any than bubble. dotcom the all are shopping online and media social sector, biotechnology the before countr seen last levels to back fell and Ukraine, in rnc–ntol for only not – ironic beg investors from floats of flood priv by takeovers, very u lofrinvestors. for also but netr righr obreak to hard trying investors been by has misled he how understand to led is from emanating the follow blindly investors ty the by down laid instructions the but buyers. sellers for for terrible great are IPos of lots and ma ja co th |f ra utos susual, as luations: present. es ntal,shrug initially, least th th th expensive me a enbidyfollowing blindly been had emmet nt t. ex is e hm rc sdeliber is track theme e co Lo mes y’ at pensive Us aw bailout. s e qiyhouses. equity e dbsns,js ss many so as just business, rd aw ck m/ lu Ma ex va smns a ennoticed been has esomeness rg st ay mlfidby emplified va utosls enduring seen last luations wealth c mark ock st st id at aigavnaeo high of advantage taking , st aw is “everything head. to hard and catchy incredibly annoying. Lego of track theme he st utospto tech on put luations rbidr.real-life builders. er csabound. ocks c mark ock the ev wa csi h & 500 s&P the in ocks tw sm”hsbeen has esome” mn in et nGekyields Greek en Mo rpromnein performance ar th eas lsre.orhero our street. ll st t w supply. own its s st et Le ge r fteyear the of art ge ogdemand rong hi ge et r r more are ere vie nta public initial t go go u fone of out t my to f problems off d It th a e several set has hrprices gher et Fa sincredibly is eoemmet hero g activity -go salso is st eyneatly very s hy at r a a was ere idsince mind cebook’s cs– ocks the tracting at pe aw ely th The ay sh ev il from ’s e hntyn to trying when h ubeyas hnthe when years, bubble the is this price/earnings forward the street, returns. forecasting short- measures the term useful how test to bother few that is advantage secondary in a dotcoms 2000. of madness the – time all big the includes period comparison their that cheap. remain of end the to year the world and dividends, including year, last Us time. harder a have pushing perma-bulls the bu uuereturns. future about information useful little p/e forward the enough, with were compared shares cheap If not decade. a of part best the for money lost subsequently investors times 25 reached the on: hang but priced. fairly are crow, analysts stocks, 1986. oeu with up come to enough tight not is connection the but lower. be to tend returns high, is it if years; few next the over higher be to tend returns years, few past the with compared low is p/e forward the if use: some have to seem does st the down and brokerage the of out bolted have we already – should worried be just not should we reet. tr ihtepeerdto fthe of tool preferred the with start th as hrsjme oeta third a than more jumped shares rat hy rkr aeahnyadvantage handy a have brokers e fta a o bad not was that if cu st oo t w has own its on io ge csrtre ure in quarter a returned ocks rnl ago its on bang rrently st ubein bubble th ex pe ty ja ei,oln hpigadpyet,adeeti carmaker electric ex and payments, and shopping online media, ubesest egoigin growing be to seems bubble A ex ial sdaein are used pically li that plain anavnaeis advantage main e esv,s eebrteavc to advice the remember so pensive, etderig and earnings pected me Us Fe It bruar av s hrsof shares st Ma rg includes erage Us ocks av sthinking… is ev c 2000, rch rg since erage y, nafter en mark both at rat them et io: bu ar Hi “ gH e t st csta a elgrowth tell can that ocks gr nO rpr er ta ke ea t rfiseryi ube then bubble, a in early profits fO t are sug all moment, the at for decent base a provide can and right being they brokers, unlike but brokers. unlike year, next up come to decade, past the in earnings looks who corpor of looks which from come results ahead. similar years 10 to seven returns to guide decent a given has earnings, (inflation-adjusted) of years 10 to price compares which price/earnings), shiller va decent constructed already have builders master some Luckily, few models. a themselves build to need investors inflation. after loss small a should flaws, its all for measure, future ex of guess a than more anything ulse yeooitand economist by published from although abound, smithers. andrew ac inflation. match the ihtems uls vie bullish most the with ic etdrtrs hs h s this use who those returns; pected uto tools. luation fO no ex st aine ttemmn,i also it moment, the at patience. r Us es esv,adrtrswl not will returns and pensive, c mark ock ’s eo hs iltl o what you tell will these of ne sug ae(c CaPe ex bu at udmanager fund rmsae lhuhbonds although – shares from r ge at etdrtrsfrom returns pected sesadi regularly is and assets e r itebe little are an at st st rc otepa of peak the to price se at Te orrtrsahead returns poor s re:boeh social biotech, ories: ye h replacement the et Ya es aeacac of chance a have least sla. yc In ild etwe or week next do will epoesrrobert professor le my d lle Va ial adjusted lically etetrequires vestment rs Th inso CaPe of riants aort comes favourite ipO tt ge Jo s hrslook shares ese er. st w. hn rs st to In Us ay W Ft bin st hu s ead, out. shares st va blog ’s ex ssman, ocks. “ lue q, pect ger

Photos: warner bros

8 T aeo h Game the of case television advised. badly been have they proving families: wealthy many by faced demonstr month last in resulted it that ruling the court but supreme moor. grouse a on birds of number the about email an pin down: to easier far something was spat writing than use conventional more a to in throw a you if – or began. trustees reidhaven Viscount and fish frozen a be dispute £1m a think to like i how is wondering, were you case them…” st trousers red Pe sh bit a the – are there grouse.” 2,000 yo grebe. slavonian a is spotted i’ve all and hour squawk…” prolonged somewhere…” st cl the Ge ma co th vi |f No artled at eemgthv edtewitness the read have might eese hp your rhaps adteewere there said u in in th yeah, “oh, we “look, “y “resting?” bush a in restin’ just probably “er, “W y’ mns a epthslwdegree law his put he had ements, fj t. ejust re rw a,they eah, rs–i shwiimagine i how is it – ords nc htbritain what realit s in is, l,weeaeteothers?” the are where ell, co y. ga lepro iigfor pining parrot blue egian mo e tt ex m/ lu y, t yhnsk Python nty otmgtcall might port tt wealth ’v ty h rgno hsspecies this of origin the ri lo grouse. a definitely was me.” to pipit big a tree…” that behind here enhr an here been e ge coon ent tw eyplumage…” vely hew o o qie it squire, no, “oh “t ie fe a after tired t th mn ’s een ’s a okdmr like more looked hat ch n,i utflew just it one, ing at aetglobal latest Wa at ’s et saproblem a es sn “t ches. ’t ecurious he afoot Jo hn ”, the th e bi unrPiipdswudhv ae i adllahradsml used simply and leather sandal toda his saved have would Phidippides runner FT wha columnist rd y. to to di θνίι10Πέρσες 1-0 Αθηναίοι t “ ,0 ehdbe e to led been the had not he – 2,000 birds 360 or brace, 180 yielded just shooting of years five moor, the improve to £530,000 spending despite eafo h efil family. seafield the of on behalf estate the after look who Viscount reidhaven, of trustees the owners, its to land the returning before shooting, for birds of number to the moor increase the in investing as well year as a £25,000 pay to had erskine rn ntescottish the in Grant oka1-erlaeo moor a on lease 15-year a took seafoods, JW of owner millionaire trouble ntneo eloffamily well-off a of instance only the from far but admittedly, rvn huh–adne owhich to danger a – though proven, rectified. posthumously could be that error” “clerical a this deemed the other each gave solicitor a after wills, the va on rule to had court supreme the earlier, month a only advisers. professional their by ruffled feathers favour. his in ruled court supreme the – redress for ineligible fteoiia beneficiar original the of erskine ate sreading… is matthew sp run ehdrle ngrouse on relied had he arguing iiyo aehsadadwife and husband late a of lidity irpeetto”btage that argued but misrepresentation” ho Un oeerr r o oeasily so not are errors some No he siae na mi rmthe from email an in estimates p dnug or on “negligent found court edinburgh conatwho accountant othscs natcnclt an – technicality a on case his lost we ato h or fe einitially he after moor. the of part were these discover to only – trust ntems esl populated densely most the in ex ’s orcmo rgre dispute, garden or common your t e h em ftelease, the of terms the der ee,esiecamdthat, claimed erskine wever, Jo ruh 1 aae claim, damages £1m a brought ut si osg ymistake. by sign to rpltdfo idcount bird a from trapolated st ’s nKyo ua n cnmcpors n h re mar Greek why and – progress economic and human on Kay hn re hnaiti erskine, alistair when arted x iie atesi was partnership limited al es re th ar cu LO ra hi pr h family the n n of one e )! ;) L ghlands. y, rr ex to h court the es ge pect. h relief the tt in at n their ing er castle ’s g va th ti th re preser wealth to threats “recurring six top the of one were “disputes” discovered Fa Fleming assets, of £100bn for account in alert. becoming are families more hmevsi h ieo fire. of line the in themselves don really they words, with.” work they providers, service or clients, potential the opposite family unhappy an representing don specialists firms. leading by unopposed largely disputes. winning in boon a proved has managers wealth other pre its moor, grouse of a inhabitants the in trait welcome a be not might shyness publicity While publicit and cost se the most – court to cases it of make cent per 2 than less estimate witness the take to has equitably. beneficiaries treating not trustees and advice tax wrong the giving accountants assets, unsuitable recommending managers investment involving cases an in give opinion to called been has he years ex he investment,” an in happened ex an give to families representing lawyers issue contentious or litigation work. witness” “expert out carry to lawyers by on called is increasingly he finds he investment, on clients in ma of founder and on lis ea asta nrecent in that says dewan plains. have should what on view pert iy& mily uvyo elh yate that dynasties wealthy of survey a diint diighsown his advising to addition to as ha ho “W aeet oeo hsi surprising. is this of none nagement, “ at e are e yo su a on t testimony its found has ssium ea usi:“industry it: puts dewan ee,h nsta eseldom he that finds he wever, vat ge ion s Pa hdwn chief dewan, sh ty ”, rt ial ie by hired pically lnsd nainadtax. and inflation alongside es h elhmanager, wealth the ners, ’t ha att be to want ssium y, va eobserves. he ” ’t st ec among lence att find to want as and. Tw tt ex in ebefore le set itter ecutive “W other W at e hon

Photos: charlie bibby; dreamstime underdogs up to speed In f1, where mIllIseconds are worth mIllIons, the smaller teams need to pull out all the stops

BY samantha pearson S os ihh ac,wse onwith th down washed Sauce, on hp beans with baked toast – breakfast having are sponsors their oxfordshire-based the paddock, the elt ol rbbydspon otF fans. F1 most the disappoint – probably guests would celebrity reality their and the teams – drivers, paddock of the hangout inside finally and turnstiles more fans, championship the in ra and parties. women champagne-fuelled beautiful cars, a fast be of to combination imagine dizzying they what to host world the sport, of glamorous focus the becomes country their pounds. of millions worth be can millisecond trick nailbiting final, the represents usually country year the of dates sporting important Brazil wage. as much as almost – ($225) in. air. the in flags whistles Brazilian neon whirling blowing and beats, of confusion a to writhe igisl fe h et fntoa hero national of death the after itself cing r sbrl omfrfu ml tables. small four for room barely is ere in of crowds past hill, the up turnstiles, the beyond But Fo of intention no have them of many Santana, like Fo th y, rzlas ti h n iei h erwhen year the in time one the is it Brazilians, r h ol of world the r hi eintdpral ulighlwydown halfway building portable designated their haettick cheapest e Ne il rc htcnbeko aecres hr a where careers, make or break can that track hilly he etees hycan they vertheless, iotr iceoeha sesai revellers ecstatic as overhead circle licopters led eebe Rio resembles already nthe on Fo ’s et nr atn a nyimagine only can Santana andra pr ml n,the one, rmula atftlacdn 0yasago. years 20 accident fatal last o h three-day the for htle eodteheavily the beyond lies what ix st ure turnstiles guarded re adntt pl e beer. her spill to not hard tries ra nrnet São to entrance rmtebrbhn e sshe as her behind bar the from it et around reets in h ukmscbaigout blaring music funk the lr,wgln e isto hips her wiggling clerk, huste5-erodbank 55-year-old the shouts it but up, ma eda ce ’t snot is terlagos e n ftemost the of one let igesicudhv saved have could i guess “i ny ft y, ’s aels neetin interest lost have ev u the but .c go otl minimum monthly ’s ma n1a ngrand on 10am en ’s om ra la aoscarnival. famous ywtotapar a without by so usata and team russia cetrack. in i american tin ev cu /w ex terlagos pa ➤ n sR$525 is ent at so tea. of ps ay pensive,” at ’s ea mosphere ulo rt the most ra lt nSenna on ’s e–a – ce h| go ing ty. 11

photo: paul gilham/getty public investment since then has turned the paddock into a cramped anachronism of the days when F1 teams made do with a dozen employees, rather than the several hundred they have nowadays. “Venues such as Singapore, abu Dhabi and monaco – F1 still has a glamour factor there,” lowdon says, hunched under an awning to keep out of the rain. however, the F1 brand itself is also built on something of a myth, team members say. the sport’s glamorous image has allowed F1 group to secure lucrative sponsorship and corporate hospitality contracts, helping it to post record revenues even in the aftermath of the financial crisis. While the group does In with the not publish its financial results, the draft prospectus for Interlagos crowd: its planned initial public offering shows its total core spectators soak up revenues grew from $922m in 2007 to $1.225bn in 2011. the atmosphere Since the end of 2012, F1 group has secured even of the Brazilian more lucrative deals. Rolex signed a $35m-a-year Grand Prix contract in December 2012 to be the sport’s official timekeeper. in February last year, smartphone maker this is partly Brazil’s fault. For races closer BlackBerry agreed a sponsorship deal with mercedes’ to home in europe, marussia, the team owned F1 team worth $12m a year for three years. the same by the Russian sports car manufacturer, bring month upS, the logistics company, joined forces with their own motor home and pack everything into the Ferrari team, and F1 signed a $200m, five-year three trucks. Sometimes they even bring their sponsorship deal with emirates, the airline, in one of the own water – otherwise the tea doesn’t taste sport’s biggest contracts yet. right, says graeme lowdon, marussia president yet despite the billions of dollars staked on every race, and sporting director. But in more far-flung the reality for the drivers and mechanics is very different. destinations everyone has to rely on the local at marussia’s team dinner, held the night before the country’s infrastructure – a rare leveller in the race in one of São paulo’s buffet restaurants, one member sport. and Brazil’s is one of the worst. explains how she is bombarded with questions about her Brazil had an early start in F1, completing jet-set lifestyle every time she goes to the hairdresser. “it the interlagos track in 1940 and holding its is not really like that, but you don’t want to destroy the first grand prix in 1973. however, a lack of myth, do you?” she says. Back in marussia’s garage in the paddock, the engineers may not have been living the F1 lifestyle their ASked About her jet-Set lifeStyle, A friends imagine, but the atmosphere is still electric. losing is not an option; the team’s fate depends on MAruSSiA teAM MeMber SAyS:‘it iS not whether they can hold on to the 10th place they have reAlly like thAt, but you don’t kept since the second race in malaysia. if they do, they come one step closer to winning millions of dollars in wAnt to deStroy the Myth, do you?’ extra prize money – a coming-of-age moment for the

➤ photoS: aNDRe VieRa

12 |ft.com/wealth

for the driverS there iS preSSure world record,” explains lowdon as the crowd applauds. the whole team take fitness seriously. But for the to StAy in ShApe: An AdditionAl drivers there is even more pressure to stay in shape: an 3kg Around the wAiSt will Slow additional 3kg around the waist will slow the car down by 0.1 seconds a lap. “people often wonder why i have to the cAr down by 0.1 SecondSAlAp work out. i don’t think they realise what the speed feels like in such a confined space,” explains marussia driver , who is in his debut season. F1 underdogs who started racing in 2010 with the lowest it is also a gruelling lifestyle. From march until the budget of all the teams. end of November drivers travel to a new country roughly according to the championship’s byzantine rules, if every two weeks, fitting in a rigorous training schedule marussia finish 10th or higher for two years in a row around the races. Chilton recalls one terrible night of they stand to win prize money of around $40m in 2015, jetlag in South Korea: “i got an hour and a half’s sleep depending on the F1 group’s 2014 earnings. and then i had to get up for the Korean grand prix.” “We were in the same position last year and we lost it, so however, Sunday’s race will be his toughest yet. Based you can imagine the emotions running through the team on his performance, marussia will decide whether to right now,” says andy Webb, chief executive of marussia keep him on next season – his F1 career could be over F1. With only six out of 71 laps to go in the season’s final within a few hours. he has been watching motivational race in Brazil in 2012, rival Caterham stole 10th place. speeches on youtube to psych himself up, he says. originally called , the team was set up in 2009 as an offshoot of , one n the garage, the team are preparing for the race. of Britain’s most successful Formula three teams, in the room resembles a hospital ward as mechanics partnership with entrepreneur Richard Branson. a year lean over Chilton’s car, carefully extracting samples later, marussia stepped in. of oil with syringes to check for any microscopic it was a management reshuffle that would change metal particles that could indicate internal damage. Webb’s life. a former property developer, he had worked “that car gets more attention than a typical on behalf of andrey Cheglakov, the Russian tycoon human,” says lowdon. every time the cars leave the behind marussia – a classical music fanatic who made his garage the mechanics scrub the tyre marks off the fortune in video-game consoles. “i ended up helping him iwhite floor – that way it is easier to spot any debris with a few other things. then he told me he was going to that might indicate a problem, he says. buy an F1 team – and asked me to run it,” says Webb. as it gets closer to 2pm, Chilton and , marussia may be one of the newest teams on the marussia’s other driver, are strapped into their cars. grid, but when it comes to pit stops their mechanics are Finally, the five red lights on the starting gantry go out some of the best. in one of the many practice sessions and the race begins. the mechanics run back from the before the race, a crowd gathers on the track to witness track to the garage. everyone slides on their protective the mesmerising spectacle. about 20 mechanics take headphones and locks their gaze on the small screens Tastes like their positions around the car with the calm and poise of overhead. For the next hour and a half the eerie silence victory: the athletes, waiting for a random selection of instructions – in inside the headsets is broken only by radio messages Marussia team this case, “change the four wheels and the steering wheel”. between the team and the drivers, and the occasional celebrate their What follows is a two-second blur of bodies darting thundering roar as the cars pass by. “For traction, try 10th-place in perfect co-ordination – a form of extreme high-speed mid five, exit 10,” an engineer instructs Chilton – a code finish for the ballet. “if everyone had changed the wheel as quickly as that tells the driver which of the buttons to press on 2013 season that guy on the front left one, that would have been a his steering wheel. the drivers respond with breathless observations about conditions and the car’s performance. after a couple of frenzied pit stops the unbelievable happens: Caterham driver giedo van der garde is penalised for ignoring a blue flag – a warning to make room for a car that is about to lap him. themarussia team cheer, to the dismay of Caterham in the next garage: victory, or rather that elusive 10th place, is in sight. Red Bull’s Sebastian Vettel is the eventual winner, but nobody here is paying much notice. it is only when Bianchi, followed closely by Chilton, passes the chequered flag that the team members roar with delight and collapse into each other in exhausted hugs. Not only have marussia secured 10th place, but Chilton is the first rookie driver in F1 history to finish every race in a season. he will be back for another one and the sport’s smallest team may soon have the cash to buy the technology they need to secure their future. Before giving television interviews and then packing up their belongings to head to the airport, the team linger in the garage to gulp down some celebratory sparkling wine in plastic cups. Chilton is nowhere to be

seen, though. he has popped out for a cup of tea. W photo: aNDRe VieRa

4 |ft.com/wealth

o

PHOTOs: fred r cOnrad/new yOrk Times/redux/eyevine qualit are seismic revelation this from shockwaves and continue investigations erupted. lawsuit first eea or atatm ocninn ae othe to fakes consigning galler to autumn last court federal a such collectors prolific as and years, 165 than more masterpieces for american and european in trading galleries, world. picture art a murky paint a that of papers the legal from in decade alleged a is mid-1990s than more over of dollars tens of involving millions trade illegal an fakes. worthless as es n meerbea a as as revelations impenetrable with and end messy abrupt an to came fortunes its kooning, Po de willem including artists century 16 Yda BY as we so ar su tr art lc and llock Pa Th Th lfiarsls a rosales, Glafira |f ul y. e aeo nelrwsoc yoyoswith synonymous once was knoedler of name e y. us tw cue fsligwrspitdb edn 20th- leading by painted works selling of accused ppl lY ma t. ld me cl it fo re co a isb knoedler by aims a enoeo h world the of one been had nha fu lnwr mn t lutiu let.But clients. illustrious its among were llon al ma m/ t st tt or rg y Be fo krtk hthv enunmasked been have that rothko rk un l reverber ill ngleycoe n21 fe the after 2011 in closed gallery an wealth is l rge alr and gallery af Lo Th ks do er r in ma ng uhi a se was it ough ter is at Th mi ’s okdteatcommunit art the rocked addae,amte in admitted dealer, land n hog h r world. art the through ing ies omrdrco,ann director, former Po sh th o-euc knoedler now-defunct e ne rsiiu alre has galleries prestigious dg sk lc painting. llock n fteworld the of one ll w ogre involving forgeries yo ’s or gi.ataein trade a again. at tt otrespected most ed etesame the be kassociates rk rs ilnever will trust io e,police led, ers ev euainis reputation ol where world sh nce erything, y. t had st ns in Ja ung, nart an ckson ’s tw most st y. and ice ➤ ohowr,right work, Rothko untitled fake a selling of accused been has which Knoedler of director the was Fr Ann Shocked: emn above, eedman, ga ller Ma y, rk

Gregory clarick, the lawyer representing feigen and silverman, says knoedler was to art what Admission: freedman, and its owner, Tiffany is to diamonds: “when you buy a diamond Glafira Rosales, michael Hammer, that from Tiffany, you don’t ask another expert to right, admitted they were unaware the confirm the diamond is real.” under oath that works were fake and had cahill is representing new york businessman John the artworks, consulted experts about Howard in his legal claim over a de kooning painting including the de their authenticity are set that has since been uncovered as a fake: “He’s very Kooning, above to be challenged in court. upset. His father, who had always hoped to own a right, she sold Trial dates have yet to be de kooning, was the reason Howard purchased the to the Knoedler fixed and the government [painting], as it had a sentimental value.” gallery, above, has requested a delay were fakes while evidence is gathered, ecalling the great forgers of the past, according to John cahill, representing one of the claimants. such as John myatt and elmyr de Hory, Luke nikas, freedman’s lawyer, says she denies the cahill adds: “The brilliance of this accusations, and documents have been submitted showing scheme was not so much that the fakes the extent to which “dozens of experts” supported the were so good but that they were placed attributions. He says that freedman consulted “the very in the context in which no one would be best and brightest” and went “way beyond what would rinclined to give the notion they could be normally be done in these circumstances to vet the works”. a fake a second thought. One legal document from a related case states: “from charles schmerler, the lawyer for knoedler and the moment freedman first met rosales, freedman Hammer, responds: “There is nothing that shows that showed the works to the most authoritative in the anyone at knoedler knew or should have known that art establishment, which repeatedly confirmed the… these works were not authentic.” authenticity of the rosales collection.” They add: “rosales’s The lawsuits allege that rosales, aided by a partner, recent confession is irrelevant to freedman’s good faith.” sold fakes claimed to be newly discovered works while the federal criminal investigation continues, more collected by a wealthy man during the 1950s when he arrests are expected, according to lawyers who say eight lived in switzerland and mexico. The paintings were lawsuits are in the pipeline so far. allegedly created in a garage in Queens, new york, by a iLy news/GeTTy da claimants include new york dealer richard feigen. forger who has since made himself scarce. when he and fellow dealer manny silverman acquired a Howard’s lawsuit claims knoedler’s purchases should clyfford still painting – “untitled”, 1947 – for $850,000, have raised “red flags” for being “suspiciously cheap”. it never occurred to them it was counterfeit because the “The price paid to rosales [$750,000] was less than 20 source was impeccable. per cent of the market value knoedler established by “it had this knoedler provenance and frankly i didn’t selling it virtually simultaneously to Howard… for $4m. question it,” he says. “it looked perfectly authentic to This was more than a ‘bargain basement’ price it virtually me… a very skilled forgery.” announced something wrong with the painting.” in what they describe as “one of the largest art frauds in us

history”, the Howard legal papers allege his purchase of a rk Times/redux/eyevine; ny

fake de kooning came with a “phony provenance”. yO ‘it looked authentic to me… The legal claim states “serious doubts about works” a very skilled forgery. i take had been expressed as had doubt on the experts consulted. it names one suggesting a presumed nothing for granted any more’ Pollock was “not authentic”. “defendants either ➤ PHOTOs: new

18 |ft.com/wealth

‘before, you could say, “well, duped. The art newspaper has identified two institutions among the possible victims. One is the kemper museum i found this pollock in a junk of contemporary art in kansas city, missouri, which has shop”. [now] they want to see two fake paintings, including a franz kline acquired for $475,000. a museum spokesman will say only that the a history behind the painting’ museum is “conducting an internal audit of a small select group of works in its permanent collection” and that the works were gifts to the institution and are in storage. ignored or, worse, suppressed information about these and other red flags.” he Howard lawsuit also names the late yet freedman’s lawyer has referred to letters from anthony masaccio – who appears as a noted experts, including a public gallery and artist key figure in art forger ken Perenyi’s foundations, that reveal the lengths to which freedman 2012 autobiography Caveat Emptor: The had pictures evaluated. nikas says: “That’s not a function Secret Life of an American Art Forger – as of her thinking something’s wrong… That’s what any a source for knoedler of art that was “at responsible gallery owner does.” tbest dubious”. On behalf of Hammer, domenico de sole, chairman of Tom ford schmerler argues that knoedler went to extreme lengths international, the fashion company, has filed a lawsuit to review these paintings, and the opinions obtained by over a fake – an untitled rothko – that he and his wife the gallery from the world’s leading experts supported eleanore bought from knoedler for $8.3m in 2004. the authenticity, which was provided to the buyers. “not Their legal argument contends the gallery should have one plaintiff [contacted] those experts,” he adds . realised someone cannot buy an undiscovered masterpiece Perenyi fooled auctioneers, dealers and collectors on at the price knoedler paid – $950,000 in 2003. it states: both sides of the atlantic for more than four decades. “Hammer knew about the suspiciously massive profits He says he is not surprised by masaccio’s alleged knoedler made on the sales of rosales’ works – often involvement with knoedler. marked up 200 per cent or more.” Perenyi’s specialities included British sporting and nikas defends his client, saying: “[The pictures] marine paintings of the 18th and 19th centuries. in didn’t have a substantial history or documents behind his memoir, he explained the tricks of his trade, from them and vetting them required a significant investment recreating natural cracks to discoloured varnish, backed of time and resources by knoedler and ms freedman… up with plausible stories of how a particular picture [which] the sales prices… reflected.” had been discovered in a relative’s attic or a car boot de sole’s complaint also states that rosales has sale. Though investigated by the federal Bureau of admitted, under oath, that all these works are fakes, yet investigation, his case was closed in 2003 and is now the defendants are still sitting on “more than $60m in subject to the statute of limitations. ill-gotten gains”, according to the legal papers. The de He recalls that, by rotating auctioneers and dealers soles are seeking “no less than $25m in damages” plus across the uk and us, he kept under the radar. interest, fees and costs, it adds. commenting on knoedler, he says that, with so many The defendants have rejected the claim and deny newly discovered paintings turning up in one place, “it dishonesty. Lukas says: “ann too has been significantly was bound to go bad”. harmed by this... she believed… in rosales.” The case has made the art world more cautious than rosales has been released from prison pending ever, he senses. “Before people make a big investment, Art forger Ken sentencing. The big question is what kind of sentence they want to see a solid history behind the painting, Perenyi, below, fooled reduction she can secure by co-operating. Her lawyer whereas before you could say, ‘well, i found this Pollock auctioneers, dealers and declined to comment. in a junk shop’.” collectors on both sides One problem – which no doubt suits illegal traders He says he painted fake Pollocks about 12 years ago: “i of the Atlantic for more – is an increasing reluctance among experts to express had clients that wanted Jackson Pollocks. at first glance, than four decades opinions, for fear of being sued if wrong or embarrassed if you’d say, ‘they have to be easy – you just drip the paint along’. To the untrained eye, it looked like a Pollock. But to someone who had been looking at his work for years, it lacked a certain energy and rhythm. i figured out exactly the way he made them and implemented the first basic important step of making a pattern of drips in black only on the canvas. everything else is overlaid above that. after i got the sequence right, i made ‘Pollocks’. where they are in the world, i have no idea.” sharon flescher, executive director of the international foundation for art research, says no one has data to assess the scale of the problem: “forgery, alas, is nothing new. my own organisation was founded in the late 1960s in the wake of several forgery scandals. what may be y Times/zumaPress new is the greater attention being paid to fakes now in Ba

light of astronomical art prices. The stakes are higher.” mPa she adds: “Perhaps the best advice for purchasing art Ta in these uncertain times is, to paraphrase the words of a W former us president, ‘trust, but verify’.” PHOTO:

20 |ft.com/wealth

revolutionary forces in the wake of turmoil in ukraine, the role of the country’s oligarchs is under scrutiny

BY Yuri Bender photograph BY ross mcdonnell

As Kiev responds to promises of aid from the International Monetary Fund and the EU, most of the country remains nervously glued to their smartphones for the latest news about Russian incursions in Ukraine*. But they are also starting to ask what role the oligarchs – some of Europe’s wealthiest people with fortunes made in steel, coal, gas and banking – played in supporting the pro-EU uprisings. The unrest has given the oligarchs a further V opportunity to shake off once-shady reputations and ictor Pinchuk has had a good revolution. Close friends present themselves as concerned business leaders and with the Clintons and Tony Blair, and one of Ukraine’s reputable partners for investors from European and US four wealthiest and best-connected industrialists, markets. The most vocal voice coming from the oligarchs Pinchuk’s charitable foundation is about to fly 70 throughout the protests, in condemning the authorities’ demonstrators wounded in Kiev’s Maidan Nezalezhnosti brutality, was that of metals magnate Pinchuk. (Independence Square) for treatment in Germany. We meet in his palatial glass-panelled office on the Prominent during the recent turmoil, he is keen to show 26th floor of Kiev’s Parus Business Centre. his continuing commitment to the activists and the new On his desk, on top of a pile of documents, Pinchuk government. has a signed photograph of boxer Wladimir Klitschko – “Big business, like the entire country, has been given younger brother of former world heavyweight champion a huge chance by the Maidan heroes to participate in and presidential contender Vitali. The logo of Pinchuk’s the building of a new country to a certain extent from Interpipe metallurgical mill was embossed on the scratch,” Pinchuk told me in early March. younger fighter’s trunks in his title bout with Russia’s “It will be an honour to contribute to building the Alexander Povetkin last October. freshest, most surprising, most attractive country in the “I made the mistake of sponsoring a boxer in a fight world.” for Ukraine versus Russia,” shrugs Pinchuk. ➤

22 |ft.com/wealth Opening times: Victor Pinchuk says big business has a huge chance to help build a new country Fighting talkers: Crucial to delivering a future based on “European “Maybe I am influential, but it is the power of protests in Maidan values” is Pinchuk’s hand-picking of future Ukrainian influence, not the influence of power,” Pinchuk says. “I Nezalezhnosti in leaders, educating them in western universities and don’t hold any governmental position.” February, above seconding them to London banks and law firms at the “But I can establish certain benchmarks and I can left; former “right moment”, before they are seduced by the system. share my vision about how to be more efficient in president Leonid “I hope the people we have sent abroad will increasingly different areas.” Kuchma, above take responsibility,” he says. right; potential Pinchuk himself had several head-starts in life. He espite these occasional presidential grew up the son of art-loving parents, well connected in displays of chutzpah, Pinchuk candidate Vitali the metallurgical industry of Dnipropetrovsk. This Soviet is prepared to admit his Klitschko, opposite powerhouse city was closed to outsiders due to its secret mistakes, such as overplaying rocket research facility. family connections in a run-in “We used to hear our walls shaking and we didn’t with former Dnipropetrovsk know why it was,” says Yura, a weather-beaten driver in business partner Yulia his 50s who ferries guests to Pinchuk’s environmentally Tymoshenko, who has recently friendly Interpipe factory, built on the banks of the Dbeen released from prison. Dnipro river, complete with art installations from Most Ukrainians believe she was jailed on trumped-up Danish-Icelandic sculptor Olafur Eliasson. “Then we political charges, but few trust her implicitly. found out it was rockets being tested at the factory where Tymoshenko turned on her fellow oligarchs following Leonid Kuchma was a director.” the Orange Revolution of 2004. After she was appointed Kuchma later became president of Ukraine and prime minister, she reprivatised the Kryvorizhstal steel soon after his daughter Olena became Pinchuk’s second factory, bought for the knockdown price of $800m by wife, catapulting his businesses and personal standing Pinchuk and Ukraine’s richest man and coal king Rinat from regional to national and eventually international Akhmetov. The enterprise was later sold to London- prominence. based Indian steel magnate Lakshmi Mittal for $4.8bn. “From a legal point of view, everything was OK,” says Pinchuk, who, unlike some tycoons, is not tainted by allegations of links with organised crime. “But as a member of the family of the president [Kuchma], I made a mistake.” ‘there are various rich people Bridges are clearly being built with Tymoshenko, expected to run for president in May, while “Chocolate in ukraine. there are those who King” , a vocal backer of the protests use their state position for and potential rival presidential candidate, has been a their own personal enrichment’ guest at Pinchuk’s high-profile meetings in Davos. During an encounter at Kiev’s Ukraina hotel, ➤ PHOTOS: AFP/GETTY; NEALE HAYNES/CONTOUR BY GETTY IMAGES

24 |ft.com/wealth ft.com/wealth|xx who are making sure the country stays united,” says ‘these oligarchs want a Karasyov. declaration of the rules of the Guarded praise for the involvement of the oligarchs comes from the unlikeliest of sources, such game – they are scared of living as Oleksandra Kuzhel, the formidable head of the in a country with no laws’ parliamentary committee for entrepreneurship and regulatory and antimonopoly policy and a long-time critic of big business. which was used as a field hospital during the recent uprisings, Poroshenko accused me of “offending the hile chastising various country” when I asked if the role of oligarchs in politics business owners during should be reduced. a meeting at Kiev’s “There are various rich people in Ukraine. There Intercontinental hotel, are those who use their state position for their own she turns to answer personal enrichment,” says the greying businessman my question about the and television mogul, whose Roshen chocolate exports role of oligarchs in suffered when Russia specifically targeted him for import society and breaks into restrictions in 2013. Wa disarming smile. “I “And there are those who build honest and thank [ industrialist] Mr [Serhiy] Taruta and transparent businesses that bring investment to Ukraine, [Dnipropetrovsk governor and PrivatBank owner] Mr Forces of change: create jobs and declare and document every kopek.” [Ihor] Kolomoisky for coming to help us in this difficult acting president of Sipping espresso in the O’Panas restaurant in time and for working towards the rebirth of the regions,” Ukraine Oleksandr Kiev, Vadym Karasyov, formerly an adviser to Victor she says, referring to the government’s appointment of Turchynov, below Yushchenko, Ukraine’s president after the Orange key oligarchs to run restive eastern regions. on the right with Revolution, takes endless calls from journalists and “They won’t need to seize control of the markets prime minister clients in both Ukraine and Russia, concerned about and kiosks, like most new people do. These are serious Arseniy Yatseniuk; the precarious state of the relationship between the two people, with reputations in business. But we will be anti-government countries. monitoring them closely.” protesters in Under recently ousted president Victor Yanukovich, “I know all these oligarchs well,” says , February in front of the oligarchs’ interests were threatened by his “Family” leader of the Udar political party (the Ukrainian a banner featuring of owners of interlinked companies. These interests Democratic Alliance for Reform, the acronym being Yulia Tymoshenko, are now likely to be shared out among the remaining Ukrainian for “punch”) and the man many think could be below right tycoons. “Today they can say they are Ukrainian patriots a serious presidential contender. Speaking after a press conference at a fortified opposition building, deep in the Kiev suburbs, he says: “They want a declaration of the rules of the game, so things don’t keep changing. They too are scared of living in a country with no laws.” The imposing yet affable 6ft 7in former boxer had also spoken about the oligarchs during a previous encounter in London, when he told me he would not be expropriating any assets or reversing any deals if he became president, preferring to “sit down with all of them round the table, when we discuss the nation’s future”. Prime minister Arseniy Yatseniuk has also confirmed that renationalisation is off the agenda. According to his aides, Akhmetov is an admirer of both Yatseniuk and Klitschko. “All of the oligarchs were financing the protests. European association suits them well as it expands the metallurgical quota for Pinchuk and Akhmetov, both of whom have already done so much PHOTOS: AFP/GETTY; REUTERS to legalise their capital in the west,” says Karasyov, who is also Ukraine’s best-known TV political pundit. the big fish in donbass Loyal supporters: Pinchuk may not be happy about the governorship Unlike the intellectual Pinchuk, who grew up buried in , of his native Dnipropetrovsk region being handed to his books among the technocratic elite of Dnipropetrovsk, above, greets rival Kolomoisky, but he proclaims himself ready to serve coal-miner’s son Rinat Akhmetov hails from a down-at- the crowd at Ukraine. “It goes without saying that we [the oligarchs] heel industrial area on the fringes of Donetsk. a Shakhtar are all ready to defend the unity of the country,” Pinchuk “He loved boxing and ran his street football team. Donetsk match says. “By whatever means it takes.” W Even then he was a leader, who could bring people * At the time of going to press on March 13 together,” says Ludmila Dmytriuk, head teacher of School No 63 in the Kubushevsky district. ‘these are serious people She also recalled Akhmetov’s “phenomenal memory”, and the oligarch, whose picture adorns her with reputations office wall, has certainly never forgotten his roots. His in business. we will be Foundation for Development of Ukraine, employing 40 of its 80 staff in his native Donetsk, refurbished monitoring them closely’ the school with state-of-the-art cinema and workshop facilities, plus an artificial football pitch. He also finances the nearby tuberculosis hospital, to fight a disease that once afflicted his brother Igor. “The Donbass region is always first in Rinat Akhmetov’s thinking,” says Anatoliy Zabolotny, head of the foundation. Many staff at the Donbass Arena, home to Akhmetov’s Shakhtar Donetsk football club, believe their own “president” could do far better running Ukraine than the recently ousted Victor Yanukovich. “Business people here are demonised, not held up as civilised role models,” says Jock Mendoza-Wilson, a director of Akhmetov’s SCM holding company. “There is always a question of how they got there. Ukraine should stop looking backwards and judge people by how they behave today.” With his once reddish fringe well on the way to grey, Akhmetov appears almost statesmanlike, waving to fans from his seat high in the Donbass Arena during Champions League matches. “A customs union [with Russia] would mean 20 or 30 years of rule by and spells the end for all of the oligarchs,” says political analyst Vadym Karasyov. Akhmetov has been criticised for not doing enough to prevent his former friend Yanukovich’s bloody crackdown, though his aides confirm he refused to yield to threats from the security services to his KievEnergo group, which supplied electricity to the anti-Yanukovich protesters. “Akhmetov has not even reached 50 yet and he plans to live for a long, long time,” says Karasyov.

ft.com/wealth|27 Video idols youtube and its rivals are home to stars who are little known outside the online world but are making serious money

BY Feargus o’sullivan

The stars of YouTube are a single video that goes viral, but they tend to be fly-by- markedly different from the media personalities of night successes that soon disappear. There is, though, previous generations. While they are watched by millions money to be made online, partly through advertising daily, have lucrative careers, are courted by brands but also through discreet product placement and brand and mobbed online by fans, many have gained success consultancy. without even leaving their homes. To generations who The role of agencies, such as Gleam Futures grew up before the internet’s maturity, this newfangled for YouTube and GrapeStory for mobile app Vine, form of success might seem perplexing and gallingly easy. is growing, as brands try to tap into the online The reality, however, is rather different. The most communities created around well-known figures. successful YouTube members develop a following As the highly successful online stars we talk to on the through years of uploading videos and interacting with following pages emphasise, however, slick branding fans on a daily, sometimes hourly basis – and the internet is less important than striking an intimate, respectful is no pot of easy money. A few members might make a relationship with fans – one that would be broken by small fortune through advertising revenues after creating overt attempts to transform hits into cash. ➤

28 |ft.com/wealth The veteran: Alfie Deyes’s clips are a record of a standard young person’s life Jerome Jarre A head for business and a well-developed sense of the ridiculous don’t always make obvious bedfellows, but both are behind the quick-fire success of Jerome Jarre (left). The 23-year-old French business school dropout was early to understand the huge potential of mobile app Vine – then just a year old – where users create and post tiny six-second videos. Based in New York, Jarre is already making waves both as the creator of a string of witty, ludicrous clips and as co-founder of GrapeStory, an agency that matches Vine creators with brands. he is almost messianic about Vine’s potential: “I saw a huge opportunity with Vine, so I started using it intensely and connecting with other Viners. It took me a month to gain 5,000 followers. When I saw, I knew that at some point people would have millions.” Jarre was right. With more than 4.5m followers, he has just signed up to create regular Vine content for ellen DeGeneres’ US chat show. But beyond his own skits, Jarre is also opening up possibilities for other Viners via his agency, a market about which he is unusually candid. “A Viner can make $15,000-$20,000 a Vine. On YouTube you have a lot of metrics, demographics – information that is not available on Vine – so that is why Vine prices are really low. Some YouTubers make $500,000 deals with brands to represent them, so brands are still alFie deyes getting a very good deal with Viners. If The success of Alfie Deyes (pictured on the previous page) Vine starts giving more detailed metrics, is just the sort of thing that makes older generations prices are going to skyrocket, and that scratch their heads in bemusement. With more than is why smart brands are getting on 1.9m subscribers to his triple-channel YouTube page Vine right now – $15,000 is nothing PointlessBlog, the 20-year-old Brighton boy has made a to have an audience of 4m.” career out of messing around with a camera. Despite his commercial Whether it is playing computer games, shopping savvy, Jarre is also clear that with friends or carrying out challenges with a host of brand connections need to other YouTube star cohorts, Deyes’ clips essentially are a be imaginative or low-key to cheerful record of a standard young person’s life. succeed. “The best campaigns This public life nonetheless takes commitment, are when the brand brings with Deyes maintaining a possibly exhausting level of extra value – such as General intimacy with his fans through constant interaction. electric sending Viner marcus “I use every single social media platform possible – Johns on a zero-gravity whether it’s Facebook, Twitter, Instagram or Tumblr – to flight. If it is just about talk to the people who watch my videos,” he says. “It is holding a Coke bottle, it definitely hard to switch off, because every bit of spare is not interesting and we time I give myself I end up on social media. I want to be wouldn’t do it anyway.” interacting as much as I possibly can.” After five years on YouTube, Deyes is a veteran of the medium. Indeed, there is an almost nostalgic note to PiXywoo his insistence that YouTube only works when business Sisters Sam and Nicola comes second. “These days, it is statistically harder to Chapman are an become a top YouTuber statswise than it is to become a illustration of how professional footballer,” he says. much the internet has “Nobody who is big now on YouTube set out to changed the media. be. When I started making videos it wasn’t to gain Twenty years ago, popularity or an audience. People shouldn’t be aiming launching a career to do this as a career and forget about the whole idea, as make-up experts which is to have fun.” from a small city such as Norwich would have been much more difficult. But since uploading a few ‘PeoPle shouldn’t aim to do this visual try-outs five years ago, as a career and Forget about the the sisters, now managed by agency Gleam Futures, have whole idea, which is to have Fun’ millions following the meticulous

30 |ft.com/wealth make-up tutorials on their YouTube channel, Pixywoo. The secret of their success, says Nicola, is a familiar formula for top YouTubers: do what you love, be honest and don’t expect to make a killing. “We did it for the right reasons,” she says. “A lot of people go in now because they think there is money to be made. We did it because make-up is something we are really passionate about, something we want to share.” The sisters’ success, and viewer awareness, also shows that YouTube’s audience is growing up. “While the typical YouTube age range is, say, 11-16, we have a really big range of people starting from 16 right up to 65,” says Nicola. “Ours is a massive demographic of people who really want to learn. It also helps that our work is what YouTube calls evergreen content, which means it doesn’t date.” Pixywoo is now a mini empire, with the Chapmans selling a line of brushes internationally in Boots and Walmart, appearing as experts on other YouTube channels and satellite television, and publishing their make-up-focused Two magazine. Behind all this, Since then, Slimani has become one of Germany’s however, is hard graft that debunks the myth of effortless most successful YouTubers, with more than 760,000 internet success. followers and a sideline as a youth branding and social “We do everything ourselves from start to finish,” says media consultant. his six channels mix grooming tips – Nicola. “A video typically takes us between eight and a how-to guide to recreating Justin Bieber’s hair was a nine hours – not two seconds, like a lot of people think. particularly popular hit – with testing and endorsements We work just as hard or harder than when of products, reaching a young adult audience split more we were offline make-up artists. Not that or less equally between male and female. his success we’d change it for the world.” seems founded on a mix of honesty and diplomacy. “I wouldn’t be popular hyping products I didn’t like,” Slimani says. “A lot of companies send me products to sami slimani review, but I only test out things I am interested in. Twenty-three-year-old Stuttgart, If I seriously don’t like something, I get in touch with Germany, resident Sami Slimani the company first and tell it why. Some try to fix the began his YouTube career in problems I have, and get back saying it has changed the 2009 with a bad case of acne. packaging or the ingredients I was talking about.” When his skin broke out with With Sami’s sisters Dounia and lamiya following school exam stress, he turned their brother with large YouTube followings, the to the internet for advice. Slimanis look like a social media dynasty in the making. “I was looking for tips The siblings’ beauty and fashion line comes out this on getting a clear skin, year and they are cautiously considering a transfer to but on YouTube there television. The resulting attention, while not unwelcome, were only beauty girls can be overwhelming. “Now, I can’t actually walk around doing make-up tutorials,” outside without getting recognised,” says Sami Slimani. he says. “I tried a product “Some people even start crying because they say I am and thought maybe I their idol. Sometimes my mind can’t really comprehend could tell people about it. It’s insane and amazing at the same time.” it. People liked the video and were actually asking sanJeev kaPoor me for even Sanjeev Kapoor is not your typical YouTube star. In more tips, his late 40s, he was already one of the most watched because I television chefs in India before he started posting was the cookery demonstrations on YouTube three years ago. first guy in Such is the power of the internet, however, that his Germany career has boomed on the back of almost 2m hits for his going into most popular videos. this whole Kapoor’s YouTube audience, he notes, is markedly beauty different from his television one, drawn both from thing on India and its worldwide diaspora. “So much of our YouTube. traffic comes from women watching at their workplace. Brand builders: It took two The other surprise is that we have a much younger Jerome Jarre, weeks to lot following us – people from 10 years old up. top left; Sam reach 2,000 Women are more strongly represented in our audience, and Nicola subscribers, which but what surprised us was that men were also coming Chapman, left; was a really big deal into it in a big way. This probably means there are a Sami Slimani, back then.” lot of men interested in cooking but who might not ➤ above

ft.com/wealth|31 ‘Products absolutely have to take second Place to a story’

Studio quality: want to acknowledge it when watching TV with their Sanjeev Kapoor, families.” above, and Curiously, it is not the novel or exotic that attracts the the Wong Fu mosthits, Kapoor notes. The most popular clips “are Productions team, for familiar stuff – things people understand and have opposite from already been consuming, such as chicken biryani or left: Philip Wang, chicken tikka masala”. Wesley Chan and Kapoor is well placed to profit from a nascent Indian Ted Fu internet boom. “We haven’t reached the high point,” he says. “In terms of overall positioning we have just begun.” wong Fu Productions As YouTube content goes, Wong Fu Productions’ polished filmmaking is about as far from wobbly smartphone bedroom shots as you can get. Comprising trio Wesley Chan, Ted Fu and Philip Wang, the company began making films as students in San Diego, California, only turning to YouTube in 2007, having already put together a feature film. The internet has been their making, however, garnering them more 2m followers, a clutch of festival awards and a 2011 meeting with President Obama. Despite its higher-than-average production values, Wong Fu’s content has features that are archetypal for the YouTube generation, mixing shorter skits and longer features, both peppered with product placement, including the company’s own merchandise line. Given that the content is otherwise free, Wong Fu’s fans seem provisionally to accept this. “It was our fans who asked us to introduce the merchandising,” explains Wang. “They love it. We still try hard to keep any products as unobtrusive as possible – they absolutely have to take second place to a story.” As Asian-Americans staking a place in a media world where they are still underrepresented, Wong Fu are trailblazers, not least because they are as popular in southeast Asia as in the US. In fact, as Wang implies, their Asian following may show the shape of things to come in a world where the internet is replacing television. “It seems that in southeast Asia, people known from the internet can achieve the same level of fandom, of fame, as people from traditional media. We were kind of

PhOTOS: KArTIKeY ShWA; mellY lee blown away by the response of people out there.” W

32 |ft.com/wealth

Photo: charlie BiBBy 52 46 42 oe C ae54 page 4C, Romeo Alfa powerful but small the in ground Rohit earth: to Down sC ro Bo pe on on in ou Ca th ph a st ve op Ja e op il n ma oks tp a pr gg rfu ar te an st yo le usthe hugs i er mi e in og Ch me of th ur ss fo in hu re nd no io nt di ro rm am po re ss gi n lo ma py rt er t in iv ta to br gy e fo na iC th sk l ta tr oa a’ li st ge e s xa ai o il ar de han de r? n ls re ti t- ns yo ba on al up ds te un th ly s of e g in si ght ft .c om /w ea lt h| 35 36 T eq in Ma n ecigyugusat lesson. a upstarts young – teaching ’uns and best the proving ’uns old about can media the there thing If 300. of age combined a once a that fielded team a by achieved also was and years six in first reasons. senior County staffordshire the from scoreline Ma cnm could, economy past-it supposedly and post-colonial, ev 20 for cent per 3.4 to up forecast growth GDp uK its revised had england of Bank the that news in delighted newspapers Fe product. domestic go not listing tables: league own their reported have pages financial the which with glee equal reverber english the of glitz the Ls shabby “Less performance. uK’s the on verdict his shabby too “Not 1990): economist ha than 2008) manager Cup-winning (FA tu ta cent), per (2.3 Brazil as whippersnappers such da the of end osudmr like more sound to napost-industrial, a en |f ldfeec u gross but difference al wn(.) ot fia(2.7), Africa south (2.8), iwan bruar rk 14 l fwihhlsto helps which of All No ev rry nchester ey oigthat noting – nthe en ve t. nywsti victory this was only t Ma Le 33 and (3.3) co y, ui at go ge–1 iiin below divisions 12 – ague kwt (Nobel rkowitz British daon h ol,for world, the around ed m/ lepradbc orwith four back and alkeeper Ft’ un y, st st eevs1. reserves unstall Cit or Barcelona, recent with there up results na ti wealth outpace l hncmae with compared when ill s td u atmonth last But ited. at y’ Jo th - rbigof drubbing 4-1 s the In ha es sh ’t iad(3.1). ailand 1- 17 ing go to ru eit it resist, No eetof defeat 0 r redknapp rry 1 pr it , n2 Betley 2, wn ex sa(2), ssia at ge As l managed ble pr mesi – emiership ’s eps it tempts, li the plain Ma Va not z winning ize tu football ’s lladolid nstall nchester ’s a ex one st actly ,” rs ory tw ’s was ’s o ’s cr th th vi BY “ re nce ma e sIs Is Is tt nt maI es he th w , dI or n ffe qu ink nad an rmohrcie,o nadjustment,” an or crises, other from different is this whether is investors right. be may bonds”. outperforming equities see and recovery global improving should conflic wider a into cent per 8.5 down index Nikkei the mark interest sug they did mark emerging in cent 20 per to up put formations portfolio their if questions: post-match difficult facing been have managers wealth the odds, against comeback a such in revel world.” emerging the of parts certain h supposedly the re est tessug others oercn ev osswould losses heavy recent some might managers football while But ge mdcnen fa escalation an of concerns amid A 4. nearly by 500 s&p the and et st nt st cu so. rat oaiiyi h erterm near the in volatility political global a later, month ge l epc gradually a “expect ill Io rnistmln,dragging tumbling, rrencies hi atc wrong? tactics their t ju ssn ayemerging many sent es In oeta o heightened for potential over crisis fr “t ge nuriebrings ukraine in cini kan sent ukraine in action n Ja ga ‘h tecmlxsituation complex “the h sIemerging MsCI the st st emi usinfor question main he nuar ar It to cnwegdthat acknowledged Ma g growth igh om officer a in cent per 2 nearly Is i aeplan game his he investment chief loss its taking – day t” hi more to year the for “ ees,Alan reverse, cent. per 5 than rk me u adclients said but , sho y, e gg ru et wh Fo re er frising of fears n,uK ins, at In sa military ssian lwn this llowing le ot me nt et e down dex Coutts, ba rat equities, et ss ws he s in es’ la her co r emer nc “ pl mp “W pictet of Yv economies.” their rebalance to need and competitive less are that countries hand eM one on shows “It Bank. saxo economist and officer investment portfolio Guy argues fightback, old-world mark emerging time, says. he wages,” rising and countries, these of competitiveness in decline steen says players, aw win to aggregate, want on you if way: hard the learn managers football what discovering It investment.” foreign on reliance a and the cu have not do that countries on don you sure make mark emerging in game main Giner reversed.” or eroded partially been either have surpluses account mark emerging many for enough, sure mark for developing scope the reducing – surplus to members’ its return recession to of decade a half through its way fought has eurozone the then, debt… since into further sinking was turn which in – world developed the to selling was world emerging the millennium, the of years early the “During be power of rebalancing a as it regard economies? emerging in slowdown the with terms guard.” off investors catching deceler “Mark time. some for tha form in decline he says fwdreegn mark emerging wider of of officer investment e em otoi aaesare managers portfolio seems sBno,cifivsmn officer investment chief Bonzon, es pis large lprits: ay ha In to come clients should how But ha ocue ti h la the is it concludes th gI et pa et rmhome. from t’ hs circumstances, these ighl h edfralong a for lead the held ving an ke eidti sasignificant a is this behind s uM at lyr – players ng p i emtl simple: talk team his eps We n o he er,s ti not is it so years, three for ing It st eI rat rlaGnr chief orilla-Giner, tw alth Iv r egist av e one n older and younger een cu ma e ec i i ect playing deficits big oid Ma et rn con deficits, account rrent ev W ob nsurplus… in be to s ’t Ja t’ at an nBai – Brazil en aeet agrees. nagement, been s ce up. screw et Lo et ko onom rwnDolphin. Brewin rk cu r aigan facing are s aebeen have s sn chief bsen, dn&Capital, & ndon tt et

d rn accounts rrent r n a and er, nervousness. ets Mo ev ne ident et cu

rilla- Fo cu is s rrent Fo rrent cu tw at “t ed Ies st

s “ o he er,

photo: reuters

E 40 fu in Sh sharpe a be 0.76 of – performance adjusted this time, over dividends. pay and profitable buffe discovered have to claims school business capital ha,low-volatility cheap, tw |f th e 96ad2012. and 1976 een ve e t. nd st ma co d adta buffe that said udy rat st aeetadcopenhagen and nagement nn li ining m/ rat st o–amaueo risk- of measure a – io connecticut-based researchers by 2013 st a algorithm? an than ge buffe that agrees veryone d ulse nlate in published udy is u sh be he is but nius. wealth g svery is egy ma tt tt ’s me sa is ert epicks he secret: st csta are that ocks st th ock-picking na ef nt fective. at tt is had tt aQr Wa at er ge rren rs gh ha BY zleh je remY ur st ts mark it which managers, individual on of sorts st the pick to computer a using th ex 196 the median the double nteie fthe of idea time the call on we should formula, mere a by beaten be can picker himself. man the have outperformed would that one indeed – portfolio buffe a created they invests, compan csi hc buffe which in ocks se o oeta 0years. 30 than more for isted sitiudtersaces by researchers. the intrigued is th When et uulfn nutyis industry fund mutual e srock as s us y, ev berkshire uulfnsta have that funds mutual nteworld the en st st r n rock and ars rat rfn manager? fund ar ha at tt OF BE TO oo .7for 0.37 of io ’s “ thawa i w game own his ’s investment best tt Br ST FU -s y, et st ty ke ock le AN IL en ND LI D AN MA OU o long. it for manage cannot do who those and benchmark, their outperform managers active few very that shows research copious misguided. are followers these employers. new managers’ the to billions them, moving with went fans loyal many year le both When cent. per 10.8 was return total annualised fund in toda £23,000 have would you 1988, Wo with £1,000 invested had you not? if why and one. into rolled scientists T: h 1adahl er he years half a and 11 the u h cdmccnessi that is consensus academic the but odford NA at TH T, crdr,rcadbuxton richard schroders, ma ’s ST GE in E rk vesco et Ar US r very are s ME ft Pe S hi ud last funds their AI pta udin fund rpetual NT HA N ef ficient ra BO his n VE “ ne ’s il y. LTS TO

Photos: reuters; charlie bibby; shaun curry; rosie hallam these days, goes the argument, and it is almost impossible to find undervalued stocks. outperformance is luck, say the academics. there is no such thing as a star manager. a cautionary tale is that of anthony bolton, who was arguably the brightest of stars when he managed the special situations fund at Fidelity. however, he failed to repeat his success when he changed focus to china and has since announced he is to retire from fund management. Top performers: but is it possible to reconcile the Warren Buffett, research with the fact that some left; Richard managers consistently outperform? Buxton, top; Perhaps, because being a star could be Anthony Bolton, about more than great stock picking. far right; and Neil richard Watts, a fund manager at Woodford buxton’s new employer, old mutual, says good managers have “a conviction-style, repeatable investment process” that they “can communicate to both retail and institutional investors on their terms”. their fees will be astronomical. in short,

Perhaps a star is a good salesperson, you have to invest in the nascent stars. then. imagine someone who made as the authors of the buffett research money early in their career and was put it, somewhat unhelpfully: “if you eloquent enough to convince people travel back in time and pick one stock that they had a system – money would SUccESS MEANSINFLOwS in 1976, berkshire hathaway would be flow in. it is not impossible that their AN“DTHE SHEEr SIzE OF“ A your pick.” employer would then ensure they had the frustrating conclusion is that the best team and resources. if anyone FUND cANHAMpErASTAr even if stars exist and you know could outperform over time, it would who they are, unless you have a time be that person. machine you cannot profit from that if star quality was really a myth, all managers are looking at the same knowledge. but there may be a solution. then surely computers would be better information and they are all clever, so a few years back Kosowski co-authored than people at running funds. but they even a super-genius is only going to a study with Juha Joenväärä and Pekka are not, as robert Kosowski, director get a sliver of outperformance over the tolonen from the university of oulu in of the risk management lab at imperial rest. Given the difficulty of what they Finland that claimed to identify genuine college london, says: “it is hard for are trying to do, that is likely to only be outperformance in hedge funds. a computer to work out whether a a little better than the benchmark. the implication is that if you can merger will stall for regulatory reasons.” second, success means inflows and identify new funds with the same indeed, most of us like to have a the sheer size of a fund can hamper a investment strategy as successful old person in charge. “you can fly jumbo star. the bigger your fund, the fewer funds – clones of those funds, if you like jets to new york with no pilot,” says trades are open to you. Kosowski is – then you should be able to predict andrew clare, professor of asset working on unpublished research that future stars. they studied hedge funds, management at cass business school suggests the current size of a fund is but assuming the conclusion also holds in london, “but i feel more comfortable inversely proportional to its future for mutual funds, and that you are an with someone in the cockpit.” performance. expert at the fearsomely complicated but is it simply a mixture of luck, third, once a star has become a star, maths involved in applying “seemingly sales patter and a good knowledge it is too late to get in on the action. if unrelated regression techniques”, then of financial news? Perhaps, but even stars are just lucky and revert back to you might have just found the holy if stars do exist, they have several the benchmark, there is little point Grail for finding star managers. problems. First, as clare says, “to investing, because once you have otherwise you could just do what stand out, they have to be brilliant: spotted outperformance it is likely to be most people who have studied the the usain bolt of fund management”. over. if managers really can outperform, investment industry do: buy a tracker. W

ft.com/wealth|41

entrepreneurs

petter stordalen there is no business on“a dead planet. “ For me it’s that simple

Anti-capitalist reflections

s it possible to be an anti-capitalist BY daniel Ben-ami capitalist threat” to what he calls the pressure to do so. There seems to be billionaire? Many would assume Open Society and excoriated those he something deeper going on. the question is absurd. Surely the dubs “market fundamentalists”. Others, Petter Stordalen, a Norwegian

greatest beneficiaries of the market such as jeremy Grantham, have argued hotel owner and investor, is unusual N; economy should be its staunchest that capitalism could destroy us all by even for an anti-capitalist billionaire. Pa supporters? destroying the environment. Not only has he made many public Pa I Not so fast. There are several No doubt some cynics would dismiss pronouncements, particularly on examples of the fabulously wealthy such pronouncements as spin. but why environmental matters, but he has going on record as having deep would billionaires feel the need to make also taken part in protests. in 2002, he reservations about capitalism. George such statements if they were not sincere? joined a group of Norwegian activists Soros has written extensively of “the They are not under any particular to protest against the uk’s Sellafield bjOrN OPSaHl; PHOTOS: kerSTiN zu

42 |ft.com/wealth when we run our businesses our planet ask about the financial results,” he says. will go straight to hell.” “itwas a disaster.” in practical terms this means that, Of course, it is possible to be an among other things, smoking is banned, environmentalist without being anti- even in guest rooms, in his Nordic capitalist, but the two are more closely Choice Hotels in Scandinavia and the related than is often realised. if the baltic. Nor is pornography available on planet is viewed as facing an existential pay TV. The hotels have meat on the threat as a result of the pursuit of profit, menu, but guests are encouraged to go it suggests a fundamental flaw in the for healthy eating options if possible. market. For instance, in the words of Stordalen gives two sets of reasons the Stern review, a landmark study for promoting a green outlook. in his produced for the uk government, view, science shows the planet and its Techno optimist: climate change “is the greatest market people are at risk if they fail to respect Stordalen and failure the world has ever seen”. natural limits. although the current his biofuel- For Stordalen, as for many others, generation might survive, the lives of powered the challenge is to replace naked future generations are at stake. He Ferrari, above; capitalism – sometimes called the neo- also argues green thinking is good for and the 2002 liberal model – with a more sustainable business as it helps promote efficiency. protest against version. “The capitalism i see today is in Stordalen sees no conflict, at least over the Sellafield a kind of crisis,” he says. “i want to see the long term, in these two strands of nuclear plant, a capitalism that manages resources in thought. “What is good for society is below a new, much more long-term manner.” also good for business,” he says. This means business people taking on Yet Stordalen was not born into green values and governments being an environmentalist background. His willing to engage in stricter regulation. attachment to the outlook originated This is a world away from the politics with practical concerns. “it started when of karl Marx or leon Trotsky. it seeks we started to look at energy,” he says. to curb what it regards as the excesses “We wanted to save energy because we of the market economy, rather than

wanted to save money.” it was only later erect a different social system, and it that he came to see the environment as does indeed stretch into the world of

important for its own sake. billionaires. W His wife Gunhild, who is a medical doctor and holds a PhD, has played What is good For a crucial role in shaping his thought. “ The former model co-founded the so“ciety is also Stordalen Foundation, which supports sustainability initiatives, and runs good For business GreeNudge, which promotes behavioural change to combat climate change. Given the usual trappings of the billionaire lifestyle it is inevitable that the Stordalens are open to charges of hypocrisy. No doubt deep greens would argue it is impossible to square concern nuclear reprocessing plant. in 2007, for the environment with owning a big he was charged with trespassing house and several fast cars. after he entered a restricted area at Stordalen describes himself as a Malmøyakalven, an island near Oslo, to “techno optimist” who has a duty to protest at the dumping of toxic mud. promote new technology as a catalyst for but Stordalen’s green outlook also change. He bought two of the first Tesla permeates his working life. This is electric cars in Norway and his Ferrari apparent from his business card, which runs on biofuel. another initiative was reads “there is no business on a dead an investment in Think Global, an planet”. “For me it’s that simple,” he Oslo-based electric car company that says. “if we don’t take responsibility has since ceased production. “Don’t

ft.com/wealth|43 PHILANTHROPY DONOR RESPONSIBILITY Farewell gifts

hree years after Jason BY SARAH MURRAY However, some factors can prompt In spite of lengthy Franklin moved to New donors to make a departure that discussions with the York, he realised he no is unplanned. In one of the worst leadership team, when he longer felt connected to scenarios, an individual or family has finally withdrew funding he the small Washington- had a change in financial circumstances found himself being pressured based non-profit-making and can no longer afford to make the by both the non-profit and Torganisation he started gifts. This does not make for an easy several of its leading donors to supporting when he lived there. He departure. “When your resources have renew his gifts. wanted to shift his gifts to causes closer changed, there is often embarrassment “It was ugly,” he says. Even when a to home. But the trouble was that associated with the exit,” says Franklin. departure is not acrimonious, charities Franklin’s donations had been making In the best cases, the original reason often make efforts to bring back former up about 20 per cent of the charity’s that inspired a donor to fund an donors. In fact, in the non-profit budget. “I was one of its top five organisation no longer exists. world, much talk focuses on how to donors,” he explains. It might be, for example, that design and execute “donor retention” What he decided to do was to buy donor stops funding an environmental strategies. the organisation time. By giving it two charity after it has successfully saved “Clarity is the most important

years’ worth of his gifts at once and a park, says Eric Kessler, founder thing,” says Franklin. “They will making it clear to the executive director and senior managing director of probably still try to get you back, but

that this would be his last, he enabled as long as you have been clear, you the non-profit to start looking for have done your part.” In addition to alternative sources of support. “They THEY GOT TWO YEARS making their intentions clear, donors got two years to figure out how to “ can take other steps to make funding replace my giving,” he says. TO“FIGURE OUT HOW TO exits easier for their beneficiaries. This Making a graceful exit when might mean staggering the withdrawal, withdrawing funding from a non- REPLACE MY GIVING with smaller gifts each year before the profit group is a critical part of final donation. the responsibility of donors, say Donors can also make a parting gift philanthropists and wealth advisers, designed to help the organisation find particularly if their gifts have made up Arabella Advisors, a New York-based new sources of funding. “Some donors a substantial part of a charity’s budget. philanthropy service. “Your focus was offer an exit grant or a transition “It’s about the size of your not on the organisation but the project grant,” says Setkova. gift relative to the budget of the – and the project has been completed,” These gifts, she explains, can organisation,” says Franklin, who is also he says. help an organisation to develop a executive director of Bolder Giving, In some instances, donors might strategic plan, undertake a feasibility a non-profit that works to inspire think the charity is no longer efficient study or develop its communications individuals to give away more of their or delivering the results they had capabilities. wealth. hoped for. Changes in direction might Helping a non-profit to secure new “So $25,000 might not be a big be another reason for a break up, donors might not even require money. gift for you. But if it went to a small particularly if the leadership team is A wealthy individual’s networks can be organisation, it really matters to them.” adopting a strategy with which the just as valuable. “Some of our clients In most philanthropic relationships, donor does not agree. host dinners or events and invite an end is in sight from the start – “If I am in something long term the charity to meet their friends and whether the grant is a one-off donation but I feel the organisation has lost contacts,” says Setkova. or intended to run across a specified its core mission, I don’t want to keep However, whatever the eventual exit number of years. funding it,” says Charlie Rounds, a strategy entails, advisers stress that the “Rarely do any funders fund in Minnesota-based philanthropist. “It is clearer donors are with charities about perpetuity,” says Lenka Setkova, a dysfunctional – like a bad marriage.” their intentions from the start, the director of the UK-based Coutts In some instances, non-profits do easier it will be to withdraw when the Institute, which advises individuals not take no for an answer. Rounds time comes. and families on wealth management, discovered this after he decided to stop “The most important factor in how including giving strategies. “Exiting funding a human rights organisation you exit is how you enter,” says Kessler. from a relationship with a charity is because, he felt “the playing field had “The expectations you set as a donor part of being a philanthropist.” changed and the organisation had not”. are everything.” W PHOTO: IMAGE SOURCE/GETTY

44 FT.COMWEALTH

“ “ “

THE EXPECTATIONS YO“U SET AS A DONOR“ ARE EVERYTHING Tech angels

n a coffee shop in Hoxton, out on the BY helen Barrett year apprenticeship with an app design until he was referred last year by the fringe of east London’s technology photograph BY and development company. job centre to Fluency, a technology district, Abdul Shahi is explaining charlie BiBBY Shahi says he was not always this start-up with a social mission. his new place in the digital economy. focused. After leaving school he The company trains unemployed “Coding is a whole different avoided university “because of the young people in digital skills, then finds language and it will take me at least debts”, and following a disappointing them work as apprentices or freelancers Ia year to learn it,” says 20-year-old college course in business – “just with companies or for Fluency’s own Shahi, who is part-way through a one- administration” – he was unemployed, digital marketing platform.

46 |ft.com/wealth philanthropy digital skills training

On a mission: unemployment in the UK and globally. adult for free. Financial groups Aviva Sinead Mac Some rely on conventional and Barclays are among its clients. Manus, left, philanthropy, while others such as Free:Formers’ founders and backers plans to measure Fluency are for-profit businesses that say socially minded investors are the cost savings seek investment from “angels” who are prepared for the risks. “Anyone who to government prepared to take substantial risks to has made money tends to accept some of investments achieve financial and social returns. trade-off,” says Alexis Dormandy, chief in Fluency Such ventures are a big draw executive of the Deep Group, which for wealthy technology and finance owns a majority stake in Free:Formers. professionals, says Beth Breeze, “Some of the biggest venture capitalists director of the centre for philanthropy in Europe are investing in technology at the University of Kent. “Philanthropy start-ups with social missions.” is always a product of its time,” she The same is true in the US, says Leila says. “Technology start-ups happen Janah, founder of Samasource, a five- to be cutting-edge, and because of the year-old San Francisco-based charity peer effect this field is likely to grow.” that outsources digital work on behalf Sinead Mac Manus, Fluency’s of blue-chip clients such as Google and founder, says angel investors are not Microsoft to well-educated but poor just offering cash. “All our angels want workers in developing countries. to donate their time to the business as She attributes the interest in well. They know their skills are helpful.” technology’s potential to tackle poverty Mac Manus says Fluency aims to partly to increased connectivity. “Only offer investors a return of 10 times their recently have workers in the lowest original investment within three years. income brackets had access to the She admits the target is ambitious but internet via 3G,” she says. “For example, stresses an equal part of the company’s in Uganda fibre optic cables are being pitch is the promise of hard evidence rolled out in places that until recently that investments will be put to good had no running water.” social use. She plans “to measure the Janah acknowledges that tackling cost savings to government for every poverty in this way does not always pound invested in Fluency”. work. “We’re not the cheapest model. We Technology projects are particularly have spent money on failures and you good at tackling youth unemployment, could argue it would have been better to according to Gi Fernando, a serial angel have given that money away,” she says. investor in technology start-ups, some But she believes philanthropists and of which have social missions. “Young investors should give projects enough

adults use technology every day. But room to fail. “The Silicon Valley private they don’t articulate how to use it, nor sector raises money on failures to solve do they associate it with getting work, problems for the richest 5 per cent.

Why can’t we take the same risks for the poorest?” Young people don’t Fernando says technology is “ increasingly a compelling proposition as“sociate technologY to donors and investors. “Not every with getting work social problem can be tackled in this way, but there is certainly a place for it in the philanthropic mix,” he says. Meanwhile, Shahi is putting in The company, which launched last which is where the gap is,” he says. hours of coding practice at home, such year, has trained 12 young people and is In 2012, Fernando founded are the demands of his new career. But he about to take on 100 more. Free:Formers, a London-based for- expects to reap rewards. He might start Fluency is one of a growing band of profit company that trains senior his own business one day, but for now is digital start-ups with a social mission, executives from large companies in concentrating on securing a permanent as entrepreneurs spot new ways digital skills with a model it calls “one job. “If I pass my apprenticeship I could for web-based technology to tackle for one” – for every executive trained, join any app company. I could make a stubborn problems such as poverty and the company trains a young unemployed tonne of money,” he says. W

ft.com/wealth|47 planning biotechnology

Keys to immortality

aniel Defoe’s assertion BY liz Bolshaw Levinson and his team of ex-Genentech that death and taxes colleagues are not gerontologists, are life’s two certainties according to de Grey, he welcomes may soon need revision. Google’s entry into the field. “The only Regenerative medicines – thing missing from our approach is therapies that replace or serious money,” he says. “One thing Dregenerate damaged cells, Calico has is serious money.” tissue and organs – that were once the According to the Burrill Report, domain of science fiction and alchemy a life sciences market analysis, are moving into the mainstream. regenerative medicine attracted $1.3bn “Ageing,” says the elegantly named of private equity funding in 2013. Aubrey de Grey, “kills 100,000 people “If we were having this conversation a day.” The chief science officer and co- in the mid-1990s about monoclonal founder of SENS Research Foundation antibodies,” says Jason Kolbert, head may sound and, with his flowing auburn of healthcare equity research at Maxim hair and beard, look like a 19th-century Group, the investment manager, “you man of letters, but he is one of the could have said, ‘Is there really a business world’s foremost experts in this most here?’” But then in 2012 a company hubristic of sciences: curing death. that had started life as a micro-cap was

SRF, a US-based not-for-profit acquired for $11.2bn. That company was organisation that researches Pharmasset.

rejuvenation biotechnologies, is not interested in age-retarding medicines or squeezing a few more years into our The nexT major advance allotted lifespans. De Grey’s mission is in“bioTechnology is “ to reverse the accumulation of damage in human cells that starts when we are going To be cell Therapy born and kills two-thirds of the world’s population. And he is not alone. In 2011, researchers from the Mayo Clinic, another US-based medical Today, Gilead, its acquirer, “is talking research group, published research that about knocking out hepatitis C with was hailed by the journal Science as a one pill, once a day, for about six weeks top 10 breakthrough of the year. As cells – an amazing medical advances,” says age they stop dividing normally and Kolbert. “The next major advance in become senescent, secreting damaging biotechnology is going to be cell therapy.” proteins that can impair healthy The biggest commercial player in cells around them. The team’s work regenerative medicine is Mesoblast, with mice has shown that removing based in Melbourne, Australia, with a senescent cells slows down the ageing market capitalisation of about $2bn. process and may lead to a revolution in Mesoblast has been developing the the treatment of age-related disease. therapeutic use of mesenchymal Last September, Larry Page, chief Hard cell: precursor cells to improve survival executive of Google, announced 60,000 stem rates after heart attacks. “Five years the formation of Calico, a start- cell transplants after a myocardial infarction, 50 up focused on reversing ageing. It are performed per cent of survivors are dead,” says is headed up by Arthur Levinson, annually Robert Margolin, a spokesman for the formerly chief executive of Genentech, worldwide to Alliance for Regenerative Medicine, the biotechnology company. While treat cancer the Washington-based advocacy

48 |ft.com/wealth

large-scaleTrials de“pend on The “ commercial secTor

organisation. “Mesoblast’s Phase III trial Tissue engineering is already here. is due to report at the end of this year.” harvard Apparatus Regenerative Other biotech companies are Technology, for example, was involved conducting promising research. Athersys in the treatment of a Russian ballerina has discovered stroke patients who have whose throat was crushed in a car had their spleen removed fare significantly accident. She received a synthetic better than those who have not. “The trachea made from a porous plastic spleen sends inflammatory cells that cause scaffold seeded with the patient’s own secondary damage,” says Kolbert. bone marrow cells. “Athersys has shown that if you administer Making complex organs such as allogeneic stem cells intravenously in a hearts or kidneys is not a prospect in 24-72-hour window post-stroke, they the near term and de Grey estimates limit the ischaemic damage.” the timeframe for his work on reverse AlloCure is trialling the adoption ageing is 20-25 years at least. of allogeneic stem cells to treat kidney While government funds, such as disease and MesoStem has pioneered a the $3bn of US taxpayers’ money that therapy using autologous bone marrow has gone into the California Institute stem cells to treat heart attack. Later for Regenerative Medicine, supports this year, Stem Cells will report results early-stage research, “large-scale trials of a therapy that seeds new cells in the depend on the commercial sector”, says space behind the retina to treat dry Margolin. macular degeneration. Kolbert says institutional investors According to the ARM, 60,000 are backing these new therapies, but stem cell transplants are performed not everyone embraces a future where annually worldwide to treat cancer. all body tissues and organs can be Within a decade stem cell therapies repaired or replaced. “People get very are likely to become “the standard exercised by the potential problems of care”, says Kolbert, in treating posed by theoretical immortality,” says diabetes, cardiovascular disease, stroke, de Grey. “But we all agree it’s good to neurological disorders, wounds and soft keep people healthy irrespective of how tissue damage. long ago they were born.” W

the incredible jellyfish that refuses to die First discovered in 1883, turritopsis is a tiny jellyfish, the size of a fingernail, found around the world but native to the Caribbean. In 1996, a group of scientists in Italy and Switzerland published a paper describing something remarkable – and so far unique – about the 5mm-long medusa. In crisis – if it is injured, starving or suddenly exposed to hot or cold temperatures – the jellyfish can reverse its normal life cycle and regress back to a juvenile polyp. Cells undergo transdifferentiation – the process by which they can develop into specialist cells – epidermis, muscle, sensory and so on,

GETTy just as human stem cells do. The so-called immortal medusa is the only known y/ organism that can trigger an ontogenetic reversal. So does turritopsis die? The tentative scientific consensus is it does not. Senescence (cell ageing) appears to stimulate the reverse metamorphosis that returns turritopsis to juvenile polyp status from where the life cycle can start over. There are many mysteries about how this process works at the cellular level. Shin Kubota, associate professor of invertebrate zoology at Kyoto University in Japan, believes one day it will have enormous significance for humans. Aubrey de Grey, chief science officer of SENS Research Foundation, disagrees. “Turritopsis doesn’t have a central nervous system and I don’t know about you,

PhOTO: SCIENCE PhOTO LIBRAR but I am rather fond of my central nervous system.”

ft.com/wealth|49

planning

property Rock is thRiving because of, Ra“theR than in spite of, “ its populaRity with visitoRs

whose ancestors once filled the pews in Cornwall’s conundrum the village churches. In the past 20 years the village of Rock, within the parish, has become synonymous with the image of wealthy amie Mercer runs the BY Ben This is St Minver, the parish that holidaymakers from the southeast Fourways Inn, as his father woodhouse hit the headlines for having the squeezing out locals and, in the winter did before him. His family highest proportion of second homes months, leaving villages empty. has lived in the same village in Cornwall, a county in the most But while it might be easy to portray for more than 100 years, but southwestern tip of the UK. Nationally the situation as locals ready to take now he is worried about the 6 per cent of properties are second up the pitchforks against the wealthy Jfuture and whether the pub homes; here the number stands at carpetbaggers in a bid to preserve the will last long enough for his son to 42.9 per cent. culture and heritage of the place, the take it on. “When I was a kid I would It is this kind of figure that will incomers are largely welcomed. In the RSoNS/I-IMAgeS PA walk to school and all the houses were resonate in many picturesque rural past 30 years, Rock has developed a occupied. Now they are all empty. communities that have seen house thriving community because of, rather There are so few locals left.” prices rocket out of reach of the people than in spite of, its popularity with PHoToS: joHN SUCH; ASHley CooPeR/AlAMy; ANdReW

50 |ft.com/wealth her life. “letting agents, cleaners and contractors are all in demand.” But it is this legion of workers, just over 10,000 strong in North Cornwall, who are being priced out of the area. local builder Brian Hawkey says more than 80 per cent of his trade comes from second-home owners, which in turn allows him to employ 13 skilled craftsmen – yet he says they can’t afford to buy a home for their families. Picture-postcard earnings here fall far short of the views: the £300,000 needed to buy a family village of Rock, home, yet the county council scheme to including the provide homes prioritises those in acute Fourways Inn, need from across the county as a whole, below left with a waiting list of up to six years. “Those in need of housing most in the parish don’t qualify for social housing,” Mould says. “So where social housing Rather than Cornish cultural has been built, it is people from outside heritage dying out, in some respects the immediate area who are moving in.” it is being revived. Rock Rowing Club This is the conundrum facing is preparing for the World Pilot gig planners: how to allow for continued Championships in May. once the investment and meet the needs of means by which men would row out a workforce caught between being to guide tall ships into the estuary, the outpriced by the market yet earning too practice had all but disappeared, but much to qualify for social housing. now the club is thriving. Cornwall county councillor Andrew

“This place needs the tourists Wallis has been lobbying government and second-home owners,” says Alex to change planning regulations to Roades, a cheerful estate agent whose force people to apply for permission

Rock office has half a dozen homes for to change houses from a primary to sale at more than £1m each. “Before tourism, Rock was nothing: those most in need of a load of sand dunes, no industry. The “ village has more of a community now ho“using don’t qualify than ever because of the nature of the market. There are more residential foR social housing homes here and a growing population as a result of the large number of second homes and holiday lets. visitors. This extends from the leisure “Holiday homes may look like regular a secondary residence, to limit the activities based around the golf and homes and you could live in them, number of second homes, but critics sailing clubs to supporting a thriving but essentially they are commercial warn it would further skew the housing set of shops and two art galleries. buildings.” Visit Cornwall, the tourist market and raise prices even higher. In 1994, local businessmen Bill board, calculates overall spending, Mould wants to see more power over Sharp set up a brewery in the village including rates and maintenance, on neighbourhood planning devolved to a that became a national success story; it second homes in North Cornwall is local level and points to the localism now has 115 employees and increases more than £8.5m a year – double that Act, which cedes more control for production year on year. In 2011, the of any other Cornish district. planning decisions to local people. company was bought for £20m by An entire industry has sprung “It is about balance. our whole Molson Coors, the Canadian brewer. up around second homes. “We have economy is dependent on tourism; The restaurant of two-Michelin-star gardeners coming out of our ears,” we need to provide for that,” she says, chef Nathan outlaw brings further jokes Carol Mould, parish council “Rock has always been a unique place prestige to the village. chairman, who has lived in Rock all and it needs a unique solution.” W

ft.com/wealth|51 book review AmericAn tAx resisters

On the fiscal front line

BY daniel Ben-ami

ew people like paying taxes, but there are some individuals, particularly in the US, for whom active tax resistance is central to their identity. It marks them out Fas deeply sceptical that Big Government can play a positive role in people’s lives. It also signifies their hostility to the redistribution of income and wealth. Tax resisters see progressive taxation as inherently unjust. If tax resisters – usually depicted as hard-line conservatives – constitute one end of the political spectrum, it is no surprise their opponents argue the opposite. Those who favour relatively high taxation, an extensive system of entitlements and redistribution are normally dubbed as liberals in contemporary parlance. It is to the credit of Romain Huret, associate professor of American history at the University of Lyon 2 in France, that he puts the tax debate in this broader context. Tax is not just a fiscal matter but is often at the heart of political debate and competing conceptions of social justice. Most of American Tax Resisters is a narrative history of US tax resistance from the civil war of 1861-65 to the present day. Federal taxation has increased enormously over that period, but there has been much ebb and flow. The 16th amendment to the constitution, adopted in 1913, was a high point of the progressive era of the early 20th century: federal income taxes were made explicitly constitutional. Progressive taxation also enjoyed widespread support between the second world war and the late 1970s. During that period it was seen typically as a sign of social solidarity, with the rich happy to give support to the poor. Irving Berlin even wrote a song, “I Paid My Income Tax Today”, in 1942. He donated the copyright to the Treasury.

52 |ft.com/weAlth le companies, tact av against in demonstr a opinion: of Spectrum evr below Denver, Pa ft oidance Ne rt n a and ; c by ics rts in protest y w Yo ta at x rk Te ion a go an towards scepticism debates, century 21st- and 20th- the in that, go federal powerful a than the of role the on constitution the in emphasis much so helps socie in role limited a play iea iwthat view liberal classical the upheld – are equal” men created “all that held who – fathers conser of than liberalism classical of characteristic more historically was ic eoetefis ol war. world first the before since fundamentally shifted has “liberalism” Fo terminolog confusing the of result the debate. the of elements population. non-white the majorit the far by represent taxes high relatively favour who those balanced. text fairly his is of body main the but taxation, debate. the of terms the shifted have but minority a remain manifestation, the including their for sympathy Ge and Reagan Ronald notably presidents, Some character. progressive its and taxation of level the against campaign concerted a mounted have resisters dit similar a composing eto of affluent section most and white the of narrow interests the to resistance tax linking is eneti o inherently not is vernment vernment. ntne h enn of meaning the instance, r reWBush, W orge cpiimaotBig about Scepticism Ho Hu It shr oiaieanyone imagine to hard is ex wever, e lal aor progressive favours clearly ret vat li h hr was there why plain s.Aeiasfounding America’s ism. US ex ’s Hu It socie esv oefor role tensive Te rgnlwording original ieo-et hieta energised that choice life-or-death a In reinvigor I h pos the “In h QUote the lofollows also a e oversimplifies ret go ex hi ht idecaswrd hymd federal made they world, middle-class white their st Pa Hi ty go enetshould vernment rse considerable pressed at rt yimplication By . s es als. sislatest its as y ke ty Th rat at innov y Go Ta TH MI TA toda db conser by ed ty tw si partly is is her “ y, vernment resisters, x . ryas the years, ar Th including NO X y. E at at Tax ion RE key TE RI y. SI vat RM TY v e n oe iigi h suburbs. the in living women and men ive ST ta won. have taxation higher favour rhetoric, who of those terms in not if practice in ra embraced openly century 20th early the resisters. tax Mo the as white and elitist as often were elements Such taxation. high for indeed favoured, elite American the in forces or enlightened itself in tr resistance. tax of 2012, years in many cent despite per 39 about to 1900 in US term. Hu American countr low-spending and tax low conser resis x OF S BU av ilpltc n eugenics. and politics cial ER Finally, Fo No re tst st go nrae rmudr8prcent per 8 under from increased le ogwyfo t rgn sa as origins its from way long a elled t( To be r enetfne yrelatively by funded vernment sspotfrlarge for support is r vat T ta st iigy ayporsie of progressives many rikingly, Ha S tal $29.95/£22.95 l upr,asbtnilrole substantial a support, ill 2012) tt c oeetwas movement nce ev Fe of author the is writer The v ntepoe es fthe of sense proper the in ive Ta rv HA Hu ro os,the worse, or er go RE TH rrsfrAl(oiyPress (Policy All for rraris r seto life.” of aspect ery ard yRmi D Romain by Resisters, x enetsedn nthe in spending vernment e al oraiethat, realise to fails ret VE MA Un E ft .c iversity DE om SH IN ra dical. /w BA US ta go Pr A IF eA xes vernment s,20 ess, has TE Po TE “ lt y. werful h| D 14) 53

PHOTOS: GETTY; REUTERS

car review

alfa romeo 4c Its compact dImensIons ma“ke the car easy “ to place on the road

Pocket rocket

he rain streaked down BY rohit jaggi Alfa Romeo’s strictly two-seat 4C That ground-hugging stance makes as the road dived away photographs BY certainly has striking looks. Hints of the car look like it has just come off a steeply from the ridge charlieBiBBY exotic Italian cars such as the Alfa racetrack, and makes any owner look as of a West Sussex hill. Romeo 33 Stradale of the 1960s and if they would be at home on the most Just slight pressure on the Lancia Stratos of the 1970s can demanding of circuits. the steering wheel kept be seen in the composite bodywork Those compact dimensions also Tthe Alfa Romeo 4C on that covers the mid-engined, carbon- make the car easy to place on the road, the right line, though. A gentle nudge monocoque chassis, its passenger but they do have drawbacks: the car is of the gearshift paddle provided the compartment set forward and fronted quite difficult to climb into, the doors power to thrust the car toward the next by a sweeping crescent of windscreen. are small and the sills that have to be bend. I am a big fan of small cars, crossed to reach the seats are wide. Such racer-like direct steering is a especially on Europe’s overcrowded But once installed in the adjustable rarity on road cars, even stripped-back roads, and the 4C is tiny – less than driver’s seat, there is a wealth of visual sporty models such as the new Alfa. It 4m long and 1.9m wide, and just and tactile clues to remind you that sets the tone for the whole character of 1.18m high. Those dimensions, far this car is focused on the dynamics the car – delivering positive as well as from making it appear insubstantial, of driving, rather than simply getting less desirable attributes. reinforce its racer-like credentials. from AtoB. The carbon of the chassis

54 |ft.com/wealth View a video of Rohit Jaggi driving the Alfa Romeo at ft.com/alfa4c, and a slideshow at ft.com/wealth

timely, and for sudden overtakes a pull of the paddle lever to change down is all it takes, with the gearbox reverting to auto just when you would want it to. And there is always full manual control available if needed. The brakes also feel race-bred. A firm push on the pedal is needed, but again they benefit from the car’s low weight, delivering a fuss-free 1.25G of deceleration. Stiffer suspension, which comes with 18-inch front and Racy looks: the 19-inch rear wheels (one inch bigger 4C’s composite than standard) as part of the race bodywork package, means the 4C corners with hints at exotic no discernible list. It is not a car for Italian classics grandstanding, though, and tackles of the 1960s corners with efficiency rather than and 1970s smoking tyres. But at the pinnacle of the track-

orientated attributes is the steering. Unfashionably unassisted by any

means, hydraulic or electric, it is as direct and full of feedback as the the 4c tackles corners single-seat racers I have driven. “ This can be too much for the road, WI“th eFFIcIency rather however. The race package-equipped 4C tends to signal every surface than smokInG tyres irregularity and raised painted line, making the car feel as if it is twitching and writhing. That in turn means it is a car to keep on a tight rein. Add included in the £3,000 race package to that the noise generated by is a flat-bottomed affair that smacks of the turbocharger and serious intent. the sports exhaust, Also included in the race package which drowns is a sports exhaust that makes itself out the audio heard as soon as the high-tech but low- system even capacity engine is started. at full volume, One thing missing is the satisfaction and the overall of moving the gear lever into first – the effect is far from gearbox is a dual-dry-clutch six-speeder relaxing. with manual and automatic actuation, StatS For about the same price, the two- plus four driving modes ranging from PETROL ENGINE: seat Porsche Cayman, the latest version “all-weather” to “race”. But press a Turbocharged, of which has electric power steering button on the central console and the all-aluminium, that delivers ample feel, provides electronics take care of the rest. 1,750cc, 240hp refinement as well as thrills. An unladen weight of just 895kg FUEL ECONOMY: But Alfa Romeo reckons as many as means the 240hp, 1,750cc, direct- 41.5mpg 75 per cent of buyers of this limited- is left exposed down at foot level and injection, turbocharged engine can use (combined cycle) run model, built in the Modena factory the no-nonsense dashboard feeds you more of its energy for providing thrust TOP SPEED: of Fiat Chrysler group stablemate information in one quick glance. than merely overcoming mass and 160mph; Maserati, will use it on the track. At the end of the passenger’s inertia, as is the case for many current 0-62mph in As a second, third or even fourth car footwell is a hefty aluminium footrest sports cars. The combination of motor 4.5 seconds in the garage of owners, to rekindle the that matches the pedals in front of the and drivetrain gives an involving ride – PRICE: from raw, racy heritage of Alfa Romeo, the driver, and the leather steering wheel left in automatic, the gear changes are £45,000 4C is right on the money. W

ft.com/wealth|55 lIfeStYle RohIt JaGGI

We may not be able to taxi up to the Beating about the bush front door of the lodge, but the reward for a 15-minute drive from the Bela Bela airfield, where we have left the ook carefully below you for PHOTOGRAPHS inquisitive wildlife. The low pass plane, is to climb straight on to an open warthog holes, termite hills BY JAMES OATWAY persuades a family of monkeys to stay Land Rover for a dusk view of some of and patches of soft ground. AND BRIT LEISSLER off the strip; then I circle back, stay the reserve’s inhabitants. But don’t forget to fly the high until I am sure I can make the Pioneer Moyo, the knowledgeable plane.” Karl Finatzer’s landing work, and touch down between guide, puts the charmingly ancient words run through my the lumps and bumps. four-wheel-drive almost within touching Lmind as I fly just 50ft above At the top end of a steep gradient, distance of stately giraffes and skittish the uneven dirt runway, trees flashing with the engine shut down, what falls zebras. We stay further from the rhinos, past my wingtips and a steep hillside is not silence but a carpet of bush noise but herds of impala seem unperturbed by looming above my shoulder. – bird calls, insects, including almost the Land Rover, though they maintain a The head of SkyAfrica, South aircraft-sized flying beetles, and the respectful distance from the wildebeest. Africa’s longest-running aerial safari scuffling of feet and paws across the The Edmonds used to farm game company, was describing how to dirt. I watch through the heat haze as but now leave the care of the animals inspect remote, unmanned airstrips the monkeys cross the strip. But the and land to their business partners. to make sure they are safe to land rhinos that have been spotted recently Over a barbecue dinner that includes on. One very low pass over the strip are nowhere in sight. both warthog and impala sausages they and its windsock should give enough The wildlife at Kunkuru Lodge, does describe the rewards of rearing some information about the state of the not disappoint, though. A base of Africa’s most iconic animals. But runway and the wind direction – and for pilots doing SkyAfrica’s they also talk about the drawbacks that scare any animals off the runway. bush-flying course, the lodge is led them to give up game, including “Except giraffes,” says also a destination in its own right. John rhino poachers organised enough to Finatzer. “They Edmond and his wife Teresa own, with use helicopters for swoops to slaughter just stand there two partners, a 2,300ha game reserve animals whose horns can fetch $80,000. and watch, even when you are near Bela Bela, less than an hour by SkyAfrica can put together a self-fly coming straight towards them.” air from SkyAfrica’s base at Brakpan tour of whichever parts of southern Small aircraft and rough runways airfield near Johannesburg. The Africa you want to visit, organising crudely carved out of the veldt are the Edmonds at their previous farm hosted paperwork and permissions, and perfect way to explore the vastness hundreds of pilots doing aerial safaris renting you a plane from its fleet of of southern Africa and its riches of with, John proudly points out, only two four- and six-seat Pipers and Cessnas scenery and animals. But the first step accidents, neither fatal. if you don’t bring your own. Lodge for most pilots is to brush up, or learn The Edmonds’ experience highlights accommodation can range from the afresh, their bush-flying skills. another of Finatzer’s warnings: comfortable to the indecently opulent. These include how to read the despite a perfect blue bowl of a sky, he The company also puts together terrain and signs of animals. For stressed that the weather was the most packages for non-pilots, called African example a small hole made by a capricious of Africa’s flying hazards – Sky Cruises, using a Piaggio P.166S that warthog in a landing strip is likely to be beyond even warthog holes and giraffes. seats four passengers comfortably and evidence of a much larger excavation So it was with the new strip at has large windows for sightseeing.

just under the surface that could easily Kunkuru. After days of being cleared, My mastery of landing on and swallow a light aircraft’s wheel and filled and levelled, the surface was taking off from bush strips is growing. possibly the undercarriage leg too. cut into rivers, streams and lakes by a But Africa has an important lesson to

As we skim low over the surface particularly heavy rainstorm. reinforce: thick cloud and torrential in one of SkyAfrica’s Cessna 182 rain force us to land at a small private high-wing four-seaters, the first strip giraFFes JusT sTand and strip, but the owner offers the free use highlights a few potential pitfalls. “ of his car to finish our journey. Situated in the Waterberg hills of wa“Tch, even when you are Experiencing remote Africa by air is northern South Africa, Rundubundu coming sTraighT aT Them definitely the way to do it. But without undulates. It has a big hill at one tuition in what to expect, it can easily end, its red dirt surface is uneven turn from safely intrepid to difficult – and scattered with rocks, and it has and dangerously foolhardy. W

56 |ft.com/wealth

The weaTher is The mosT capr“icious hazard, beyo“ nd even warThog holes

View a video of Rohit Jaggi flying out into the African bush at ft.com/flying-safari, and a slideshow at ft.com/wealth

The rough and the smooth: after some tuition to prepare for the dirt landing strips, pilots and their passengers will be rewarded by the splendour of the Waterberg hills

ft.com/wealth|57

THE BUSINESS GURU MY MANY INTERESTS “ TODD RUPPERT AR“E JUST DIFFERENT PIECES OF A PUZZLE

In for the long haul

odd Ruppert is chief BY FEARGUS says, ‘Why should we be spending first of all comes the client, second executive of RTR O’SULLIVAN money on training all these people if is the employee and third is the International, a company PHOTOGRAPH BY they leave?’ A visionary, on the other shareholder. You might wonder how he founded in 2012 after CHARLIE BIBBY hand, says, ‘What if we don’t spend that could be in a publicly traded 27 years at T Rowe Price, money on them and they stay?’ firm, but if you do a really good job the global investment “When I started working at in the first two, the shareholders will Tmanagement firm, where T Rowe Price, we hadn’t been working be very well rewarded. If you look at he ultimately became chief executive with clients outside the US, as we the shareholder base at T Rowe Price, of T Rowe Price Global Investment had a joint venture with Fleming it’s a $20bn-plus market-capitalised Services. Family and Partners in the UK that company and the shareholders have Based in Baltimore, Ruppert played prohibited us from doing business been very well rewarded by holding out a key role in transforming T Rowe internationally. I think I was for the long term. Price into a global business with more a leader – not the only one “My work at T Rowe Price was like than $600bn under management. – in creating a more global having one main course. Now with all Now involved with a diverse portfolio mindset at T Rowe Price. Our the different areas I am involved in, of businesses, educational institutions joint venture with Flemings it is like I have a plateful of different and arts organisations – venture capital ended in 2000, but I tapas. Some things remain constant firm Greenspring among them – started travelling and nonetheless. It is never easy to grow Ruppert is also a founding member of looking globally something, but it helps when you have the Duke of Edinburgh’s Award scheme in the late 1990s, a collaborative culture – and I spend in the US and president of the Royal in anticipation of a lot of time on communication and Parks Foundation (USA). the opportunity collaboration. In an organisation you “I have an enormous appetite to at some point of don’t compete with people internally – pursue a lot of different, intellectually growing T Rowe you compete externally and try to build challenging things on a global scale – Price globally. a very healthy and strong culture. That my many interests are just different When that way you develop something that you pieces of a puzzle. I am on the boards opportunity are very proud of. of companies in China, Singapore, the presented itself, “For entrepreneurs starting up United Arab Emirates, France – all over the firm had the today, I would warn that sometimes – ranging from education to finance, confidence to let people can be so driven that they miss healthcare and pharmaceuticals, digital me start that up the human element. Over time people technology to financial technology, and now T Rowe won’t always remember what you did software and digital media. Price has offices all for them but they will remember how “I am just passionate about this over the globe. you made them feel. I also believe that stuff. I don’t think there is anything “T Rowe Price if you’re building a business, happy special about it. I just do things I really was independent for people are more productive. You get enjoy and once you get involved with a long period of time. more employee loyalty and better work them they become part of your being. It was publicly traded, from them by being upbeat and having I find the confluence of activities and but the firm had a lot a sense of humour than by being a issues also extremely helpful. I have of equity ownership taskmaster. It is human nature to want learnt stuff in education that has among the employee base instant gratification; it takes a lot of helped me in the pharma space and – almost 100 per cent of the discipline to think long term. vice versa, so that’s fun. employees participated in the “One of the core issues of the “The key link between these stock purchase programme. financial crisis is that participants companies is that they are disrupters. There was a very disciplined didn’t have an economic interest in the Disrupters are led by people who are committee that ran outcome. When you have skin in the visionaries. There is a great quote out the organisation, but game, you are less susceptible to short- there that is funny and somewhat true: there were three termism. You are more likely to embrace the difference between a visionary and principles drilled long-term optimisation over short-term an accountant is that an accountant into everybody: maximisation, which is healthier.” W

58 FT.COMWEALTH