FTwealth game of thrones remigius kanagarajah is head of the royal house of jaffna. the problem is the monarchy was overthrown in 1621. what next for the world’s lost sovereigns? emma jacobs reports www.ft.com/wealth sprING 2012 Ft WEALtH spring 2012 it is a thorny question:“ wh“at should former royals do next? covEr pHotogrApH Kings and communities by jEroEn boumAn Special reports editor Michael Skapinker Editor Hugo Greenhalgh Senior editors Jerry Andrews, Robert Orr Art director Sheila Jack Picture editor Krissy Hodgkinson Visual consultant Ed Robinson Production editor Jearelle Wolhuter Commercial director, EMEA Dominic Good Advertising Ceri Williams, Rachel Padhiar Publishing systems manager Andrea Frias-Andrade Advertising production Denise Macklin contributors Daniel Ben-Ami is a freelance journalist Yuri Bender is editor-in-chief of Professional Wealth Management James Crabtree is the FT’s Mumbai correspondent Ian Driscoll is a freelance journalist Simeon Borisov of Saxe-Coburg-Gotha had the best solution. Having Matthew Garrahan is the FT’s Los Angeles briefly been King of Bulgaria – aged six – in the 1940s before fleeing correspondent the communists, the prince returned to power in 2001, but this time Emma Jacobs is the FT’s assistant business through the ballot box. Despite a fairly unremarkable four years as life editor Rohit Jaggi is the FT’s aircraft columnist prime minister of the country, he did at least solve that thorny question James Mackintosh is the FT’s investment editor of what former royals should do next. Jonathan Moules is the FT’s enterprise After the second world war, Europe was awash with dispossessed correspondent royals. The remnants of the Romanovs were parked in Paris, and Sarah Murray is a freelance journalist Vienna was seemingly stuffed with Hungarian and Polish princes. But Chris Newlands is managing editor of Ignites Europe as we move deeper into the 21st century, and further away from the age Feargus O’Sullivan is a freelance journalist of deference, a title can now be seen as an encumbrance, an embarrass- Matthew Vincent is the FT’s personal ment. “A title would put some people off and attract a lot of the wrong finance editor people,” Emma Jacobs reports David Gigauri, a Georgian prince, as Lucy Warwick-Ching is the FT’s online Money editor saying. “Many would see it as a joke.” Stephen Wilmot is property writer at So might Patri Friedman, grandson of Milton, and founder of the Investors Chronicle Seasteading Institute. Backed by PayPal co-founder Peter Thiel, its libertarian aim is to found self-sufficient communities free from pesky governments. Matthew Garrahan asks whether this represents a vision of the future – or simply a dream of the ultimate free market. As always, we welcome your views and opinions at the address below. Hugo Greenhalgh, Editor [email protected] 6 |Ft.com/WEALtH contents 56 openings 46 8 investment focus News and statistics, and comment by mark mobius 10 the ideas column Why boring can sometimes be best when it comes to returns 12 the rich column how to move abroad without 9 getting mired in tax features 14 new silk route to singapore china’s wealthy are pouring into 14 the city state, as the country tries to position itself as the Zurich of insight the east 36 equities 18 blighted benevolence three-card monte and hedge funds india has taken corporate social 40 philanthropy responsibility to heart. James how to be good – and make a crabtree reports from mumbai on difference how csr is benefiting both the 42 non-profit boards public and the corporates Joining the board of a charity or Ngo can be the way to get involved 24 lost kingdoms 44 boiler room scams What do royals do after they are chris Newlands reports on how the deposed? emma Jacobs reports on city of london has been hit by a the scions of royal houses making recent wave of share frauds their way in the real world 46 paparazzo economics how much is a picture of a celebrity worth nowadays? 48 ask the expert ft wealth online ana armstrong discusses the likely impact of inflation video 50 how i made it in flight: rohit Jaggi test-flies gordon “butch” stewart discusses the calidus gyroplane how he built up sandals, the luxury video resort company car review: rohit Jaggi 52 book review takes the porsche 911 the ajax dilemma by paul Woodruff carrera for a spin 54 car review indices the porsche 911 carrera price check: fine wine, 56 flying high classic cars and art, a flight test of the calidus gyroplane with analysis 58 my liquidity moment martyn dawes, founder of coffee www.ft.com/wealth Nation photos: charlie bibby; getty; dreamstime; xposure ft.com/wealth|7 INVESTMENT FOCUS LUCY WARWICKCHING THE ROAD AHEAD Is the eastern boom MARK coming to an end? MOBIUS he Chinese New Year slowed, it is still expected to nudge To the Chinese, the year of the dragon festivities at the start of 9 per cent. But an oversupply of $17,300 is associated with great deeds and big the year of the dragon property has seen investment in this – average spent projects. Yet this cuts little ice with proved even more spec- sector fall 40 per cent in December by wealthy on big some investment analysts. They point tacular than usual. But compared with the previous month. ticket purchases to reduced GDP growth figures and a fears of a hard landing November also saw unsold property severe market correction in 2011 that Tfor the world’s second- stock rise 26 per cent. SOURCE: sliced 18 per cent off the MSCI China biggest economy have left some The fundamental outlook on SCORPIO index. But the situation looks better experts reluctant to join the party. China remains positive but it seems FUTUREWEALTH now. People ask me if China is going to China has been the growth story of almost nowhere is immune from the REPORT 2012 have a soft or hard landing. My reply is the 21st century and early investors debt problems in Europe and the US. that China is going to continue flying. have reaped handsome rewards. But A problem for investors is that the Even if you consider the expected is the boom over? Hong Kong’s Hang rate of economic growth in China has contractions, it is still one of the fastest- Seng Index fell 20 per cent in 2011 not been reflected in returns. While growing economies in the world. From and the Shanghai Composite Index is there are opportunities, investors a stock-picking perspective, the market down a similar amount over the past must not get sucked into the hype and correction has also presented some year. While economic growth has invest too heavily in the region. compelling investment opportunities. We continue to see the drivers of the economy as consumerism and com- modities. With a population of 1.3bn, rising per capita income and a strong demand for consumer goods and ser- vices, the earnings growth outlook for stocks linked to this theme is positive. Over the past quarter, inflationary pressures eased and the industrial sec- tor recorded strong growth. Commod- ity stocks continued to look good, and we expect global demand for commod- ities to continue its long-term growth. When considering the impact of a possible global recession the situation looks positive. First, many emerging markets are still growing rapidly and 20% RISE IN we do not expect them to slow over the REQUESTS FOR next decade. Second, the situation in Europe can be worked out and likely PRIVATE TUTORS reforms there will bode well for the FOR CHILDREN global economy. W SOURCE: COUTTS PRIVATE BANK The writer is executive chairman of the Templeton Emerging Markets Group 8 FT.COMWEALTH 18% OF WEALTHY INDIVIDUALS SEE “ VI“NTAGE JEWELLERY AS AN INVESTMENT SOURCE: HISCOX 90% – of wealthy house- Investing in... holds in the US have women as either the sole decision maker or an equal partner in decisions China about charitable giving SOURCE: BANK OF AMERICA MERRILL LYNCH What is the fund? Performance over the past two years The Jupiter China fund, run by Philip (Chinese mutual funds, total return basis, Ehrmann is an open-ended unit trust % to end of January 2012) structure holding Chinese com- I wish I had bought panies. Its top 10 holdings include Aberdeen Global - Chinese China Mobile and Shanghai Electric. Equity A2 Acc Why should I buy it? 28 First State Greater China Growth A GBP Acc After a troubled year, Ehrmann has ranked high in the sector over the Skandia past three months. Last year he 20 Greater China had to deal with a property Equity A bubble, rising inlation and outlows USD of cash from panicked investors, 19.5 but he believes Chinese equities will perform better this year as inlation eases. Ehrmann sees opportunities in companies delivering energy savings and environmental services -4.5 such as China Everbright. 17% – increase, up Premier Why shouldn’t I buy it? on last year, in China Performance since launch has been people eating Enterprise -11 poorer than the sector average, says out at steak Acc Tim Cockerill, head of collectives restaurants in Jupiter China Acc research at wealth manager Rowan London -11 Dartington. There is good value to SOURCE: COUTTS Henderson HF China A2 USD be had in China, he says, but that is PRIVATE BANK a long-term investment and periods I’m glad I didn’t buy of volatility are guaranteed. SOURCE: LIPPER 58% – of all adjustments to home insurance during January were due to adding items or increasing the sum insured of jewellery and watches GETTY; AFP; ALAMY; CORBIS; CHARLIE BIBBY.