Issuu

www.executive-global.com | Spring 2019

Productivity | Strategy | Profitability

FOZEIA RANA-FAHY

Bermuda offshore trusts and estates advisory

OLIVER FREIGANG

Disruptive private equity solutions

MICHAEL PENTO

The end of the 70 year bull market

+ BRIAN STUART YOUNG

Private offshore banking and profitability

RISK ADJUSTED SOLUTIONS Catherine O' Connor’s leading insight on delivering award-winning wealth planning services for affluent institutional and private clients

INSIDE

UK £4.50 Europe €5 USA $7

T H E U N D E R WAT E R V I L L A

Your Extraordinary Playground

A celebration of the Indian Ocean, this Villa will ignite the imagination with adventure to be had, local culture to be explored and soul-enriching discoveries designed with meaning and purpose. The Villa connects global wanderers to the pulse of the Maldives through an inspired experience that quenches curiosity and nourishes the senses. Arrive and transform, and indulge in the adventure that stirs within.

Supporting the resort’s philosophy of innovation and its dedication to creating extraordinary moments in the heart of the Indian Ocean. Tailored to the unique desires of different travellers with experiences ranging from adventure, food and entertainment to wellness, culture and sustainability, the menus are titled The Wanderers, The Flavors, The Soul and The Thrill. Guests who book this villa will work with a dedicated Reservations Team to curate their own journey, borrowing inspiration from the four menus to ultimately create a meaningful and personalised journey in the Indian Ocean and immerse themselves in a variety of transcendent experiences above and below the surface of the ocean.

Guests staying at the villa will receive four exclusive and customisable experiences that offers a transformative journey in one of the world’s most breath-taking natural environments as guests are fully immersed in the wonders of the abundant marine eco-system above and below the Indian Ocean. While pushing the boundaries of engineering, This Villa is not only defined by its physical structure, but even more so by the wholly unique offerings globally connected guests can enjoy while staying in the innovative residence.

Young travellers who stay at this villa will find that most experiences from across all four core menus are easily customisable to suit their interests as well as the opportunity to create entirely new experiences through the villas kids Edu-tainment menu designed to captivate their imaginations. The villa features clean lines and natural tones, which echo throughout the design; devoid of clutter, the architecture and interiors pay homage to simplicity, space, harmony and timelessness. Discover a paradise unlike any other. Go on, dive in.

The first of its kind, in a class all its own. A triumph of modern design and technology, this unique three bedroom two-level residence is an architectural marvel that sits above and below the surface of the Indian Ocean.

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OVER THE MOON, LEFT AT CLOUD NINE, JUST PAST SEVENTH HEAVEN. EASY TO REACH, IMPOSSIBLE TO FORGET. Few opportunities to own a piece of real paradise exist, yet Aqua Terra, is one such example of luxurious Exuma living at its finest. • Over 5,000 sq. ft. of meticulously decorated interior living space • 6 bedrooms with ensuite bathrooms • Oceanfront cabana, kitchen, powder room and lounge • 8’ x 8’ heated spa with spillover into 24’ x 24’ saltwater infinity pool • Hurricane-proof ICF construction Offered at $3.75 million, Aqua Terra is the ultimate island sanctuary for the discriminating investor.

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CONTENTS

SPRING 2019

EXECUTIVE GLOBAL

EDITOR-IN-CHIEF John Marshall HEAD OF PRODUCTION Peter Green EDITORIAL Thomas Hughes, Rachel Smith, Oliver Taylor, Shannon Berkley ART DIRECTION & DESIGN Stormcues Limited BUSINESS DEVELOPMENT Steve Williams, David Warmann, Jack Moore, David Goldwin, Mike Walsh COMMERCIAL DIRECTOR Luke Francis PHOTOGRAPHY James Drake, Sarah Dean Executive Global Magazine is published by: Stormcues Limited 405 Kings Road Chelsea London SW10 0BB Tel: +44(0)207 993 4782 www.executive-global.com ADVERTISING advertising@executive-global.com EDITORIAL editorial@executive-global.com The information in this publication has been obtained from sources the proprietors believe to be correct, however no legal liability can be accepted for any errors. No part of this magazine may be reproduced without the consent of the publisher. Executive Global is registered trademark ® of Stormcues Limited. Copyright © 2019 Stormcues Limited. All Rights Reserved.

• Productivity, Strategy, Profitability

FRONT COVER FEATURE Risk Adjusted Solutions

Commercial banking 24

Our cover feature and CEO Profile on Risk Adjusted Solutions profiles one of America’s pre-eminent firms managing risk in our interview with Catherine O’ Connor, CEO of O’ Connor Portfolio Management LLC.

Disruptive technology

Michael Pento, CEO of Pento Portfolio Strategies on U.S. and global macroeconomics.

John Williams of ShadowStats delivers his expert outlook on MMT and the yield curve.

Four green houses one red hotel

The future of finance

Shannon Berkley reports on Robert Kiyosaki’s method of investing for cashflow.

Vladimir Remi, CEO of SORQ on helping commpanies navigate compliance headwinds.

LEGAL Bermuda offshore trusts

FINANCE

Yield curve and recession

We look at Qashqade, Zurich’s pioneers facilitating greater functionality for companies.

Executive Global’s bespoke series of interviews on Productivity, Strategy, and Profitability. Brian Stuart Young of Global Bank of Commerce, discusses Antigua & Barbuda’s offering.

Ignoring the business cycle

Making Africa great again

Rino Solberg delivers his insight into the role philanthrophy and ethical foresty play in Africa.

PROFITABILITY Banking in Antigua & Barbuda

Shannon Berkley reports on the impact of the Asia Infrastructure Investment Bank.

Our interview with MJM Limited explores opportunities for Bermuda wealth generation.

The tax authorities

Dr. Knut Olsen, chartered global tax adviser, provides his insight into international tax affairs.

Banking legislation in Serbia

Nevena Milošević and Miloš Velimirović of SOG Law speaks on banking legislation in Serbia.

CONTENTS

SPRING 2019

EXECUTIVE GLOBAL

FDI & INWARD INVESTMENT FDI and free trade zones

EXECUTIVE EDUCATION 44 Much more than business skills

Oliver Taylor’s report on free trade zones, investment promotion and FDI.

Sensational Singapore

46 Lingnan’s leading MBA Xu Xinzhong on why Lingnan’s MBA programme enjoys a stellar reputation.

GEOPOLITICAL AFFAIRS

LUXURY LIFESTYLE 48 Mercedes-Benz

Thomas Hughes looks at how UBI while idealistic, may perpetuate poverty.

One belt, One road

Andrew Main Wilson, CEO of the AMBA on surviving and thriving in modern business.

Rachel Smith reports on why Singapore has long been a unique business hub.

Robotics, despotism and UBI

Strand Hill Christie’s

50 The Greatest Luxury of All

A Brexit with a deal would leave all parties frustrated, according to Rachel Smith.

The City of Luxembourg

• Productivity, Strategy, Profitability

Unparalleled amenities

Audrey Ross on why this exquisite home in Coral Gables is the epitome of excellent taste.

From cottages to castles

Soren Jenry Petersen speaks on why 2019 may be a transformative year for Urban Jurgensen.

Diplomat International Realty understand all facets of clients needs when buying a home.

Lynne B. Wilson, has represented celebrities in luxury real estate ranging from $200K-$12M.

Bowery Road We look at one of the finest estates in Highlands, North Carolina in with stunning views of Whiteside Mountain.

Judy Hurlock on the beauty of a home near crystalline waters surrounding the Exumas.

South Florida’s paradise

Entrepreneur and hostess Lauren Berger on what makes great hospitality and service.

The problem with having a “deal’’ 52 The ONE collection

Discover a new kind of blue

Philippe Vermast on the most attractive places for people to buy and live in Luxembourg

Thomas Hughes reviews the Mercedes-Benz AMG Vision Gran Turismo concept car.

Rachel Smith, reports on the development of China’s Belt and Road Initiative.

Lily Liang, expert of the Palos Verdes Peninsula’s real estate market offers her insight.

1877 Bowery Road, Highlands, North Carolina, NC 28741

One of the finest estates available in Highlands! Highrocks features gated access to a large private 3.6 acre lot with stunning views of Whiteside Mountain, and the valley vistas beyond. The house is ultra quality, and features multiple stone fireplaces, water features, a custom dream kitchen to die for. The main level has a living room, dining area, master bedroom, and a Carolina room with fireplace that is accessed off of the kitchen. With antique wood floors, updated baths, the lower level has guest quarters with a media room and wine cellar. There is a large 2 car carport with guest efficiency above. A network of trails explore the landscaped grounds. Highrocks is an Eden in Highlands and will not disappoint even the highest of expectations.

Offered at $4,499,000

MLS Number: 83614 Property Type: Single Family Home Bedrooms: 4 Full Baths: 4 Half Baths: 2 View: Exceptional, Mountain

Contact Terry Potts Web www.ccphighlandsnc.com Email ccp4terry@gmail.com Office 828 526 2520 Cell 828 421 3417

EDITOR NOTE

Foreword

EXECUTIVE GLOBAL Editor’s Note

Basel III: The Day Gold Became Money Again On March 29th, 2019, the tremors of revolution ran through the world, yet few people noticed. No, not the type of revolution where myriads of protesters take the streets chanting slogans and calling for change. Not many understood the implications of Basel lll, which wasn’t extensively covered by most of the mainstream press. et its effects will inevitably shake up the foundations of the global economy and, consequently, every other aspect of our lives. Its results will roll in slowly, which is why they are still invisible to the public, but the consequences, nevertheless, will soon turn the world’s market upside down. Do not disregard this event and read on to understand what it could mean for you, your business and the world altogether. The revolution brought upon by Basel lll was led by the Bank for International Settlements. The Switzerland-based BIS directs the International Monetary Fund, which, in turn, sets the stage for most of the central banks around the world. The decisions made by the Basel Committee on Banking Supervision will dictate the actions of such organisations as the US State Department and the Federal Reserve, just to name a few. This is the real world power that very few speak about. What, you may ask, actually happened? The monopoly of the dollar, which was made possible by the events of the Bretton Woods system and the agreement’s subsequent dissolution by the Jamaica Accords in 1976, has finally come to an end. A bit of history: following the Nixon shock, the USD’s domination has terminated gold’s convertibility to the greenback and instead, established the dollar as the world’s reserve currency thanks to its new bond with the oil trade. Ever since then, gold became nothing more than a tradable commodity and a third-category reserve for the banks. That is until Basel lll has decided that gold will no longer be a third, but a first-category reserve. While gold’s previous tier let it be estimated at only 50%

executive global • Productivity, Strategy, Profitability

of its value, it is now returning to a full 100%. This, inevitably, leads to a revaluation of the balance sheet. What does it mean for the global market? Truthfully, for the next few months, it will bear little to no consequence in the world. This revolution is a slow one. However, seeing as the nations with the largest gold reserves will be adjusting to the new values, the price of gold is inevitably going to increase (read: skyrocket), while the reign of the petrodollar lives out its last months. That explains why countries like China and Russia have been vigorously accruing their gold reserves for all these years. Consider this: since the USD and petroleum are well-nigh inseparable, the price increase of gold will also raise the price of oil. This increase will crash the current system where the majority of the dollar supply permeates stocks, bonds and treasuries. Experts say that we should expect to feel the effects of this change by autumn 2019, and so Executives should therefore position themselves to take advantage of the opportunities that a revaluation in prices may present to the prudent investor. EG

John Marshall John Marshall Editor-in-Chief, Executive Global

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Columbia County, WA / $1,400,000 / 755± Acres

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Waller, TX / $2,300,000 / 175± Acres

Montgomery, TX / $4,300,000 / 81,51± Acres

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JACOBS PROPERTIES 936.597.3301 / TXLand.com

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Ouray County, CO / $17,950,000 / 275± Acres

Sheridan, WY / $25,000,000 / 7,900± Acres

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TAYLOR LAND INVESTMENTS 979.245.6055 / TaylorLandInvestments.com

ARROWHEAD RANCH

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TEXAS RANCH BROKERS 512.756.7718 / TXRanchBrokers.com

WHITNEY LAND COMPANY 541.278.4444 / WhitneyLandCompany.com

Waller, TX / Price Upon Request / 381± Acres

Kempner, TX / $8,937,500 / 1,626± Acres

Southeast TX / $20,000,000 / 4,000± Acres

Troy, OR / $1,400,000 / 69± Acres

A M E R IC A N F A R M A N D R A N C H . C OM

Discover Lake Arrowhead Not Another One Like This Anywhere in Southern California ho would guess this Lakefront Showplace is only 1 hour drive from Los Angeles, or the Desert! There is not another Lakefront Estate W like this! Surrounded by water on all 3 sides. An entirely separate Guest House contains 2 Bedrooms, 2 Baths, Kitchen, Living Room with High 1/2

Ceilings and Fireplace. Double Canopied Dock with Pavilion and level access. Private Shoreline. Porte Cochere. Motor Court. 7 Car Garage. Room for RV Parking under Roof. Grand Foyer. Two Gender Powder Rooms. Reception Hall within the Residence. Ballroom size Living Room with separate entertaining spaces. Presidential Dining Room with mantled Fireplace and French Doors out to grand-scale Patio overlooking all points of the Lake. Gentleman’s Cigar Lounge and Sports Bar. Chef’s Kitchen. 4 Bedroom Suites and Separate Guest Wing with 4 Bedrooms, Kitchenette, Game Room and 2 Baths. This area has a separate entry for extended family or guests. The Master Suite is a self contained Apartment with 2 Fireplaces, Office, Mini Kitchen, Clothing Room and Breathtaking Lake Views! Sauna. Spa. Elevator. Cement Roof. Beautifully Furnished. Gated Totem Pole Point. Approx. 14,000 sq. ft. Text or Call Lynne B. Wilson 951-741-7117. $6,250,000.

Lake Arrowhead Office: (909) 337-2080 • Website: CottagestoCastles.net • Email: ResortHomes@aol.com YouTube Video: http://lynnebwilson.com/watch/

Self Sufficient Grand Estate Lake Arrowhead Mountain Resort... Southern California’s Playground for the Rich and Famous! ithin a gated community of a few other Estates, the spectacular Residence is walking distance to beautiful Lake Arrowhead. Architecturally Magnificent! W It took 4 years to build this Masterpiece. The meticulous Owner with famed contractor Ron Dolman orchestrated the construction of Belle Maison.

They selected the finest Artisans using the “ultimate” in materials. The stone, vintage lumber and antique timbers were impeccably chosen and fabricated on the property. The Landscaping of Giant Sequoia Trees, Spruce, Daffodils and Roses were chosen to compliment the circulating streams which meander the property ending in a pond under the glorious foot bridge. Stone and marble were imported from various quarries in France. Stone mason and artist Francois Leocadio hand carved all the stone. The roof tiles were manufactured in Fijac, France and imported by ship. Nearly 5 acres of manicured lawns and gardens. Approx. 9,000 sq. ft. Two 5,000 Gallon Water Holding Tanks. Deep Water Well. Solar Panels. 2 Generators. State-of-the-Art Mechanical Devices. 5 Car Garages plus additional Motor Court Parking. The entire property was designed to save energy and costs. Ideal for corporate conventions, weddings or fundraisers. Just 1 1/2 hour drive from Los Angeles, Palm Springs, or Newport Beach. Offered Mostly Furnished. $4,900,000.

Text or Call 951-741-7117 • Website: CottagestoCastles.net • Email: ResortHomes@aol.com Property Video: http://lynnebwilson.com/Belle

• YouTube Video: http://lynnebwilson.com/watch/

FINANCE

Pento Portfolio Strategies

Ignore the Business Cycle at Your Peril March 9, 2009, was one of the darkest days in financial history. The Wall Street Journal posed this ominous question: ”How low can stocks go?” The S&P 500 cascaded down to the frightening number of 666 on that date. Even the perennial bull-market cheerleader Goldman Sachs prophesied that the S&P could go as low as 400—another 40% plunge. Article by

Michael Pento

CEO, PENTO PORTFOLIO STRATEGIES

ut since that dismal day in March, the S&P has climbed to new highs—a gain of more than 300%. And so, the cycle of fear and greed continues. Fear eventually leads to complacency and then to avid greed, before returning to fear again. This represents the psychological aspect of the business cycle. The late 1990s was the dawn of the internet. From 1995 to 2000, the technology-dominated NASDAQ index rose from below 1,000 to more than 5,000. And for a time, the old metrics of profits, cash flow, and viable business models were replaced by hits, eyeballs and anything ending in .com. Investors were led to believe that we had entered a new paradigm. In the lead up to the Great Recession of 2008, investors again deluded themselves into thinking that since real estate values had never dropped on a national level, it was a green light for housing prices to grow to the sky. And that everyone should be qualified to take out a mortgage regardless of their ability to pay back the loan because they would always be able to sell the property at a higher price. Today, the new-new paradigm is that the government and central banks have become infallible. Economic growth, stock valuations, and balance sheets have become larg ely irrelevant. As long as central banks remain ready and willing to keep asset bubbles permanently

inflated, investors have nothing to fear. But then, for a fleeting moment, it appeared that central banks around the globe wanted to exit the business of an asset bubble levitation act. Perhaps it was out of just plain hubris; or because these money printers wanted to believe in their own success story. The Fed was raising interest rates and was draining its balance sheet. It had already increased interest rates nine times by 25bps increments. Meanwhile, the European Central Bank (ECB) promised to exit its Quantitative Tightening (QE) program in December of 2018. Even the Bank of Japan (BOJ) threatened to perhaps cut back on its massive Qualitative QE program. Global QE on a net basis reached $180 billion at its peak in 2017 but had turned negative at the end of last year. The air began to seep out of the stock market bubble. It was the same old story of which Wall Street seems to have a permanent case

THE AIR BEGAN TO SEEP OUT OF THE STOCK MARKET BUBBLE. IT WAS THE SAME OLD STORY OF WHICH WALL STRET SEEMS TO HAVE A PERMANENT CASE OF AMNESIA.

• Productivity, Strategy, Profitability

of amnesia. The Fed raises interest rates to try to slow down the inflation it created in the first place and to put a cap on runaway asset prices. As rates rise, the money supply begins to dry up and causes growth and inflation to slow. Long-term rates then fall to a level that is at or below short-term rates; causing banks’ profit margins evaporate. A recession then begins. However, all the while the Main Stream Financial Media makes excuses as to why the flattening of the yield curve is meaningless this time around. A GLOBAL SLOWDOWN Stock prices plunged at the close of 2018, presaging the decline in GDP and Earnings. The current Fed Head, Jerome Powell, became frightened by the time Santa was to arrive. All the talk about the central bank pursuing a hard money policy disappeared faster than bids had vanished on the NYSE. Perhaps it was mostly due to the complete shut-down of the high-yield bond market and the 30% plunge in the Russell 2000. Nearly all Global Central banks soon responded with the same dovish tilt. Investors are currently in the greed part of the business cycle and do not care about the fact that

FINANCE

Pento Portfolio Strategies Photo: Roman Babakin / Shutterstock.com

global growth is rapidly decelerating. The truth is that major sections of the globe are already in a recession; including Japan and parts of Europe. That’s a big problem for the S&P 500 companies that garner 45% of their revenue abroad. Meanwhile, US GDP looks like a countdown to disaster; falling from 4.2% in Q2 of last year to just about 1.5 percent at the start of 2019. The markets are brushing off all this bad news because it has now become the zeitgeist that governments have permanently supplanted the business cycle and can produce growth upon demand. But there is nothing new here. It is just the business cycle in motion. After all, it is not as if centrally-planned economies have never been tried. They have indeed and with one thing in common-they all ended in economic dystopia. The U.S. has also endured periods of rebellion against capitalism; with the same dreaded outcome. In August of 1971, the U.S. dollar was completely untethered from gold. Then President Nixon began to both publicly and privately put pressure on his then Fed Chair, Arthur Burns, to lower interest rates and print even more money—sound familiar? www.executive-global.com

Between December 1971 and December 1972, M1 which is total checking deposits, demand deposits, and traveler’s checks, skyrocket from $228 billion to $249 billion, according to Federal Reserve Board. This was a significant increase of $21 billion compared to the $5 billion increase from the year before. The other broader measurements of money supply ballooned similarly. CENTRAL BANK INTERVENTION Inflation, which had been in the low single digits, began to surge. In 1973, inflation more than doubled to 8.8%, and by 1980, inflation was at 14%. A brutal bought with stagflation marred an entire decade. Abiding by today’s new mindset of investors, in which the government can fix everything, one would assume the 1970s was a time of stock market nirvana; predicated on the Arthur Burn’s “Put.” But the truth is the major averages went down in real terms over this period. From the early 1970s to the early 1980s the S&P 500 lost 60% of its value after inflation. Furthermore, the overall economy was dismal, with unemployment hitting double-digits. The central bank under Paul Volcker reversed its former monetary policy stance in the early ’80s

by hiking interest rates to 20%--a rate that if implemented today would most assuredly render most companies, households and the entire U.S. government insolvent. America does not at all stand alone in its experiment with a command and control economy. Europe, Japan, China--and most of the developed world—have become infatuated with eschewing the free market. The Bank of Japan (BOJ), under Haruhiko Kuroda, has turned money printing into a competitive sport. So much so that the BOJ now owns 42% of all listed equities and more than 45% of Japanese Government Bonds. The BOJ’s balance sheet is now greater in size than the entire economy of Japan. Interest rates have been pushed so low that investors are paying the government to own its debt—going out ten years in duration! How has the island nation’s stock market fared under this version of a central bank’s put? Not so well. Not only has economic growth stagnated—with Japan GDP growth up just 0.3% year-over-year in 2018-but the stock market has lost 47% of its value since hitting its peak back in 1989--and that is just in nominal terms. AN ARTIFICIAL ECONOMY The ECB has also engaged in its version of massive money printing and negative interest rates. Yet the German DAX Stock Index, which is the shining star of the European Union’s (EU) economy, is trading at the same level today as it was four years ago. At the same time, the economy of the EU is stagnating. Economic history is replete with examples of economic and market chaos occurring when government debt ascends greater than a nation’s GDP. The truth is that endless government stimulus is not a panacea for the stock market or the economy. The problem is central banks have now backed themselves into a corner where they must keep printing money to prop up asset prices. This is a new paradigm for the developed worlds’ central banks. But it does not abrogate the forces of the free market; it only elevates the bar from which markets and economies must crash. In contrast to that Wall Street Journal’s March 9, 2009, dire warning, Barron’s front page headline of early April 2019 read, “This Bull Market Has No Expiration Date.” Headlines such as these capture extreme sentiment readings, ones that often are great contrarian indicators. It is a fact that bubbles abound everywhere in the world and in some cases are bigger than ever before. But they are not just contained to asset prices. Perhaps, the greatest bubble of them all is the misplaced faith in central planners to be able to successfully supplant the free market forever. Nevertheless, the business cycle cannot be abolished. And the consequences arising from creating an artificial economy based upon free money, debt and asset bubbles cannot be far off. EG

For further information, please visit: www.pentoport.com Spring 2019 •

FINANCE

ShadowStats

Yield Curve and Recession, Unfettered Money Creation and Hyperinflation Unusual Times and Circumstances: Fasten Your Seat Belt! Article by

John Williams

FOUNDER AND ECONOMIST, SHADOWSTATS.COM

confluence of unusual factors promises an unusually interesting year ahead for the U.S. economy, politics and financial markets. Discussed first, the economy appears headed into its first formal recession since the Great Recession, as signalled by an “inverted yield curve” among other indicators. The oncoming recession already has begun to unfold. Second, with U.S. federal debt levels up against the debt ceiling , a euphemistically entitled Modern Monetary Theory (MMT) has generated some political turmoil in Washington. Largely dismissed out of hand by mainstream economists and politicians, MMT offers a rapid downhill ride into a U.S. hyperinflation. In contrast, mainstream U.S. politicians already have the U.S. on a slower, albeit just as calamitous downhill ride into hyperinflation.

INVERTED YIELD CURVE HAS SIGNALLED AND CONFIRMS A LOOMING U.S. RECESSION The March 28th initial estimate of first-quarter 2019 U.S. Gross Domestic Product (GDP) showed annualised 3.2% real or inflation-adjusted quarter-to-quarter growth, well above consensus expectations, picking up from what had been a weakening 2.2% growth rate in fourth-quarter 2018. That first-quarter gain was despite most of the underlying consumer-related numbers showing headline economic activity falling into a new recession. Rate hikes and liquidity tightening by the U.S. Federal Reserve of the last eighteen months had constrained consumer income and finances, and related consumption slowed markedly in fourthquarter 2018, due to the intensifying consumer liquidity stresses. What eventually should gain recognition as a formal U.S. recession has been camouflaged partially by economic reporting distortions and disruptions from the partial shutdown of the U.S. Government

in December 2018 into January 2019. Going forward, with new reporting and July 26th GDP benchmark revisions, both fourth-quarter 2018 and first-quarter 2019 should appear much weaker in revision than they do now. Where the consumer accounts directly for 72% of the GDP, the first half of 2019 already faces a rapid slowdown. First- and second-quarter 2019 GDP likely will set the stage for a formal recession call in third-quarter 2019, accompanied by renewed liquidity easing and interest rate cuts by the Federal Reserve’s Federal Open Market Committee (FOMC), despite any current protestations to the contrary by the U.S. central bank. MARKETS CONTINUE SIGNALLING RECESSION, DESPITE UNEXPECTEDLY POSITIVE FIRST-QUARTER GDP. If you were to plot a graph of market yields on Treasury instruments against their maturities, from left to right, from shorter-term to longer-term, the plot of yields or the “yield curve” normally would have a “positive” or increasingly rising slope, from left-to-right, from shorter-term to longer-term maturity. That circumstance reflects yield risk perceptions in the markets, where generally longerterm investments command a higher return than the shorter–term investments. With a pending

• Productivity, Strategy, Profitability

recession, the risk shifts to the near term, with higher yields upfront and relatively lower yields in the longer term as flight capital seeks the longerterm rate stability. The current circumstance with higher near-term yields reflects an “inverted yield curve.” Indeed, prior to the initial “strong” first-quarter GDP release, the financial markets had been anticipating an economic downturn, where the yield curve on U.S. Treasury Bills, Notes and Bonds had turned negative. Yet, despite some fluctuation and flattening, after the initial first-quarter GDP report, the yield curve remains inverted, as this article is put to bed in the second week of May 2019.

FINANCE

ShadowStats

Photo: Xinhua / Alamy Stock Photo

DISTORTING ELEMENTS AND UNEXPECTED TWISTS The current “inverted yield curve” signal represents what would be the first formal recession— back-to-back real quarterly contractions in real GDP—since the Great Recession, and since the FOMC’s Quantitative Easing (QE) was used to bailout an insolvent banking system in the 2007/2008 collapse. There could be some market distorting factors in the Federal Reserve’s continued massive holdings of U.S. Treasury securities from the QE, combined with its continued close targeting of near-term interest rates. Some argue that imbalances in the supply of certain-term Treasury securities could be distorting the yield curve. I would argue that the yield shifts and coincident economic news have been meaningful and consistent enough to confirm that the usual “yield curve” recession warning is in play. ”NO RISK OF UNITED STATES TREASURY SECURITIES DEFAULTING’’ Previously discussed in Executive Global:[ Executive Global Autumn 2018, “Returning to a Gold Standard Is Not a Substitute for Fiscal Restraint”] “Without a near-term, massive shift in U.S. fiscal policies to raise significant new revenues (taxes) and/or to cut outlays (expenses and obligations) meaningfully, the U.S. Treasury faces long-range insolvency. Yet, raising taxes and cutting spending enough to restore fiscal discipline does not now appear to be politically feasible, at least in the United States. www.executive-global.com

“Standard & Poor’s downgraded its rating of U.S. Treasury securities in 2011. Then former Federal Reserve Chairman Alan Greenspan noted at the time that there was zero risk of the U.S. Treasury defaulting on its obligations. He noted that Treasury obligations were denominated in U.S. dollars, and that the U.S. always could print as many dollars as it needed. Dr. Greenspan was

MMT CENTERS ON THE CONCEPT THAT A SOVEREIGN STATE, SUCH AS THE UNITED STATES, CAN PRINT ITS MONEY AT WILL, NO NEED TO BALANCE A BUDGET OR TO SELL BONDS.

correct, where unbridled printing of U.S. dollars would not be an event of default for Treasury securities, although such likely would be considered an implicit default, likely triggering massive flight from the U.S. dollar. Nonetheless, such a circumstance would lead eventually to runaway domestic inflation and full debasement of the purchasing power of the U.S. dollar.”

THE UNITED STATES CAN PRINT WHATEVER MONEY IT NEEDS WITHOUT CONSEQUENCE? William F. “Bill” Mitchell, Ph.D., Professor of Economics at the University of Newcastle in Australia, not only is a primary proponent of Modern Monetary Theory (MMT), but also named the theory. He also is a noted reggae guitarist, who suggests that his guitar playing likely is more painful to people than his economic theories. He has good sense of humour there. MMT centers on the concept that a sovereign state, such as the United States, can print its money at will, no need to balance a budget or to sell bonds. The theory goes that the U.S. cannot default on debt denominated in its sovereign currency, the U.S. Dollar, since the U.S. simply can print any dollars needed to cover its obligations. Applied to the United States, the theory advocates that the government simply print whatever dollars it needs to provide a guaranteed minimum income and/ or employment to the general population. There is no need to issue bonds. Should inflation pick up and become a problem, the U.S. government simply has to take excess cash out of the system to contain it, by raising taxes or then by selling bonds, per MMT. Having reviewed the MMT approaches, I find that this system effectively guarantees a hyperinflation, and a full debasement of the purchasing power of the U.S. dollar, rather quickly. Nonetheless, the MMT concept has been embraced by Democratic Socialists in the U.S. Congress. That circumstance could foment particularly contentious and tumultuous political conditions coming into the 2020 Presidential and Congressional elections, where elements of the popular U.S. media already have embraced the MMT concepts. In contrast, Federal Reserve Chairman Powell indicated, “The idea that deficits don’t matter for countries that can borrow in their own currency I think is just wrong.” MMT largely has been denounced and dismissed out of hand by establishment economists, politicians and Federal Reserve officials, who otherwise have brought the U.S. economy, U.S. fiscal conditions and the U.S. Dollar to their current states of extreme peril. PRECIOUS METALS PRESERVE THE PURCHASING POWER OF YOUR WEALTH AND ASSETS The accompanying graph plots historic gold prices since 1665 in New Amsterdam (New York City) to date, showing relative price of gold against headline inflation, and what inflation otherwise would have been without formal redefinitions by the U.S. government to cut cost-of-living adjustments for Social Security recipients, for example. Where holding gold covers actual inflation over time, it remains an extraordinarily valuable option, should anyone’s circumstance be caught up in an MMT or current mainstream “no inflation” economic euphoria. With such as background, today is a good time to look to preserve the long-range purchasing power of your wealth and assets with physical holdings of gold and silver. EG

For further information, please visit: www.shadowstats.com Spring 2019 •

PRODUCTIVITY STRATEGY PROFITABILITY

PROFITABILITY

Global Bank of Commerce

Profitability and Private Banking in Antigua & Barbuda Interview with

Brian Stuart Young

CEO, GLOBAL BANK OF COMMERCE WWW.GLOBALBANKOFCOMMERCE.COM

Our interview with BRIAN STUART YOUNG, CEO and Chairman at Global Bank of Commerce, documents the activity behind one of Antigua & Barbuda’s pre-eminent banking institutions offering attractive financial products with a stellar reputation spanning over 30 years.

In what ways has the banking sector in Antigua & Barbuda remained resilient when compared with other major international banking jurisdictions? Our banking sector has remained resilient due GBC to its strong regulatory framework and compliance with the ever-evolving international banking requirements, including compliance with the OECD, FATCA and the Financial Action Task Force (FATF) regulations to prevent money laundering and the financing of terrorism. Within our compliant environment, we offer a premium banking experience, with services that are tailormade to suit our clients’ goals and aspirations for their businesses and families, generation after generation. EG

What benefits does being a one-stop shop for complex investments, savings, CDs, and cash management provide to clients in other markets? As you cross the stepping stones of life, we GBC evolve with you step by step, providing dedicated service to meet your changing lifestyle and financial needs, actively partnering with our clients and introducing solutions to support client investments, cash management, savings and security needs which work to ensure your financial plans are met. We are located in Antigua, but our services are accessible world-wide, available with your fingertips. EG

Tell us how your wealth management and succession planning provision may benefit High Net Worth Individuals? As a 36 year old institution, we understand GBC the demands of HNW clients and the importance of succession planning. Indeed, we are EG

already serving second generation banking clients and planning for the third generation. We understand the busy lives of our clients and work to provide the convenience they deserve to manage their financial affairs. We are here for them and their families. What typical procedures would affluent clients follow in the opening of a private trust or foundation based in Antigua & Barbuda? We provide well-tailored boarding services in GBC the priority banking executive lounges at our Head Office, and our comprehensive banking experience is ready to support clients needing corporate, trust or foundation services, which are focused on helping you manage your wealth. We are also able to assist international clients interested in expanding their portfolio to include second citizenship, and a second home. Antigua and Barbuda’s Citizenship by Investment Programme is available to duly qualified and approved applicants. A dedicated relationship manager, supported by a team of corporate service specialists, can offer personalised wealth solutions that match your investment goals. EG

Are there any ways in which Antigua & Barbuda may benefit where the introduction of Basel III requirements may be a hinderance in other jurisdictions? Our Jurisdiction is compliant with current GBC international regulatory standards, and our Bank already meets Basel III’s Guidelines that refer to its three pillars: a minimum capital adequacy ratio requirement of 8% in relation to its risk-weighted assets; a comprehensive supervisory review process; and market discipline. It is our Bank’s role to remove

• Productivity, Strategy, Profitability

any obstacles, increase security, and ensure our clients achieve the banking relationship they deserve. And what benefits may your advisory capacity as an international banking institution yield to an investor’s internationally diversified portfolio? Our institution maintains relationships with GBC some of the finest and most trusted investment advisors worldwide, and is well-positioned to provide confidential and convenient portfolio management services. EG

What future prospects do you see for Antigua & Barbuda as an international financial centre? The role of a traditional international financial GBC centre has had to change and, in our case in Antigua, we have broadened our business model to provide a balance of strong wholesale banking services in the domestic market, and a significant international banking division providing premium banking services to higher net worth local and international clients, leveraging on our global relationships, technology capabilities and pool of experts. EG

In your experience as a banker, what is the ultimate key to profitability? The real key to profitability in the banking GBC sector is to focus less on profitable margins and more on serving valued banking relationships. Our Priority Banking Service is a relationship that comes with our commitment to partner you, your family and your business, today and tomorrow. EG EG

For further information, please visit: http://www.globalbankofcommerce.com

FINANCE

Property Investment

Four Green Houses, One Red Hotel: Cashflow, Property & Wealth Generation Detractors of Rich Dad, Poor Dad author Robert Kiyosaki frequently point to his last filing for bankruptcy in 2012. Kiyosaki was hobbled with a $24 million settlement after a court dispute, and filed for bankruptcy to address the liability. His personal fortune remained estimated at around $80 million, however, and many view the incident as more shrewd manoeuvring from Kiyosaki, rather than indicative of fraudulent or failed philosophies, thinks Shannon Berkley. ust as IBM’s Watson said, “…that’s where you’ll find success — on the far side of failure,” advocates of Kiyosaki maintain that incidents like this support, rather than detract from, his business approach. Rather than giving the lie to the whole Kiyosaki philosophy, they point to his continued wealth and consistent business behaviour, noting the bankruptcy filing as a smart move to enable Kiyosaki to maintain momentum. Where Robert Kiyosaki differs from conventional wealth generation and money management advice most pertinently, is in his insistence that people should invest to enjoy a fluid cashflow — as opposed to some distant hope of a nest egg. Indeed, being able to manage a $24 million judgement while still being worth some $80 million, presents more as a strong testament to the businessman’s approach, as opposed to evidence of a failed philosophy. Kiyosaki typically advocates starting small, with rental property, and then cashing in to buy a “red hotel” — a bigger property with higher rental income. He is a prime advocate of the notion of passive income and money working hard for you, and insists that people often remain poor due to unnecessary spending on trinkets and gadgets.

INVESTING KIYOSAKI SMART The reason for American Kiyosaki’s philosophy resonating so strongly with people is his formulaic approach, which he claims guarantees inevitable prosperity over time. Key to his method is the depiction of money management as being divisible into four distinct quadrants, prime amongst them being the cashflow quadrant. He also presents — looking at his personal worth — as someone who has the evidence to prove his theories. Kiyosaki has walked the talk, and his personal wealth is hard to argue with. In a nutshell, the Kiyosaki Rich Dad, Poor Dad philosophy insists that by smartly allocating funds towards income-generating assets, wealth is a sure thing over time. Kiyosaki advocates investing for cashflow instead of for capital gains. The latter he deems to be “gambling,” due to the arbitrary nature of stock market and/or real estate appreciation. Key to the Kiyosaki approach is his view that people need to unbundle the lies they have accrued around money. He insists that, irrespective of prevailing economic conditions, investors who educate themselves extensively on their asset class or specialism will accordingly generate wealth-inducing cashflow for themselves. A medium-term cashflow is paramount in his

• Productivity, Strategy, Profitability

philosophy, as opposed to capital gains. There’s a difference, one he maintains the average school neglects to educate young adults about, and an omission that leaves most people unable to escape their low-income brackets. Those who learn to focus on cashflow instead of capital gains, begin earning income from assets, instead of from labour. Adopting his approach to money management enables people to become financially free, and it also presents as a relatively straightforward journey.

KIYOSAKI TYPICALLY ADVOCATES STARTING SMALL, WITH RENTAL PROPERTY, AND THEN CASHING IN TO BUY A ‘‘RED HOTEL’’ - A BIGGER PROPERTY WITH HIGHER RENTAL...

FINANCE

Property Investment

Photo: LunaseeStudios / Shutterstock.com

BUSINESS OWNERSHIP MAKES FOR INVESTMENT Robert Kiyosaki owns over 10,000 property units, as well as oil wells and hotels. His investment strategy encompasses various interests in the tech and informal sectors, and he applied the same investment strategy that he advocates to acquire his great wealth. Although he maintains that the approach will work regardless of financial circumstance, he is particularly insistent on starting a business, as that logically enables subsequent investment in rental properties, therein boosting cashflow. Moreover, he has also attracted attention by insisting that smart US investors can legally pay zero capital gains tax. By employing what is known as a 1031 Exchange — buying another property and rolling the taxes over to the following financial year — investors can inhibit the IRS’ draining of working capital. In his publications, Kiyosaki has also drawn criticism for where he appears to be advocating insider trading, although publicly denying ever having suggested illegal behaviour as essential to building wealth. It would appear that the flack taken was on the back of his willingness to tweak the tax structure to the hilt, something he sees as almost obligatory to build wealth, and wholly legal. It makes sense that in his willingness to reeducate individuals about their finances, there would be components of his approach that could touch on sensitive subjects. Since his philosophy is indeed www.executive-global.com

a departure from “conventional” thinking, some potential conflict with existing legislation is almost inevitable. That being said, the Kiyosaki approach remains squarely within the confines of legal business behaviour. Kiyosaki continues to spend a large part of his time on financial education, having once stated that his books were at that time almost extensive leaders for the lecture tours he maintains to the current day. He also created the board game Cashflow 101, which he describes as “Monopoly on steroids.” The game and its subsequent versions are a means to financially educating people on the importance of cashflowing investments, seen as a critical aspect of people escaping their typically flat rat race income. A KIYOSAKI CASHFLOW IS NOT CAPITAL GAINS! Kiyosaki believes that reliance on capital gains propagates the “greater fool theory.” For example, when an individual buys a house for £250,000, he presumably hopes to sell it for £300,000 or £350,000 down the line. The problem with this approach, however, is that markets definitely do not always go up. Something else is needed, a new way of seeing things, to escape the vagaries of traditional buy-and-hold investing. The difference between investing for gains and investing for cashflow lies in interim cash from investments. For example, rather than buying the house depicted above for later sale, and factoring that gain in as the only valid consideration, Kiyosaki suggests focusing on the rental income to be gained prior to sale. Rather than the common buy-sell-profit approaches that fail as often as they succeed, buying assets for the purpose of generating a cashflow is imperative. Capital gains are stoic and docile, while investing for cashflow is proactive. It implies the need to anticipate more focused money management, with continued, greater investment as the process begins to yield an enhanced monthly cashflow. A

persistent lobbyist of the boring slow burn experienced while following a plan to fruition, Kiyosaki maintains that most people abandon the needed dull plan for the high jinks potential depicted as “real” investing. Alternatively, others bail on a methodical accrual of real wealth precisely due to a lack of cashflow, essentially scuppering investments to field living expenses. The unfortunate reality is that in zig-zagging through investments in search of buy-sell-profit opportunities, wealth is effectively pared down, and no long term benefits accrue. Investing for cashflow immediately affords investors an enhanced monthly income with which to field associated expenses, while maintaining a more secured yield in the event of a future sale of the asset. CASH(FLOW) IS KING It might seem a minor point — the difference between investing for gains or investing for cashflow — but for Kiyosaki, it represents the difference between a life of limits and a life of abundance. Perhaps the first step for most people is taking the leap towards becoming a business owner. In the modern tech era, this is often far simpler than the previous imaginings of a land-based retail store, service salon or lumber yard. While these ventures obviously have intrinsic value, Kiyosaki warns against defeating dreams before they can manifest, and insists that establishing an online or other business is often a lot simpler and less expensive than people think. Being a business owner is integral to future investing and wealth building in the Kiyosaki school. Investors who approach the market with an eye for cashflow investments — those that will pay “dividends” preferably on a monthly basis — are able to follow the ladder up, one day awakening to the realisation that they are, indeed, now managing wealth. Such wealth created by investing for cashflow is also not the limited pool of “risk a little and gain some returns,” if you’re lucky. It’s a dynamic, educated approach to the reality that money does indeed make more money. That being so, the fastest and surest route to wealth over the medium term remains buying into that which spins money regularly. All of the small increases in regular income enable not only an enhanced investment portfolio, but also the ability to reach into the size and type of investment that translates into genuine wealth over a far shorter period of time than conventional thinking allows. EG Spring 2019 •

CEOPROFILE

Catherine O’Connor Chief Executive Officer, O’ Connor Portfolio Management LLC

RISK ADJUSTED SOLUTIONS For our dedicated interview on the Risk Adjusted Solutions with CATHERINE O’CONNOR, Chief Executive Officer of O’ Connor Portfolio Management LLC, Executive Global takes and exclusive look behind the operation of one of America’s pre-eminent brokerage firms using proprietary technology to manage risk. We gain a fundamental insight into the award-winning approach to wealth management that has secured the portfolios of many institutional and private clients. Your clients were not affected by the stock market crash of 2008. In what ways does your unique approach mitigate against risk? First, we mitigate risk by focusing on COC investments in the strongest sectors and industries, and naturally the strongest become that way, because a larger amount of money flows there. Second, within those sectors, we find the strongest individual stocks. Third, rather than buy at market price, we identify support levels on charts where we think the stocks could “take a breather” if the market pulls back. We place computerised buy orders at that level, and wait for a fill “on the dip”. By doing so, there is less risk for our clients. Many report that they are happy during a market sell-off, because they had an opportunity to invest in a great company at a lower price. When the charts show lower highs and lower lows over a series of months, we would not be investing in stocks at all. This was exactly what happened from January to July of 2008, causing EG

• Productivity, Strategy, Profitability

us to sell stocks and buy bonds before the housing crash happened. What advantages are posed to investors by you being fee-based advisors compensated based on a percentage of assets under management? Being a fee-only based advisor gives us the ability COC and incentive to choose the very best investments for our clients. The use of packaged products like mutual funds and annuities can be tempting for commission based advisors because of the loads (commissions) built into them, but we are able to invest our customer’s assets directly into stocks and bonds without having to charge a commission on the trades. We believe good advice cannot come from commissioned trades or products. We do not trade to get paid; we strive for real growth of our clients assets and are rewarded monetarily for doing so. When your account balance goes up, we benefit. Conversely, when you lose money, so do we. It is in both of our best interests to be fee-only. EG

CEOPROFILE

Catherine O’Connor Chief Executive Officer, O’ Connor Portfolio Management LLC

Being a fee-only based advisor gives us the ability and incentive to choose the very best investments for our clients. www.executive-global.com

Spring 2019 •

CEOPROFILE

Catherine O’Connor Chief Executive Officer, O’ Connor Portfolio Management LLC

At O’ Connor Portfolio Management, well-balanced means striving to own the strongest individual stocks in the strongest sectors of the markets. CV CATHERINE O’CONNOR COUNTRY OF BIRTH USA ALMA MATER The Pennsylvania State University EXPERIENCE 2013 Registered Investment Advisor; O’Connor Portfolio Management, LLC. 2010 The College for Financial Planning; Accredited Portfolio Management Advisor (APMA) 1999 The College for Financial Planning; Certified Financial Planner (CFP) 1993 IDS; American Express Financial Advisors; Ameriprise Financial 1979 Unitron Industries, Inc. 1977 The University of Colorado 1976 The Pennsylvania State University; B.S. Magnum Cum Laude, age 20

EXECUTIVE RECOMMENDATIONS

» PRODUCTIVITY

Focus on compounding; ignore both market and personal distractions.

» STRATEGY

Incorporating flexibility into your strategy is essential.

» PROFITABILITY

Success of the client ensures profitability.

How would you define a well-balanced, riskadjusted, diversified portfolio? At O’Connor Portfolio Management, wellCOC balanced means striving to own the strongest individual stocks in the strongest sectors of the markets. When a stock becomes weak, we sell it and replace it, with a stronger position. For the strong positions, we let them compound without regard to size, as long as they remain strong. We believe this is the correct and best formula for compounding money and a wellbalanced portfolio. Traditional Wall Street might encourage one to buy the whole basket or index including many weak and a few strong positions. They may advise the opposite for balancing; called “re-balancing” wherein one should sell strength and buy weakness on a calendar time schedule, i.e., quarterly, semiannually, or yearly. Risk-adjusted for us, is done daily with our proprietary charts; we guide clients using technical analysis in order to determine when it is okay to be in the stock market and when it is not okay. This is the same method we used in the latter parts of 2007 and early 2008 that caused us to get out of stocks and into bonds before the crash in 2008. A diversified portfolio consists of a proper allocation using several sectors and industries. We analyse all the sectors and rank them, strongest to weakest, and allocate assets accordingly, favouring the strong ones, and leaving out the weak. Then we allocate no more than 5% of the portfolio to any one stock, using as many strong stocks as necessary to achieve our weighting target. EG

Where fundamental and technical analysis in concerned, how do you balance these two strategic investment approaches? Fundamental analysis is good and necessary, COC and with respect to stocks that make up the S&P500 specifically, there is a wealth of information already out there produced by intelligent and diligent analysts. Pure technicians believe that all available information on a particular stock is well known and reflected in the price of that stock. Pure technicians believe all you need is the chart. We believe that a combination of the two is the most prudent approach, using charts to identify winners and referring to the research to see if there are any red flags (or positives) that may affect the future performance of the stock.

• Productivity, Strategy, Profitability

What impact do you think Artificial Intelligence, Cryptocurrencies and other innovative technologies will have on the investment world in the next 5-10 years? Artificial Intelligence can be a real positive COC for the investment world if, and only if, the digital advice is programmed correctly from the start. For instance, what if the algorithm used, favours, sell the strong and invest the proceeds into the underperformers. This is a common asset allocation strategy by Nobel Prize winner Harry Markowitz, which many software programs are using. We do not believe that money can compound efficiently in this way. We favour instead, Albert Einstein, and understand that money compounds more efficiently if you let the winners run and sell the losers. Cryptocurrencies may be just another “product” for some; O’Connor Portfolio Management does not use products. We strive to buy great individual companies for our clients, with the objective to build a solid investment portfolio that will grow over time. EG

How may the transition from LIBOR in 2021 affect derivatives and the global financial markets, and are there ways in which investors may take advantage here? If LIBOR is replaced by a new interest rate COC benchmark such as the Secured Overnight Financing Rate (SOFR), then it follows that the balance sheets of the most affected will be those that have to float new futures, swaps and loans related to the SOFR to gradually displace the same LIBOR referenced contracts. CME Group, (CME) one of the world’s largest futures and swaps exchanges launched a SOFR referencing futures contract last year. The stock outperformed through November, 2018, then sold off in December, 2018 like most U.S. stocks. What is significant, though, is that there was no January, February, March 2019 rally in CME stock. How the average investor might take advantage here, is to steer clear of banks, futures and swaps exchange stocks. EG

In the movie The Big Short (2016) investors successfully bet against the housing market, having determined prevailing trends in advance of the Great Recession. What future macroeconomic trends do you see as opportunities for investors to capitalise on? At some point the national debt will become COC an issue. The current path rate of spending is alarming and if not addressed in some meaningful fashion, the debt “bubble” will burst. It has been an EG

CEOPROFILE

Catherine O’Connor Chief Executive Officer, O’ Connor Portfolio Management LLC

Are there any unique strategies that may be deployed to maximise profitability in an era of Negative Interest Rate Policy (NIRP)? The expected results of negative rates were COC to increase spending and stimulate economies, but the actual result may have been to increase demand for risk assets, and in particular, assets that provide a higher level of income such as REITS, Utilities, Consumer Staples, and High Yield Bonds. Overall equity prices have not responded as intended some will argue, because banks have been hurt to a large degree and they make up a large portion of the indices. As the “experiment” continues, perhaps bonds and more likely, bond market equivalents, to appreciate. EG

If you were Secretary of the Treasury acting in an advisory capacity to the Trump Administration, what three core wealth generation strategies would you deploy to ensure a prosperous economy for all? Clients generally benefit from pro growth COC strategies. Any policy that would assist individual investors in appreciating their capital and retaining their wealth would be something that O’Connor Portfolio Management would welcome. EG

How did your rigorous financial training prepare you to succeed in the higher echelons of portfolio management and finance today? Learning the textbook strategies for managing COC money are important, but understanding the ebbs and flows of the markets in the real world, may be more so. This is where experience becomes invaluable. Navigating different markets over the years is how a manager/financial advisor becomes seasoned and more of an asset to the client. Our combined 50 years doing just that, has made our services invaluable to our clients. EG

As a multi-award winning firm that skilfully navigated the 2008 financial crisis, what is the secret to your success? A detailed, thoughtful, investment approach COC regarding how money compounds, combined with a laser focus on the success of the individual client is our recipe. EG EG

ACCOMPLISHMENTS

» 2019: 130% Increase in Assets under Management

» 2016: Automated Proprietary Technology for Individual Portfolio Management.

» 2013: Left major US firm to open O’Connor Portfolio Management, LLC.

» 2012: Developed Proprietary Technology for Individual Portfolio Management.

» 2008: Purchased Investment REO from failing Bank.

www.executive-global.com

issue for many years and the current consensus seems to be “It’s not a problem until it’s a problem”. US debt has been downgraded once with little consequence, but at some point the world will demand a higher rate for US debt. With over 26 years experience in the financial sector, what in your opinion- characterises a great portfolio manager? A great portfolio manager understands how COC money compounds most efficiently and has a definite written plan of employing strategies which do exactly that. A great portfolio manager needs to feel the pulse of the market and be willing to do the work to change the plan as the markets change. However, in the end, it is more about compounding money strategies than market fluctuations. EG

ABOUT CATHERINE O’CONNOR O’ Connor Portfolio Management, LLC is an awardwinning wealth management advisory firm headquartered in Tampa, Florida. As of 2019 the firm has seen a significant 130% increase in AUM. For further information about O’ Connor Portfolio Management, please visit: www.OConnorPortfolioManagement.com

Spring 2019 •

FINANCE

Global Banking

The Asia Infrastructure Investment Bank And British-Sino Relations Blunt global realities are hard to ignore, especially when it comes to global infrastructure financing. As humanity begins the 21st century, the dollar dominion that has run the world for the last 100 years or so may just be about to change. Since China crossed the Rubicon years ago and unleashed its rampant economic potential, this massive country with the biggest population on earth has experienced a growth all other nations can only envy, states Shannon Berkley. ow at the heart of the rising giant, the Asia Infrastructure Investment Bank has become a huge contender for world money-handler, and a direct threat to the dollar’s dominion. The US remains the largest oil consumer on the planet, but its ability to protect that arrangement is waning. The dollar represents a country that used to be a somewhat self-satisfied manufacturing powerhouse, but this is no longer the case. China’s demand for fuel and raw materials has also led to traditional arrangements becoming far more fluid. These aspects alone haven’t yet toppled the dollar, but when America has a $222.6 billion trade deficit with the very same China the usurper, and Chinese growth still far outstrips the US, power has to begin to change hands. Financing for infrastructure payments and international trade payments have been synonymous with the dollar bill. The dominion of the IMF and World Bank, and even the Petrodollar, now faces a legitimate challenge from China’s persistent economic growth, and Beijing’s shrewd management of the yuan. Unthinkable a decade ago, China is now head to head with the dollar on global infrastructure funding, and indeed, a vastly superior trading and development partner for a great many countries all over the world. To some extent, the price for America’s meddling with its southern continent neighbours is finally manifesting. Although some countries — particularly Brazil under the new right-wing leader Jair Bolsonaro — are already expressing concern

over just how powerfully China can influence a nation’s fiscal well-being and autonomy, the fact remains that China has become the current global philanthropist in sheep’s clothing. With massive growth, an aggressively stable currency and a huge, unstoppable physical reality, today’s China means that Uncle Sam is no longer guaranteed the best seats in the house. CHINESE GROWTH AND RESERVES ARE HARD TO EQUAL Behind the simple figures that make trade sense, Chinese monetary policy — and more importantly, the sly engineering of its access to the world’s commodities — are now making America look like a poor cousin. Anathema to many of the world’s nations but a decade or two ago, China nowadays makes an offer hard to decline. More and more established routes to trade and financing are caving in to the formerly unthinkable: China is a better trading partner and finance house in so many ways. Countries are being offered Chinese financing that better supports their politics, economic agenda and future growth, the Old Boys Club of go-to money houses is silently crumbling. Many countries are looking outside of the US dollar to see what offers suit them best over the short and medium term, and political allegiance no longer holds the same water it did in centuries past. An assortment of inputs also bolsters the reality of China becoming the globe’s finance house, with all accompanying status and dominance. Beijing years ago began pushing the citizenry to buy gold

• Productivity, Strategy, Profitability

and accept gold as payment. In comparison to America’s abandonment of the gold standard in 1971 under Nixon, Chinese government reserves have been swelling nicely, putting China currently at number six in world rankings. Although the cryptocurrency era looms, and many aspects of currency in a modern life will surely change over the next decade or two, China currently presents as a savvy and well-managed trading partner or financier, adamant about its gold reserves, rock-solid on legacy terms. Bi-lateral agreements also alter the geopolitical landscape, and America and the IMF, along with the World Bank, are realising the diminishing extent of their ability to control global affairs. Often applauded in the region, especially where America is viewed with disdain, these trade arrangements eat away at (American) business as usual. THE END OF THE ANGLO-AMERICAN ALLIANCE? Not only giant China, but belligerent Russia, the second-largest nation on earth, India, Turkey and oil-producing Iran are all actively voicing a desire to escape dollar dominion, and enacting formerly

FINANCE

Global Banking Photo: humphery / Shutterstock.com

unthinkable agreements with others, cognisant as they are of global monetary realities. Very surprisingly for many commentators, Britain’s own Bank of England Governor, Mark Carney, recently expressed the opinion that China is inescapably destined to become the only world superpower. Reasons behind various nations’ push to escape dollar dominion are varied, from political allegiance to compelling home front issues, but that

THE ASIA INFRASTRUCTURE INVESTMENT BANK HAS BECOME A HUGE CONTENDER FOR WORLD MONEY HANDLER, AND A DIRECT THREAT TO THE DOLLAR’S DOMINION.

www.executive-global.com

the UK is actively recognising the way the world is moving, by looking to a future far more aligned with China, is dramatic. Along with the dollar currency came American interests, and these are now often being repudiated or rejected outright by many formerly friendly US partners. From the Bush-Blair era, when the US and the UK were strolling along hand in hand like forever lovers, American foreign policy, combined with business flight and decades of catering for the influentially wealthy, has left a sour taste in many mouths. When China is heading towards a full internationalisation of the Chinese yuan or renminbi, backed by the tonnes of gold it’s been buying for the last few decades to consolidate the integrity of its currency, the dollar may well end up as second fiddle. FIRST CHOICE, CHINA? Although China previously repeatedly withdrew from tying its currency into oil markets to generate the petroyuan, it has now stayed the course, and brought many willing partners in from the cold, willing to trade oil in yuan. As the second-largest importer and consumer of oil, it was inevitable that

China would one day contest the petrodollar’s status. Some commentators point out that excitement around the prospect of the petroyuan usurping the petrodollar on world markets is premature. But since China is currently the world’s manufacturing arm, and America has all but eliminated its manufacturing ability at home, all China needs do is more of the same for another few years, in order to alter the global landscape fundamentally. Sovereign nations have recently been dumping US treasuries in favour of other currencies for oil payments, completely undermining the petrodollar. At its launch in 2015, the Asia Infrastructure Investment Bank (AIIB) had $100 billion at the outset. Although this is but half of the World Bank’s capital reserves, in a few short years, the Chinese entity looks far cleaner and more attractive to many seeking funding. With the world having lived through some disastrous financial moments since the 1990s, should those tremors reappear and markets scare or even collapse, it will be strongly-backed currencies that come out higher up the ladder than others. To this end, China is not only a currently active trading partner, but also well aware of its strengths and ability to entice willing partners, based on its currency and overall economic fundamentals. While other central banks have been devaluing their currencies through reckless inflation and credit expansion, China has consistently steamed ahead on good fiscal fundamentals. The growth and proactive positioning of China is something no other country can emulate successfully. BRITISH-SINO RELATIONS SET TO GROW Indian PM Narendra Modi in 2017 called for an expansion of the AIIB’s financing. The chief of the second-largest nation on earth has fully embraced China’s One Belt One Road (OBOR) overture, which seeks to swell Eurasian trade, development and cooperation, both by land and sea. Although not officially within the sphere of influence, Britain is clearly looking to the massive trade and money movements initiated by the project for its own interests. China consistently pushes ahead with an annual growth rate no other large nation can boast, ranked at is currently number 16, with a 6.7 percent annual GDP growth according to IMF statistics. Hence, the fundamentals will prevail and, although China is clearly manipulating its currency and has been for years, the overall formula from Beijing will continue to push China out front, ahead of all others. America now has more bravado than actual material wealth in its manufacturing, whereas China manufactures almost everything, including “American” goods. The AIIB has been criticised for its diverse tools and investment strategies, but it’s no surprise. It only makes sense that the AIIB will pick up the same critique that commentators applied to the World Bank, pushing private agendas and risking impoverishing a nation’s people with onerous loans. If anything, this merely confirms China’s ascendancy, something middle-earth Britain is eyeing, as it watches a stagnant America across the Atlantic at the short end of a massive trade deficit that’s only set to grow uncomfortably into the future. EG Spring 2019 •

Invest in Canadian Real Estate

PredictingÊyourÊrateÊofÊreturnÊinÊrealÊestateÊmarketÊ pricesÊmightÊbeÊdifficult,ÊthenÊtheÊglobalÊeconomyÊ isÊslowingÊdown,ÊitÊisÊassuringÊtoÊknowÊthatÊ Canada'sÊhousingÊmarketsÊareÊholdingÊupÊbyÊ strongÊimmigrationÊlevelsÊandÊaÊrobustÊjobÊmarket.Ê

InÊToronto,ÊrisingÊinterestÊratesÊandÊtheÊmortgageÊstressÊtestÊwereÊ theÊtwoÊmajorÊfactorsÊaffectingÊmarketÊactivityÊinÊ2018,ÊwithÊaverageÊ saleÊpricesÊdroppingÊbyÊfourÊperÊcentÊfromÊ$822,572ÊinÊ2017ÊtoÊ $789,181ÊinÊ2018.ÊOnÊtheÊotherÊhand,ÊtheÊcondoÊsectorÊperformedÊ theÊstrongest,ÊandÊnowÊrepresentsÊalmostÊ37ÊperÊcentÊofÊtotalÊ residentialÊsales,ÊwithÊitsÊrelativeÊaffordabilityÊfuelingÊtheÊriseÊofÊ verticalÊgrowth.ÊAverageÊresidentialÊsaleÊpricesÊareÊexpectedÊtoÊ increaseÊbyÊtwoÊperÊcentÊwithÊbenchmarkÊpricesÊjumpingÊnineÊperÊ centÊinÊtheÊresaleÊcondoÊmarketÊinÊ2019.ÊAnotherÊfactorÊthatÊmightÊ helpÊkeepÊtheÊmarketÊstableÊisÊthatÊresidentialÊrentsÊareÊsky-high.Ê WithÊhouseÊpricesÊatÊastronomicalÊlevelsÊinÊmanyÊcitiesÊacrossÊ Canada,ÊaÊgrowingÊnumberÊofÊCanada'sÊwould-beÊinvestorsÊareÊ hopingÊforÊaÊmarketÊcrash.ÊInÊVancouver,ÊNorthÊAmerica'sÊleastÊ affordableÊhousingÊmarket,ÊpricesÊareÊinÊaÊfreeÊfall,ÊmakingÊnowÊaÊ smartÊinvestmentÊopportunityÊforÊlong-termÊglobalÊinvestors.Ê And,ÊwhileÊyouÊmayÊhaveÊreadÊallÊtheÊdoomÊandÊgloomÊoil-relatedÊ headlinesÊaboutÊAlberta,ÊthereÊisÊmoreÊtoÊtheÊstory.

CanadaÊhasÊotherÊvaluableÊresourcesÊthanÊoilÊthatÊfuelÊitsÊeconomyÊ ÑÊforestry,Êmining,ÊnaturalÊgas,ÊagricultureÊandÊmanufacturingÊhaveÊ beenÊmainstaysÊforÊdecades.ÊNotÊtoÊmentionÊallÊourÊfreshÊwater,Ê whichÊsomeÊmayÊsayÊisÊmoreÊvaluableÊthanÊoil.Ê OneÊofÊCanadaÕsÊgreatestÊassetsÊisÊitÕsÊaÊrelativelyÊsafeÊcountry.ÊWhenÊ aÊcorporationÊinvestsÊinÊCanada,ÊtheyÊcanÊexpectÊaÊreasonableÊ returnÊonÊtheirÊinvestments. ForÊnow,Êthough,ÊexpertsÊcautiouslyÊpaintÊtheÊfutureÊcloserÊtoÊtheÊ pictureÊofÊaÊlandingÊplaneÊthanÊthatÊofÊaÊrocketÊshipÊplummetingÊ earthwardÊforÊ2019.ÊSoÊforÊmany,ÊthisÊisÊaÊgoodÊtimeÊtoÊtakeÊtheÊ lemonsÊandÊprepareÊtoÊmakeÊlemonadeÊinÊCanadianÊrealÊestate. AtÊtheÊendÊofÊtheÊday,ÊpeopleÊneedÊaÊroofÊoverÊtheirÊhead,ÊandÊtheÊ strengthÊinÊresidentialÊrentalÊinvestmentsÊmightÊbeÊtheÊticketÊtoÊaÊ strongerÊrateÊofÊreturnÊinÊCanadaÊthanÊotherÊglobalÊmarkets.ÊYourÊ chancesÊofÊfindingÊaÊstrongÊinvestmentÊpropertyÊisÊprobablyÊbetterÊ nowÊthanÊatÊanyÊotherÊtime,ÊandÊyouÊcanÊprobablyÊnegotiateÊaÊ greatÊdealÊtoo.

FINANCE

Better Globe Group

Better Globe Forestry Making Africa Great Again Better Globe Forestry Ltd (BGF) is a forestry company in Africa. BGF has approximately 100,000 ha of land available with three tree plantations in Kiambere, Nyongoro, and Sosoma in Kenya and has planted approximately 1 million mahogany trees in the country so far. Article by

Rino Solberg

CEO, BETTER GLOBE FORESTRY

owever, In Dokolo in Uganda, they had planted an additional 1 million mahogany trees by the end of 2018, which in one year, is 10 times more than they did the first 10 years in Kenya.

LEADER WITH A HEART FOR POOR PEOPLE When asked about the story of the company’s origin, Rino Solberg, Chairman of BGF, stated in 2004 that when he was 60 years old, he decided to do something more than just building businesses, which at that time, he had been doing for 40 years. He had been running a business in Africa for some years and saw the huge problem that poverty inflicted on its people, making their lives hopeless. Rino therefore, took it upon himself to spend the rest of his life working on the biggest goal he could think of- to “Eradicate Poverty and Corruption” in Africa. He believes that in order to eradicate poverty, people must be self-sustained which promotes dignity, pride and that work must be based on sustainability. As approximately 70% of the people living in Africa are small farmers, they live on what little resources their land can produce. He spent two years on a feasibility study, in order to find the right tropical tree that could generate enough profit within 15-20 years, which was the time limit he had for the venture. His forestry director Jan Vandenabeele, then discovered a tree called “Mukau”, which grows in dry-land Kenya, and also contained the required quality of wood. SOCIAL ENTREPRENEURSHIP - THE ANSWER Tree planting has become the business engine behind the whole concept of the company, where everybody can make money, from the individual who planted the trees to the one who financed

the process. BGF, which has won several awards for their work in East Africa, has become the most respected forestry company in Kenya. By the end of 2018, they had approximately 600 employees, with the aim of eventually planting 9 billion trees in Africa. After much testing and development, they discovered the “Key” for the eradication of poverty and corruption. Rino wrote a book about it called; “Social Entrepreneurship – The Better Globe Way,” which explains this further. A THREE-PRONGED APPROACH Massive tree planting, as the engine behind profit generations for all participants. Planting high quality mahogany trees, can be done by all farmers and can give a good ROI for these farmers, because it has a huge demand and very little supply, a combination that gives assurance for long term profit in any market. Microfinance, to kickstart poorer farmers, with

• Productivity, Strategy, Profitability

dignity and self-realisation. Even a small farmer in Africa needs seed money in order to start up as an entrepreneur. Small loans, can help them buy the tools and equipment needed to make their business profitable and develop different products. Education of children to build integrity in the fight against corruption. Without free education of children, Africa cannot get out of poverty. Better Globe Forestry works with Child Africa, an award-winning NGO which was started in 1991 by Rino and his wife Julie Solberg. One of Rino’s books, “Put Integrity First” and their magazine called BINGWA (Champion) as well as their TV programs, are used to teach the children integrity in order to fight corruption long term. EG

For further information, please visit: betterglobegroup.com

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FINANCE

Qashqade

Disruptive Technology for Alternatives Our interview with OLIVER FREIGANG, CEO and CO-Founder at Qashqade charts the progression of an innovative company delivering private equity solutions in Switzerland as we catch up with one of Zurich’s foremost pioneers facilitating greater functionality for General Partners, Limited Partners and private companies. Tell us about the ways in which your core proposition delivers value to General Partners, Limited Partners and private companies? qashqade has developed a software that allows OF its users to automate carry calculations and subsequent carried interest allocations without having to rely or use Excel. While doing this, we can also support simulation of current/future pay-outs or IRR predictions. It is ‘easy-to-use’, provides all required security features like audit trails and granular access rights. EG

How does this solution differ to that of existing providers in the market? All of the solutions we have seen so far who OF offer a carry calculation solution, cannot handle the full complexity of all calculations or do still rely at some point in the process on Excel. In addition, some providers are offering this as part of a full consulting or admin service which is also different to us. EG

What challenges are typically presented when looking for the best solution within the startup community? For qashqade we had three main challenges: OF >When you are a young and not established start-up, you usually have a problem convincing clients to purchase your software >Figuring out the best pricing for your product- in particular for early adapters >Finding the right talent EG

Name three key areas in which your solution can maximise profitability for clients? Our tool helps to streamline and automate OF your processes while mitigating risk. Therefore qashqade: >Reduces the risk exposure you have today when using Excel for calculations as needed in carry and carry allocation which leads to lower exposure due to corrections and mistakes >Reduces the time you spend on such calculations and allocations which results in lower costs >Allows the GP/LP to easily compare and model different parameters and therefore chose a different calculation model that can increase profitability for both parties EG

Talking directly to the asset managers- can you explain how your software enables greater transparency and security while enabling complex calculations? With qashqade, you are able to track and OF review each change in the system via an audit log and at the same time you can restrict access. The software can handle the calculations you need to execute and the input screens are developed to make changes easy and user-friendly. This helps to increase transparency for all such calculations compared to Excel, where it is very difficult to review and monitor each calculation.

• Productivity, Strategy, Profitability

Are there any advantages for institutional clients who may face greater regulatory

pressure in light of Basel III amendments? The regulator wants a higher transparency and OF wants to ensure under Basel III that the investor understands the risk of failure and for the GP to establish enough security to ensure that such failure is not happening. The qashqade software can do exactly this for carry calculations and carried interest allocations. Tell us more about the increasing role Venture Capital is playing to bridge the debt financing gap in place of commercial banks? The increased capital requirements forced OF upon banks and focus on low risk assets, has led commercial banks to reduce their appetite to issue loans in general but in particular for startups. Venture capital has filled this gap with different approaches and models to manage that sort of risk. EG

What groundbreaking changes do you see on the horizon for the private equity sector within the next 10 years? The economic environment with the need to OF invest in PE for the necessary profits will lead to increased competition in deal flow and therefore increase cost awareness for all parties, which will lead to more standardisation and automation, in addition to transparency. EG EG

For further information, please visit: www.qashqade.com

Venture capital has filled this gap with different approaches and models to manage that sort of risk.

www.executive-global.com

Spring 2019 â€˘

FINANCE

SORQ

Photo: Number1411/ Shutterstock.com

FinTech and the Future of Finance A few years ago, Vladimir Remi, CEO and Founder of SORQ, looked at the financial services outlook and saw that the FinTech space was an up and coming industry. With ten years of experience working hand in hand in startups and in traditional, deep-rooted financial institutions, Remi knew there was an opportunity to help the industry grow. Article by

Vladimir Remi FOUNDER & CEO, SORQ

eeply passionate not only about growth, but sustainability and transparency, Remi founded SORQ. Designed to provide the consulting services young startups need to be successful, Sorq is committed to transparency. “We knew that this industry was primed for growth, and we saw all of the venture and institutional money coming in after the initial explosion in crypto-currency. We also knew that a lot of great ideas would fall flat on their face when confronted with the strong regulatory framework that financial services operates in.”

AIDING REGULATION AND COMPLIANCE Here’s where SORQ helps its customers navigate. Transparency and compliance are huge cost centers for most traditional financial services companies. FinTech seeks to disrupt these older financial institutions, with a vast array of transfer and payments technologies that have the potential to revolutionise the entire financial services industry. From licensing to ongoing compliance and training, FinTech was seriously lacking in its understanding of how the financial services industry and its regulators work.

“There’s such a focus in the FinTech space on disruption and being disruptive that the innovators lose sight of the shore, and are adrift out at sea without knowing where they’re going to end up. They just want to push and push, and at the end, they hit that sea wall of regulation and compliance and can go no further. Then the money dries up because they’re not able to get the licensing and put into place the procedures they need to handle other people’s money. We wish we could’ve gotten to those innovators sooner.” – Vladimir Remi A SHIFT IN TRENDS The trend toward digitalisation of technologies and transfer payments has brought opportunities for investors. Great investment opportunities are born in risk, and being able to navigate those risks is what makes a company ultimately a successful company or a failed venture. The number of FinTech institutions is growing and interest from investors and the market rising, causing increased scrutiny of regulators. This creates an opportunity for smart FinTech innovators to add another arrow to their quiver of competitiveness. Transparent compliance with the rules of financial services and being prepared for future regulations that are down the road, which can differentiate. If the future of finance is FinTech, then we can expect that future will come with some of the same regulatory issues that financial services already face.

• Productivity, Strategy, Profitability

Like Uber did with taxis, FinTech seeks to move faster than the regulators in creating a new world for transfer payments and cross border transactions. The stakes in financial services are much larger, and a partner like SORQ can help organisations

TRANSPARENT COMPLIANCE WITH THE RULES OF FINANCIAL SERVIES AND BEING PREPARED FOR FUTURE REGULATIONS THAT ARE DOWN THE ROAD, WHICH CAN DIFFERENTIATE.

to navigate the headwinds of compliance that can capsize them. Contact SORQ today to grow your FinTech journey. EG

For further information, please visit: www.sorq.io

O'CONNOR PORTFOLIO MANAGEMENT, LLC. 201 East Davis Boulevard TA M PA , F L 3 3 6 0 6 813-254-5120 2 0 2 0 N . L a s P a l m a s Av e Los Angeles, CA 90068 213 632 8121

LEGAL & ADVOCACY

MJM Limited

Bermuda Offshore Trusts And Estates Advisory Our interview with FOZEIA RANA-FAHY, Director at MJM Limited, explores the advantages and opportunities for exponential wealth generation and succession planning in Bermuda, as Executive Global sit down with one of the country’s foremost award-winning law firms servicing High Net Worth clients. How may the offshore jurisdiction of Bermuda benefit High Net Worth Individuals in effectively protecting their assets? Bermuda is a jurisdiction that enables great FRF flexibility in terms of wealth planning and has the added advantage of being underpinned by a strong legislative system based on the common law legal system of England and Wales. This makes it is a great choice for asset protection. EG

What challenges do you typically come across EG when handling complex international family trusts? Often complex family trusts have a long FRF history, and the reasons for establishment may have changed since the establishment of the trust, in particular in the second and third generation. This can lead to difficulties in fulfilling the expectations of the various branches of the family, each of which may have very different needs and tax planning considerations. The advent of ever increasing burdens of AML/ATF regulation, record keeping and monitoring requirements can become challenging to meet, especially in discretionary trust structures that include multiple generations. Are there any particular advantages that Bermuda’s link with the UK may provide to clients as a British Overseas Territory? EG

The application of well-established principles of trust law, originating from English law, as well as its sophisticated legal system, an experienced judiciary, and ultimate appeal to the Privy Council gives the jurisdiction both stability and certainty. FRF

What differences does Bermuda provide for trusts and asset protection when compared with most other civil law jurisdictions? Bermuda has statutory protections to prevent FRF the application of forced heirship rules that may apply in civil law jurisdictions. EG

Describe the difference between a purpose and a charitable trust, and how these may be used? Purpose trusts that are charitable in nature have FRF always been available, within certain well established limitations. Non charitable purpose trusts are available for both commercial and philanthropic goals, and provided that the governance of the purpose trust in any given situation is properly structured, purpose trusts are an effective model for modern commercial transactions. EG

Can Bermuda offshore incorporation also be combined with trust administration to increase the integrity of protection for beneficiaries? Often trusts own and control complex and FRF varied assets, which are more effectively

• Productivity, Strategy, Profitability

managed by corporate ownership or management companies that employ properly trained professionals to run and manage the trust’s assets. The trust and the underlying companies can be administered and managed in conjunction with one another with an appropriately arranged support service, whether employed or outsourced. What is it about trust legislation in Bermuda that makes it so beneficial to clients? Bermuda’s legislation and framework is geared FRF to international trust administration, and a number of provisions have been applied to assist trusts in re-organising or approving revisions to the trust instrument in an efficient and timely procedure. This makes Bermuda the primary offshore jurisdiction for updating and revising trust structures where it is expedient to do so. EG

As an award-winning firm consistently recognised for your performance, what can HNWIs expect when seeking your counsel on wealth and succession planning? MJM has an experienced trust and private FRF client team that provides a first class personal service to HNWI clients. EG

For further information, please visit: www.mjm.bm

MJM has an experienced trust and private client team that provides a first class personal service to HNWI clients. www.executive-global.com

Spring 2019 â€˘

LEGAL & ADVOCACY

Dr. K Olsen Global Tax Consultants

Why Can’t We Trust the Tax Authorities? There are no greater two surer guarantees in life than death and taxes. There is also absolutely no acceptable excuse for tax evasion. But what happens in cases where the tax authorities get it wrong? And what happens if their decisions are made based on misunderstanding? Article by

Dr. K. Olsen CHARTERED GLOBAL TAX ADVISOR

he author of this article has been working with national and global taxation for nearly 40 years in his capacity as a chartered global tax advisor, tax inspector, adjunct tax professor, tax lawyer and head of global tax. In his opinion, we should not trust the tax authorities. As a result of what he has learned over the decades, he has become very sceptical about the tax authorities because: • Unfortunately some tax officials have prejudiced views and believe that every single taxpayer cheats, in order to avoid paying tax if given the opportunity. Consequently many taxpayers are taxed erroneously. • International taxation is highly complex and not all tax officers have the necessary knowledge, education, experience or even interest to make a correct, professional assessment. • It is hard to believe, but many tax authorities ignore the taxpayers’ rights – constantly. • Some tax authorities lack proper routines, procedures and even willingness to assess taxpayers in a lawful way. • In the author’s experience the tax authorities often prefer to impose as much tax as possible, rather than perform a correct tax assessment. • Tax officers suffer no consequences if they make wrong decisions - decisions that could be crucial for taxpayers. • Some tax authorities threaten taxpayers with statements like: “You have not done anything wrong, but we need the revenue and if you do not accept the tax adjustment, we will be on your back for the next 3-5 years”. Tax evasion is unacceptable, but what about situations where the tax authorities make wrong or unlawful decisions, based on misunderstandings, a lack of knowledge and / or a prejudiced belief that every taxpayer is cheating, for instance? This author believes that the tax authorities sometimes cheat

Photo: Evlakhov Valeriy / Shutterstock.com

HOW MANY TAXPAYERS SUFFER UNACCEPTABLE AND UNLAWFUL TAX ASSESSMENT? HOW MUCH HAVE THESE TAXPAYERS ERRONEOUSLY PAID IN TAXES AND PENALTIES?

taxpayers for the reasons mentioned, something which is even worse than dishonest taxpayers. The author asks: how many taxpayers suffer unacceptable and unlawful tax assessment? How much have these taxpayers erroneously paid in taxes and penalties? How many taxpayers have had their

• Productivity, Strategy, Profitability

lives destroyed due to erroneous tax assessment? The author believes that we are talking about substantial numbers. We are probably talking about millions of taxpayers who have been incorrectly taxed worldwide. In addition, we are probably talking about billions of dollars which taxpayers around the world have overpaid in taxes and penalties. This is simply not acceptable! Tax authorities around the world, including the OECD, the EU, the G20, the World Bank and the UN, are focusing on tax evasion committed by taxpayers, but why is there a lack of focus on what this author considers to be ‘opposite tax evasion’ – situations where taxpayers face unfair, unlawful and erroneous tax assessments issued by the tax authorities? Based on experience the author believes that we should be very skeptical about the tax authorities and question and challenge all tax inspection reports, decisions and guidelines etc. Trusting the tax authorities can be a pretty costly business. EG

For further information, please visit: www.knutolsen.com

Our collective knowledge and experience across practice areas enables us to deliver integrated legal advice and effective solutions to our clients. Formed in 1990, MJM Limited is one of Bermuda’s leading law firms with a diverse local and international practice. Each practice area is led by a Director who is recognised as a leading practitioner in Bermuda in their respective field of specialisation. Further information about our expertise, related services and personnel is available on our website at www.mjm.bm

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SPECIALIST AREAS OF PRACTICE Aviation and ship finance Civil, criminal and commercial litigation Corporate borrowing and bank finance Directors’ and officers’ liability and shareholder disputes Employment law Establishment of investment businesses, brokerages and advisors Family law Incorporations Individual and commercial private client Insolvency, liquidations and work-outs International equity offerings and listings (IPOs) Joint ventures and shareholder agreements Mergers and acquisitions Mutual funds, hedge funds and investment partnerships Reinsurance and captive insurance Residential and commercial real estate Solvent schemes of arrangement and corporate reconstruction Wills, trusts and estates

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P.O. BOx hM 1564 haMiLTOn hM Fx BErmuDa

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LEGAL & ADVOCACY

SOG / Samardžić, Oreški & Grbović

Photo: KorArkaR / Shutterstock.com

Strengthening E-commerce in Serbia According to the latest measurement, e-commerce in Serbia is lagging behind other forms of trade and it is in the initial stage of development. Therefore, the Serbian Ministry of Trade, Tourism, and Telecommunication (“Ministry”) is currently preparing the amendments to the E-commerce Act. Article by

Article by

ASSOCIATE, SOG / SAMARDŽIĆ, OREŠKI & GRBOVIĆ

PARTNER, SOG / SAMARDŽIĆ, OREŠKI & GRBOVIĆ

Miloš Velimirović

Nevena Milošević

imultaneously, the Ministry is preparing adequate measures to improve e-commerce in Serbia through the education of consumers and online traders. USAID Cooperation for Growth Project (CFG) supports the Ministry in this project in order to strengthen e-commerce through the removal of barriers and by providing incentives for online trading.

DEVELOPMENT OF E-COMMERCE As expected, the amendments to the E-commerce Act and bylaws, which will be adopted based on the amended Act, will introduce several novelties into the Serbian legislation, including the establishment of an online dispute resolution platform (ODR) and E-Trustmark. ODR will help consumers and online traders to resolve all potential disputes out-ofcourt. This mechanism will enable easier and faster dispute resolution and reduce costs. Moreover, online traders will be able to show their commitment to high standards of customer care and improve their ranking on the market. E-Trustmark, an online mark

which confirms that an online trader complies with the standards set up by the issuer, will also improve the position of the online traders who may use E-Trustmark. Additionally, the Ministry is analysing the possibility of defining distributed ledger technology (DLT) and smart contracts under the E-commerce Act. Currently, Serbian legislation does not define those terms, nor any other DLT related institutions (cryptocurrencies, blockchain, etc.). Bearing in mind that DLT represents the new wave of technological development and that it has enormous potential for innovation and economic growth, Serbian policymakers are putting significant efforts in finding the way for placing DLT into a relevant legal framework, which would ensure legal certainty for any individual or a company dealing with DLT. Lack of consumers’ trust in online payment services and quality of products ordered online, as well as the limited number of available large platforms, are defined as some of the major causes

• Productivity, Strategy, Profitability

of undeveloped e-commerce in Serbia. Hence, the Ministry plans to organise numerous workshops and education programs which will encourage consumers to purchase products online and inform them of their rights when shopping online. Additionally, the Ministry aims to educate potential online traders on benefits which they can gain through online trade and encourage them to offer their products online. IMPROVING PAYMENT SYSTEMS On the other hand, the Serbian National Bank is constantly improving online payment systems. As of March 2019, Serbian citizens are able to effect online payment through a facial recognition system. The face recognition payment system represents a significant technological innovation which offers both, safe and fast payments. Simultaneously, the security of the traditional online payment system is improved. Bearing in mind all mentioned above, one can tell that the Serbian authorities are on the right way to establishing an efficient legal framework which would allow for the further development of e-commerce and put Serbia on the map as a leader in the field of e-commerce in the region. EG

For further information, please visit: www.sog.rs

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FDI & INWARD INVESTMENT

Investment Promotion

FDI, Free Trade Zones and Investment Promotion In the last two decades of the twentieth century, free trade zones became an established phenomenon. Pilloried by labour activists as much as they are lauded by global business, free trade zones (FTZ) have become an enticing point of entry for foreign direct investment, says Oliver Taylor. eared towards facilitating a host country’s economic ambitions, many also argue that it remains preferable that governments institute such arrangements attractive to business, as opposed to potentially worse evasion and exploitation in an unregulated arena. Free trade zones are regulated, but the rules often differ substantially from a country’s typical labour and tax laws. Evaluating the phenomenon purely on the basis of whether or not it enables the desired economic outcomes, it would appear that FTZs are more a blessing than a curse. Onerous labour legislation, local taxes and a host of other typical costs normally associated with offshore business are shelved in the FTZ. While labour rights advocates frequently bemoan their establishment, as they typically flout hard-won gains made by labour around working hours and accompanying pay, they do provide employment, put money into the local economy, and also theoretically allow for cheaper, higher quality goods for the global consumer.

FTZS AND FOREIGN DIRECT INVESTMENT The United Nations Conference on Trade and Development (UNCTAD), following on from its World Investment Report 2014: Investing in Sustainable Development Goals, notes that today, “Foreign direct investment is the largest source of external finance for developing countries,” and that the “potential benefits of foreign direct investment include the creation of higher skilled jobs, the introduction of technology and innovation and improved access to international markets.” As countries across the globe realise their need for consistent, wholesale foreign investment to achieve infrastructure and other goals, FTZs have emerged as one route to enabling foreign direct investment (FDI). At the outset, FTZs made a fairly simple offer of

less restrictions, less operating costs and greater profits for any business willing to operate on a country’s shores. While that value is still present for the companies that avail themselves of the offer, UNCTAD’s agenda of sustainable development has suffused the arena with a positive ethos, often making FTZs an attractive component of a country’s investment promotion. Looking at infrastructure and a host of other development as indicative of a country’s citizens’ quality of life, UNCTAD notes that, when it comes to large expenditure, “The public sector may be unable to fill this gap, in particular in low-income countries, and private sector investment, including foreign direct investment, should be mobilised for Goals-related projects in areas such as power generation and electricity supply, infrastructure and water and sanitation, as well as food security, climate change mitigation and adaptation, health and education.” Seen from the point of view of the investor, it’s only logical that FTZs and other pitched incentives are attractive as an investment, facilitate a simplified investment/return arrangement, and also come with a greater feel-good factor than before. With organisations like UNCTAD and many countries’ investment promotion arms tying sustainable development goals into foreign direct investment, FDI today has lost much of its unknown character, as well as the simplistic notion that it is all about exploitation and squeezing profits. Indeed, while countries with

• Productivity, Strategy, Profitability

highly developed labour organisation often face opposition to FDI’s terms and conditions, foreign direct investors are of necessity transparent, highly enabled and optimistic about the commercial future. Rather than none of the benefits of a thriving business community, FTZs enable a country to accrue greater benefits, compared to if there were no incentives for foreign companies or individuals to be present. On the whole, it is government that forfeits the most from FTZs and other investment promotion incentives. Rather than worker exploitation, the compromise required of free trade zones and other initiatives come mostly from government tax concessions and waivers. Again, more goes into the coffers than is lost by enticing foreign business, and such overtures have shown what kind of social upsurge is possible when capitalism is allowed greater free reign, without typically cumbersome bureaucratic interference. FOREIGN DIRECT INVESTMENT PROS AND CONS Cognisant of the upswing in overall economic prosperity, innovation and established enterprise, many countries have entered the new millennium determined to attract foreign investment as a regular component of their development and functioning. There are challenges, particularly in developing countries, where labour runs the risk of exploitation, and investment promotion is sometimes punted on the back of waiving health and safety concerns that would create uproar in developed nations. That said, the approach never became established, as the modern, connected globe allows consumers to tie directly into product sources and practices, making modern investment promotion a transparent, positive opportunity. Further challenges typically present in “structural barriers” to FDI, and FTZs and other investment promotion strategies require of government a commitment to an astute monitoring of such schemes over the years. Governments need to ensure that the in-house benefits are not only accrued, but channelled correctly towards stated goals, while simultaneously, constantly reviewing incentives to compete for FDI against all other countries’ offers. While not a typical case, the rise of giant China over the last 20 years is a classic example of a government “fixing” things

FDI & INWARD INVESTMENT

Investment Promotion

to favour business and its social benefits. From the backwaters of a bygone era, China has demonstrated phenomenal growth, and the emergence of one of the biggest middle-class populations in the world. A subtle, relatively unsung and yet pervasive, documented opportunity typically follows FDI into any host country. Looking at but one arena as an example, the boost provided by FDI in developing (and established) countries’ agricultural sector can be substantial. While the benefits include enhanced food availability, greater employment and productivity, as well as the accompanying poverty reduction and access to capital, the real opportunity stems from the simple presence of commercial enterprise. Technology transfer is inevitable — something China is shockingly good at — and the existence of vested business interests in a host country gives rise to new vistas. The mere fact that labour is exposed to (capitalised) business as usual, allows for far greater innovation, entrepreneurial activity and a heightened global awareness — and this is reflected in GDP. Very importantly, government’s role in promoting and maintaining FTZs and other investment incentives is critical. Figures that point to an indeterminate impact on GDP from FDI need to be appraised in terms of the government’s actions and performance. While some point to a potential weakness in FDI promotion, being that benefits don’t filter down to the population, this is typically the result of poorly structured or corrupted investment offers, rather than an innately negative impact on the population through facilitating foreign business.

FOREIGN DIRECT INVESTMENT PROMOTION Free or freer economic incentives and liberalised trade zones are an effective means for any regime to attract investment. If anything has become apparent from their establishment, however, it is that effective monitoring to ensure capital projects and general social upliftment are enabled through FDI is essential. From an investor’s point of view, a simple gauge on returns will determine how attractive any FDI offer might be. Effective government with a commitment to allocating revenue correctly and staying the course en route to infrastructure or other development, makes the deal that much sweeter for all parties. Effective investment promotion hinges on presenting the right offer with attractive concessions

FOR BOTH DEVELOPED AND DEVELOPING NATIONS, FDI HAS BECOME A MAINSTAY CONTRIBUTOR TO THE FISCUS, JUST LIKE DOMESTIC TAX, EXPORT AND BOND REVENUES.

that also facilitate the ease of doing business overall. Coupled with transparent, strong government, FTZs and other investment offers have matured into a positive social presence. Every developed and developing country has an FDI strategy, and each has their own global connectivity and supporting infrastructure. In matters of FDI promotion, roads, ports and airports become essential, as important as tax concessions and liberal labour policies. Notwithstanding the fact that FTZs and other incentives are usually first colonised by corporate business, smaller businesses too are starting to investigate FDI incentives as a route to export markets, detractors who never move beyond a wholesale labour focus. Making FDI work requires fair labour practices, minimal taxation and other associated costs of doing business in the country, sufficient supporting legislation and infrastructure, as well as effective government directing revenue and managing goal outcomes. From an early association with sweatshops and other unpalatable implications for consumers, the globalised economy today has not only made FDI promotion a staple pursuit of almost any country in the world, but it has made the very idea of FDI positive and socially beneficial. With the presumption of decent government, the figures go to show that FDI promotion and facilitation typically have a gradual but persistently beneficial effect on national prosperity. For both developed and developing nations, FDI has become a mainstay contributor to the fiscus, just like domestic tax, export and bond revenues. EG

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Spring 2019 •

FDI & INWARD INVESTMENT

Singapore FDI

The Sensation of Singapore Singapore has long been a rather unique business hub among Southeast Asian nations. Remarkably and persistently resilient to the last few decades’ financial woes, the country’s economy has been built to thrive on foreign direct investment (FDI), says Rachel Smith. he United Nations Conference on Trade and Development (UNCTAD) World Investment Report of 2018 shows Singapore as the fifth largest recipient of FDI during 2017. This is in spite of China’s lure to the north, and the diversified millennial taste for emerging market investment. The massive island off the Malaysian coastline has weathered the last few years’ economic downturn well, and remains determined to be the principal fintech and investment hub of the Asia-Pacific region.

SINGAPORE BANKING HUB SET TO HANDLE INVESTMENT Seen as an extremely geared and dynamic investment destination by both corporates and individuals, Singapore shows an aggressive tenacity in the face of current markets in furthering its aims. For one thing, many global banks have migrated to Singapore, and the island is known as a regional banking hub. Singaporean banks have attained a delicate balance between strong secrecy and sufficient transparency to stay on the Organisation for Economic Co-operation and Development’s (OECD) “white list.” Capital Gains tax is lax or non-existent in Singapore. Property acquisition and the proceeds of financial instruments don’t attract Capital Gains tax. If authorities perceive such gains to be the proceeds of a trade, however, tax might be levied. VAT or General Sales Tax (GST) is set at 7%, having been introduced in 1994 at the initial rate of 3%. All companies self-identify for GST if annual turnover

exceeds SGD 1 million. Especially attractive to those who wish to minimise business and investing costs, the sale or rental of property, as well as financial services, are GST-exempt. Foreign exports and their associated international services are also zero-rated. Any foreign company that registers for GST is obliged to employ a Singaporean agent to calculate and pay over GST. Corporate tax is attractive at a rate of 17%, unchanged since 2010. Corporate taxation also allows for a total annual exemption of some SGD 152,500. Personal taxation begins for those earning SGD 20,000 a year at a rate of 2%, climbing to a still-modest rate of 22% for individuals earning SGD 320,000 or more per annum. Directors and consultants’ fees are typically taxed at 20%. Overseas income that is banked in Singapore, and not the product of a local partnership, remains wholly tax-free.

WITH SUCH A SAVVY AND ESTABLISHED, FOREIGNFRIENDLY BUSINESS ENVIRONMENT AND A HEALTH ECONOMY, FUTURE PROSPECTS IN SINGAPORE LOOK GOOD.

Photo: Food Travel Stockforlife / Shutterstock.com

• Productivity, Strategy, Profitability

SINGAPORE AS A HIGHLY FAVOURABLE INVESTMENT HUB In an economy that in 2017’s final quarter sat at an 11.2% growth rate, the (foreign) purchase of property and application for citizenship remains simplified and unambiguous. Any legal immigrant can apply for citizenship after two years of permanent residence. The only possible downside for some individuals might be that Singapore does not allow its citizens to hold dual citizenship. Employees of Singaporean companies or those who have a local spouse are also eligible for citizenship. It’s a simple matter for foreigners to buy property in Singapore, although only nationals are eligible for incentives such as the subsidised housing offered by the Singapore Housing & Development Board (HBD). As a future prospect for FDI, Singapore shines in the region. Detailed and evolved Trust laws exist in the country, and are based broadly on identical British legislation. All Trust entities are regulated under the auspices of the Monetary Authority of Singapore, with governance based primarily on the Trustees Act established for the purpose. In 2010, PwC mooted Singapore to trounce Hong Kong in its respective asset management sectors. With such a savvy and established, foreignfriendly business environment and a healthy economy, future prospects in Singapore look good. Anyone looking for a dynamic, sleek investment portal that spans the globe would do well to tally Singapore’s potential against other investment havens. EG

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Fiscal Policy

Robotics, Despotism And The Problem With Universal Basic Income Universal Basic Income, Citizen’s Basic Income, Basic Income Guarantee, Universal Demogrant, call it what you wish. All these names trickle down to the same principle: everyone should be entitled to a monthly subsidy of a few hundred dollars, regardless of their status or income, writes Thomas Hughes. his concept rests on the idea of easing some of the economic constraints from society’s poorest echelons, thus helping them meet their basic needs and motivating them to progress. Many positive aspects have been promised by the proponents of the Basic Income. In theory, it should facilitate the process of finding a job for the unemployed, while avoiding the burden of stigma that comes with depending on state welfare. Additionally, it has been claimed to simplify the administrative processes, guarantee independence for every citizen and restore their free will. Last but not least, the advocates of BI offer it as a solution to unemployment related to technological

advancement, where robotics and AI will render many manned positions obsolete. AN IDEALISTIC EXPERIMENT The list of potential benefits gets quite extensive, so it’s no surprise that prominent politicians around the world are already actively considering the implementation of Basic Income, or at least, parts of it. Why wouldn’t they, right? Their nations will enjoy an increased quality of life, reduced unemployment and a boost in overall prosperity. Of course, this is only a theory that has yet to be seen in action on a grand scale. However, tests have already been attempted and the outcome isn’t as shiny as people make it out to be.

• Productivity, Strategy, Profitability

In fact, the Finnish government has recently run the experiment to verify if it works in practice. A group of 2000 unemployed Finns aged 25 to 58, were randomly selected to receive €560 each, every month, between 2017 and 2018. As a result of the experiment, it has been demonstrated that the universal income did not manage to increase the experimental group’s employment rate in comparison to the control group. On the other hand, the level of relative well-being has increased among the beneficiaries of the experiment - naturally, as they received extra free money for an entire year. However, the increase in well-being is just an effect, but not a solution. Where the BI’s test falls short is in solving the long term issue of

GEOPOLITICAL AFFAIRS

Fiscal Policy

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unemployment. The idea of universal income may seem particularly attractive at first glance, yet it becomes clear that it has not managed to propel the experimental group closer to independence. On the contrary, many economists criticise this approach for having a dis-incentivising effect, as the population inevitably becomes hooked on state assistance. Furthermore, the funds for the program have to come from somewhere, and those who would bear the burden of financing it by their taxes, could easily lose the motivation to develop their productive activities as their money is being funnelled away. TO EACH ACCORDING TO THEIR NEED For instance, if an entrepreneur is taxed a sum of money every month in order to subsidise those who remain unemployed, he is losing profits without any tangible benefit for himself. Of course, those without a job get monthly financial support, but it does not render them independent. In a way, they are still tied down to the benefits issued by the state, which has been demonstrated by the Finnish experiment. On the other hand, if the same entrepreneur keeps that taxed sum and instead invests it into further developing his business, this capital will generate new wealth that, in turn, will be re-injected into the economy. As a result, a prosperous business is more likely to create new jobs in the sector, thus offering a wider range of opportunities for www.executive-global.com

employment. This way, the entrepreneur benefits and adds value to his community, helping drive the economy and combat unemployment. Everybody wins. Speaking of employment, some bring up the issue of robotisation as we have mentioned earlier. The technological advancement, they fear, will result in mass unemployment which could be fatal for the economy and world stability as a whole. According to its advocates, the universal income would be a solution for those who would end up out of a job taken by robots. But, before we jump to conclusions, let’s take a look at the relationship between the advent of AI and unemployment. Admittedly, the fear of those whose profession might disappear is understandable. However, just as it happened with many jobs before the industrial revolution: while some perished, new ones took their place. That same fear can be witnessed today, in the digital era. THE PERPETUATION OF POVERTY Technological transformations generate productivity gains, while some jobs are transformed and others become obsolete. These gains translate into more competitive (better and cheaper) offers for consumers. The most connected and automated countries in the world serve as the validation of this argument. Their successful and inclusive labour market models demonstrate that technological innovation has nothing to do with the issue of mass unemployment. So, rather than listen to those who agitate our fears by making perilous predictions about a conflict between AI-powered corporate interests and an unproductive population, let us give ourselves the means to profit from the development of new technologies. Everyone can participate in the creation of wealth and reap the benefits. The fallacious, fearmongering narrative being associated with robotisation should not be used to justify the “inevitable need” for universal income. If anything, high unemployment rates in Europe and North America are caused and perpetuated by inadequate education systems, often disproportionately elevated unemployment compensation, as well as highly regulated and inflexible labour markets that make it difficult for new, or low-skilled candidates to find work. Until these factors are solved, the universal income will only be brushing the problems under the carpet. While universal income can relieve some shortterm economic constraints, it essentially keeps the poor within the trap of long-term governmental assistance, which only perpetuates more poverty. It creates a self-sustaining cycle of dependency, just like the failures of all redistribution policies in collectivist countries. Social progress is a matter of incentives that only a competitive and innovative market economy can achieve. The labour market must remain inclusive, it must create opportunities for young workers to integrate it and for declining professions to adapt to evolution. Currently, it is not the case for nations that experience high unemployment rates. To solve these issues, it is crucial to restore a system of free competition and sustainable business practices.

Beyond a heralded economic failure, the BI initiative opens the door to a dangerous collectivist trend.The right to a universal income would allow the state to take charge of each individual from the cradle to the grave and create an unlimited dependence on the administration. The greater the amount, the more reliant on the state a person becomes. BI claims to downsize bureaucracy, abolish benefit fraud and strengthen democracy. However, so long as we live in a world where Governments and Central Banks control the issuance of currency and credit, as well as the fiscal policy that governs our lives on a daily basis, corruption will always exist and persist. A REDISTRIBUTION OF WEALTH If anything, the system of universal income will land us in the clutches of communism - the same system that has clearly failed to promote wealth and progress as witnessed in Mao’s China, Pol Pot’s Cambodia, or Trotsky, Lenin and Stalin’s Soviet Union. Central Banking and control over the issuance of credit, is a core tenet of the Communist Manifesto. Judging by the historical track record

UNIVERSAL INCOME IS ALSO A MORAL ISSUE. IT SUGGESTS THAT THE MERE FACT OF EXISTING GIVES ONE THE RIGHT TO ENJOY THE FRUIT OF OTHERS’ WORK WITHOUT THEIR CONSENT.

and preponderance of collectivist ideology to lean in the direction of outright despotism, one can only conclude that a society thrives best under a system of limited government and maximum liberty for business. Taxation and state-controlled redistribution of wealth, as the BI system promotes, will not lead to increased safety, better working conditions and reduced inequality as it claims. No state following a communist doctrine has been able to achieve a fair repartition of social and economic classes, but it did result in overpowered governments and an omnipotent elite. One could say it’s ironic that Basic Income proponents like Andrew Yang and Elon Musk now promote a collectivist agenda after having built their empires thanks to capitalism! Yet it is exactly through collectivism that absolute power is consolidated around undisputed rulers. Universal income is also a moral issue. It suggests that the mere fact of existing gives one the right to enjoy the fruit of others’ work without their consent. With this system in place, we are destroying the foundation of civilisation and responsibility, while dressing it up as autonomy and compassion. EG Spring 2019 •

GEOPOLITICAL AFFAIRS

Global Trade

One Belt, One Road: The Belt And Road Initiative Six years have passed since the launch of the One Belt and One Road Initiative. During this time, the circle of China’s international friends has continued a steady expansion and the network of its partners rapidly spreads around the world, says Rachel Smith. he spirit of the Silk Road project, characterised by peace and cooperation, openness and inclusiveness, mutual learning and borrowing between cultures, collective benefit and an overall win-win scenario, is recognised and supported by an ever increasing number of nations. The initiative has already become a pillar of international welfare with great value to offer and has given a new impetus to the development of the world economy. At the end of April, the 2nd High-Level Forum on International Cooperation saw many of One Belt and One Road Initiative’s supporters come together in Beijing. The summit was attended by nearly forty of the world’s most prominent leaders, as well as guests from every country that is involved in the project. Considering that there are a little less than 200 countries in the scope of the initiative, it means that about 60 percent of the world is partnered with the OBOR. While it is well known that allied nations like Russia will play a big part in the upcoming forum, it’s also worthy of noting that western European nations are also not missing out on the opportunity that China offers with its project. Countries like Italy and Switzerland have chosen to collaborate with Beijing on the project. In fact, the authorities of Switzerland and China will sign a memorandum of understanding on cooperation within the framework of the One Belt and One Road Initiative. The

document will be signed during the official visit of Swiss President Uli Maurer to China from the 22nd to the 30th of April, as reported by the Ministry of Finance of Switzerland. EXPANSION OF WORLD TRADE FLOWS The latter has emphasised that the purpose of the memorandum is to strengthen cooperation in trade, investment and project financing in third countries along the OBOR routes in accordance with the basic principles of collaboration and in the framework of international standards and legislation in relevant countries. After signing the document in late April, Switzerland will become the 4th country in the Schengen zone of the European Union to officially agree to cooperate with China on this large-scale infrastructure and economic project. Italy, Portugal and Greece have already signed their accords. This initiative puts new accents in the development of international relations. As expected, it will further shift the center of gravity of the world economy and expand intercontinental trade flows. Increased attention to the project is due not only to its scale, but also to the wide range of investments and perspectives provided by the potential participating countries. China seeks to expand the framework of the OBOR through the maximum possible number of projects implemented in the partner

• Productivity, Strategy, Profitability

countries, deliberately giving them the initiative to conceptualise and develop investment proposals. Having succeeded in creating the financial basis of the strategy under consideration and reducing potential political risks, the Chinese leadership is enjoying the growing interest among the partner countries and the increasing competition between the proposed cargo transportation routes. In time, this will allow China to control the most important elements of Eurasian land transport, which will invigorate inland trade. Other political and economic benefits of the initiative should also not be underestimated, although they are modestly being omitted in

THE INITIATIVE HAS ALREADY BECOME A PILLAR OF INTERNATIONAL WELFARE WITH GREAT VALUE TO OFFER AND HAS GIVEN A NEW IMPETUS TO THE DEVELOPMENT...

GEOPOLITICAL AFFAIRS

Global Trade

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official statements for the moment. At the same time, it is also necessary to refrain from the alarmist predictions of the formation of a new world order and China’s alleged hegemonic aspirations. At this stage, the PRC leadership sees the One Belt and One Road as the opportunity to solve the pressing issues of their own socio-economic development, resource support and reducing regional disparities. Neighbouring countries, regardless of their regional ambitions and economic influence, will also benefit from it with new opportunities. THE RISE OF CHINA So what is the Belt and Road altogether? The name of the new Chinese initiative was chosen based on historical parallels and an emphasis on the ideological component of China’s current positioning. The metaphorical expression “Silk Road” is applied to international transport corridors, referencing the historical importance of the original path taken by the first intercontinental traders. The initiative proposes the implementation of integration projects with a wide range of nations along the road. In 2014, OBOR was officially named a key component of the Chinese leadership’s foreign policy. It is designed to ensure the implementation of China’s long-term development strategy presented by Xi Jinping at the end of 2012. The key points of the One Belt and One Road www.executive-global.com

Initiative are contained in the official report from the three Chinese departments, published in March 2015 under the authority of the PRC State Council. It describes, in a general form, the principles of the initiative, possible routes, mechanisms and priorities for cooperation. Among the latter, interstate coordination of economic policies, modernisation of transport infrastructure, promotion of trade and mutual investments, financial integration and the development of humanitarian ties are highlighted as main tenets. The report’s leitmotif is an appeal to potential partner countries with a call for closer interaction in the political and socio-economic spheres on the basis of the principles of mutual trust and win-win scenarios. It is designed to convince the leadership of neighbouring countries in the initiative representing the embodiment of the dream of a harmonious world community, which will become a significant contribution to the development of humanity. Most experts on Chinese affairs share the government’s official position. They emphasise the unconditional nature of China’s compliance with the interests of partner countries, adherence to the principles of equality and mutual benefit and, which is especially important, neutrality and noninterference in the internal affairs of partner states. Following Xi Jinping, experts refute the assumptions about China’s hidden geopolitical goals, including

the alleged desire of his leadership to create zones of influence or enhance his role in international relations. It is argued that China should not and will not dominate or act from a position of power, but instead adhere to the principle of morality over interests. A CHALLENGE TO WORLD HEDGEMONY The nature of strategic planning in China meets its growing role in international relations and the strengthening of its position in the world economy. The Chinese leadership considers the tasks formulated in the OBOR official report to be among its key priorities. Its determination to implement this ambitious plan is not only met with the approval of potential partner countries, but also serves as the basis for resistance against global and regional competitors. However, the participating nations do wise to reduce possible risks of involvement by critically analysing China’s proposals. While European states are beginning to sign up for the benefits of the One Belt and One Road and participate in the development of new transport corridors in Eurasia as part of the global financial system transformations, the United States and Japan have reasons to impede the initiative. The US has every motive to oppose its primary economic rival’s potentially overwhelming success, but there isn’t much it can offer in terms of constructive criticism. A world that is lead by China cannot be good for Americans, only because it is not fully dominated by the US. Therefore, they formulate such accusations as Chinese predatory economy, imminent corruption, the erosion of sovereignty among small nations under PRC’s influence and a threat to human rights. This rhetoric has been promoted by US officials, including Vice President Mike Pence, again and again. REVIVING INTERNATIONAL TRADE However, barely six years have passed since the initiative has been announced by the Chinese government, and significant progress is already being made. For example, a new capital of Egypt is being built east of Cairo, with a 386-meter skyscraper in the centre, courtesy of the China State Construction Engineering Corporation. China Railway Construction Corporation is adding three metro stations to the Third Interchange Circuit of Moscow’s subway system. Brazil will benefit from the fourth largest hydroelectric dam in the world, in Belo Monte. These are just a few instances of the initiative already at work around the globe, which certainly offers a refreshing alternative to the current state of affairs. The whole purpose behind the Belt and Road is to revive international trade and energise dozens of countries. In order to achieve that, it is crucial to build or upgrade many ports, highways, cities and railways - across the entire Eurasian continent, passing through Africa and then across the ocean to Latin America. Each country is expected to do it on its own, but with the financial and strategic support of China, since it - as the world’s mass production workshop - will benefit from the trade most of all. EG Spring 2019 •

GEOPOLITICAL AFFAIRS

British Politics

ay’s repeated submissions around the exit deal — in effect, a legally binding treaty of nations — have not only stirred public debate over her leadership, but also given rise to a seemingly interminable to and fro between countless parties. Appointed in 2016 — the year in which the citizenry opted to leave the EU — the Conservative Party leader’s premiership has been consumed by issues surrounding Brexit. For many Britons, the current status quo is untenable, as Britain now faces a massive exit bill, as well as many lingering, costly implications contained within the exit treaty. Much of the citizenry is inclined to brush off the UK’s obligations as contained in the exit deal, but the days of Britain fobbing off association and accompanying costs are long gone. In the current malaise, it appears May cannot avoid outraging one camp as she placates another. Nuances aside, there are three principal bones of contention in the exit proposal as it currently stands.

BREXIT ISSUES IN BLACK AND WHITE On two levels — both the public discourse and sentiment, and the ensuing layers of European politicking around national interests — the Brexit deal in its current form has certain innate sticking points. For many Britons, the monumental compromises the nation would have to make in order to effect an exit in its currently proposed form are unacceptable. That said, while the UK’s geography remains unchanged, the nation is no longer an island by any other measurement. The original impetus behind a consolidated EU remains, and global commerce and politics mean that insular Britannia has forever passed. In the mind of the average Briton, however, how exactly that reality extrapolates into a national identity is fraught with unacceptable compromise, at least as contained in the current Brexit papers. The dilemma created by the concessions on sovereignty, economic autonomy, and self-determinacy of the United Kingdom contained in the current proposal are untenable for many parties. In the mooted Brexit, Britain would essentially hand much of its autonomy to the EU on a silver platter, while also providing the union with the hefty sum of £40+ billion. For many, this payment presents more as an “admission of guilt” fee, paid in exchange for not much in return. Particularly to those vehemently opposed to the formation of an EU army, the British payment seems an ideal sum to allow the EU to fund just such a force. Totalling some 585 pages, the “separation agreement” between the EU and the UK addresses three principal issues. Firstly, the future rights of Britons in the EU (as well as those of EU citizens living in the UK) are “clarified” within the current deal. Secondly, Britain’s financial obligations to meet all previously agreed commitments are also addressed in the document. Finally, in a point of much concern, the prospect of a “hard border” on the Irish isle is tackled. Everyone involved in extrapolating the implications acknowledges that a hard border in Ireland needs to be avoided, as there is understandable historical sensitivity around border issues in the country. Custom checks in Ireland are anathema to many Irish and British citizens.

• Productivity, Strategy, Profitability

The Essential Problem With Having A ”Deal’’ With notable commentators stating quite plainly that the UK’s Brexit is no closer to a working solution than before, the implications for PM Theresa May continue to dog her tenure, says Rachel Smith.

GEOPOLITICAL AFFAIRS

Photo: Melinda Nagy, Matias Lynch / Shutterstock.com

British Politics

There is also a seven-page addendum to the exit document, in the form of a far looser, nonbinding political declaration. Therein, both the UK and EU outline their respective imaginings of what future trade might look like post Brexit. Negotiations around this document have yet to materialise, but it appears certain to be another minefield of jostling for national (mostly commercial) access and interests. BREXIT COULD CHANGE UK NEIGHBOURLINESS When in 2017 PM May promised to take the UK out of the EU single market and customs union, it immediately gave rise to a battle to avoid customs control in Ireland. Britain opted out of the single market to avoid becoming an “EU rule-taker,” and likewise opted out of the customs union, remaining free to strike trade deals with other global parties. Britain also rejected the proposed EU backstop, thus keeping Northern Ireland in both the single market and customs union, as the mooted solution would necessitate customs checks for produce ferried on the Irish Sea. Fundamentally, the solution would mean that Northern Ireland would be treated differently to the remaining United Kingdom. Alongside this, the EU also rejected the British suggestion that the UK in its entirety would maintain a de facto customs union with the European Union. Citing the British stipulation that would allow the UK to unilaterally withdraw from such an arrangement, the EU rejected the British solution. The British suggestions further contained the proviso that such a withdrawal would be timed solely at British discretion. The ensuing tussling has meant that “the Irish issue” remains a difficult one to resolve to the present day. British insistence on unilateral decision making and timing within the proposed “customs union solution” resulted in Brussels viewing it as too openended, and thus not a safeguard on the issue. While EU chief negotiator Michel Barnier was at peace with the notion of a UK/EU customs union, thus satisfying UK insistence on maintaining territorial integrity, he countered with tightened terms and conditions. For one, the UK needs to accept that it cannot exit any backstop provisions unless or until the EU is satisfied that there is no possibility of returning to a hard border scenario. In a nutshell, Barnier’s retorts seek to address EU member states’ concerns about a de facto British customs union membership, which lacks the obligations imagined within the single market. Looking to stem an “unfair British advantage,” Barnier proposed Britain be obliged to follow certain EU rules on the environment, competition, labour, tax and state aid. PM May also mooted an extension on Brexit

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beyond the current 2019 timeline, something that could potentially buy time for Britain’s ability to negotiate a fair exit successfully, but also further exasperate the fundamental issues that make union (or autonomy) such a fraught issue in the region. BREXIT TO LEAVE ALL PARTIES FRUSTRATED The jocular legal wisdom that a “good” divorce leaves everyone frustrated with the outcome, seems set to dominate discourse in the approach to Brexit. While the UK stance is clear and unambiguous, all parties nonetheless seem set to submit innumerable proposals of amendment to Brexit that are simply the same idea presented in different words. Blunt realities that concern a sizeable portion of the planet cannot merely be tossed aside, however, nor successfully reworded to better effect. The devil is in the detail, however. Chapter 4, Article 150 of the Withdrawal Agreement states the United Kingdom would remain liable for the financial operations approved by the European Investment Bank (EIB) before the date of entry into force of the agreement, even if the resulting financial exposure is assumed on or after the date of entry into force of the agreement. Moreover, the European Parliament and Court of Justice would take precedence over national laws, the free movement of peoples throughout the EU would supersede national border policy, and the metastasising tyranny would thus continue. THE POST BREXIT FUTURE The EU has arranged for an emergency EU summit scheduled for November 25th, although this too hinges on Britain’s evolving response to Brexit. A strong contingent of EU member states will come into the gathering with the opinion that May’s current Brexit deal asks for far too many concessions on the British side. Pushed as UK negotiators are by British sentiment, an equally strong but opposite opinion is currently coursing through the national debate. This view sees Britain paying an onerous amount to exit a federation of unequal states, and is sacrilege to many who still point to a Europe historically often aligned with British interests. While the potential success of May’s proposal seems to be growing dimmer in the approach to the emergency EU parliamentary sitting, other deadlines are looming. Supposing May’s deal survives its journey through parliament, its own stipulations dictate that the government has until June 2020 to decide whether it will ask for an extension of the transition period, opt for the outlined Northern Ireland backstop agreement, or enter into a permanent customs union. None of these options are palatable to the Brexit camp, and May faces nothing but uphill battles on both domestic and Eurozone fronts. While there is currently some haste to hammer out a trade deal in the absence of joining the union, in all likelihood, future trade discussions will only really gather pace post Brexit. These negotiations are set to be even more protracted and difficult than the Brexit issue itself, and Britain’s Brexit issues remain — and seem set to remain — far from resolved into the immediate future. EG Spring 2019 •

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EXECUTIVE EDUCATION

Association of MBAs

Graduates say the MBA has given them much more than business skills Andrew Main Wilson launches the results of AMBA’s latest piece of research into graduate perceptions of their MBA, with encouraging news for AMBA-accredited Schools Article by

Andrew Main Wilson CHIEF EXECUTIVE, ASSOCIATION OF MBAS

egular readers of my column will know that I strongly believe leaders need much more than corporate acumen and management skills to survive and thrive in modern business. The uncertain climate, in which we find ourselves operating, and the end of ‘business as usual’ mean that employers are looking for high-potential recruits with entrepreneurial flair, emotional intelligence, agility, resilience and a thirst for lifelong learning. As I was reading AMBA’s latest piece of research into MBA graduate perceptions of their degrees at AMBA-accredited Business Schools, I was encouraged to see that Deans and MBA Directors share my opinion and are working effectively with their students to nurture these robust mindsets in the leaders of today and tomorrow.

AN ENRICHING EXPERIENCE Graduates see a substantial uplift in their skills following their MBA, with 93% of the 1,591 MBA graduates polled in our survey agreeing that they have gained substantially more skills to help them ‘do business better’; and more than three quarters of MBA graduates from AMBA-accredited Schools are confident that they can apply all the skills they acquired during their MBA studies in their future leadership roles. Our survey research also highlights the positive impact that AMBA-accredited Business Schools are having on the workplace, with a significant four out of five MBA graduates having the opinion that they are likely to make better business decisions as a result of their MBA; and more than seven in 10 feeling empowered to help their teams operate more efficiently and come up with ideas and solutions which will change the way their organisations work for the better. The findings demonstrate that the MBA qualification provides a valuable means of upskilling, in terms of graduates’ management

Photo: Rawpixel.com / Shutterstock.com

WHAT’S MORE, AMBA’S GLOBAL NETWORK OF MORE THAN 42,000 STUDENTS AND GRADUATES FROM ACCREDITED BUSINESS SCHOOLS CONTINUES TO GROW... acumen, their personal development and the many ways they can make a difference to the organisations in which they work. Our survey respondents were also complimentary about the Schools at which they completed their MBAs: almost nine in 10 (89%) say they would speak favourably about their own MBA experience to prospective students. Graduates who spoke favourably about their MBAs cited a range of positive factors, such as their networking opportunities and increased business knowledge as well as their improved societal

• Productivity, Strategy, Profitability

understanding, ability to think critically, and open mindedness. We look forward to sharing the full report within the next month. A GLOBAL NETWORK As many Business Schools move into graduation season over the coming weeks and months, this research is timely in that it serves to illustrate how, despite challenging conditions, AMBA-accredited institutions are continuing to produce world-class leaders, who are ready to impact communities, economies and societies for the better. What’s more, AMBA’s global network of more than 42,000 students and graduates from accredited Business Schools continues to grow and keep the networks and knowledge acquired during their studies alive and effective long after graduation and throughout their careers and lives. I look forward to hearing many more MBA success stories in the near future. EG

For further information, please visit: www.mbaworld.com Andrew MainWilson is CEO ofThe Association of MBAs and Business Graduates Association (AMBA & BGA)

EXECUTIVE GLOBAL Productivity | Strategy | Profitability

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EXECUTIVE EDUCATION

Sun Yat Sen University

Lingnan’s Leading MBA Program Lingnan began its MBA education with the strong support of the MIT Sloan School of Management in 1998, and now the Lingnan MBA program is among the top ten programs nationally, enjoying an unshakable leading position in South China.

Article by

Xu Xinzhong

EXECUTIVE DEAN OF LINGNAN (UNIVERSITY) COLLEGE

ingnan has a team of experienced faculty members and four professors from MIT, who work with Lingnan's professors to teach core courses. Every year, four MIT professors come to Lingnan to conduct optional courses for International MBA students. In addition, the MBA Program invites many leading global scholars to teach. Lingnan also engages senior corporate executives in course design and delivery. For example, senior executives from Deloitte deliver a course in the area of consultancy for business. Lingnan carries very distinctive international features and for International MBA programs, all courses are delivered in English. International students and exchange students create a diverse and multi-cultural learning environment. MBA students will conduct a study tour at MIT to complete a module of study and visit innovative enterprises in Boston, where they may also have the chance to join MIT Sloan as a visiting fellow for one semester. In addition, MBA students will receive MIT non-diploma certificates on successful completion of the International MBA program. Lingnan conducts dual-degree programs with ESCP Europe and Rotterdam School of Management, Erasmus University. Lingnan encourages second-year MBA students to study at either of the two top business schools in Europe. In addition, the Lingnan MBA center organises study tours with partner schools in Europe, including ESCP Europe, Antwerp School of Management and London Business School. The Lingnan MBA program emphasises Action Learning in the core of its curriculum. MBA students are assigned specific projects that emphasise applying traditional classroom learning into real-life settings while addressing

58 62 EXECUTIVE

• Productivity, Strategy, Profitability GLOBAL • Productivity, Strategy, Profitability

THE LINGNAN MBA CENTER ORGANISES STUDY TOURS WITH PARTNER SCHOOLS IN EUROPE, INCLUDING ESCP EUROPE, ANTWERP SCHOOL OF MANAGEMENT AND LONDON BUSINESS SCHOOL.

Lingnan is located in Guangzhou, the geometrical center of the economic circle of Southeast Asia and therefore it is equidistant from Japan and Southeast Asian countries within a flight voyage of 3 to 4 hours in general. Guangzhou is an open coastal city neighbouring Hong Kong and Macao, and the economic, political, and cultural center, and also the commercial center. It is located in the center of the Pearl River Delta, one of the most economically dynamic and flourishing areas in China. Guangzhou is a major industrial base, manufacturing base and service industrial base in China, with complete industrial supporting facilities and clusters. In particular, the three pillar industries, namely auto, petrochemicals and electronic information, have seen the establishment of modern industrial systems. EG

critical business issues facing corporate clients. Each year around 20 projects are provided to students. Lingnan also creates many integrated international projects, including the China Lab Program with MIT Sloan, the China Seminar Series with the Carlson School of Management For more information please, visit: http://www.lingnan.sysu.edu.cn/EN/index.html and Global Business Projects.

SUN YAT-SEN UNIVERSITY

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HNW LIFESTYLE

Mercedes-Benz

The Mercedes-Benz Amg Vision Gran Turismo The Mercedes-Benz AMG Vision Gran Turismo is a concept car from the German company Mercedes-Benz and the Mercedes-AMG division. It was originally developed as a virtual model for the video game Gran Turismo 6 - the sixth instalment of Polyphony Digital’s highly popular Gran Turismo racing simulation series that was released in late 2013. While it was only a concept at first, later on, it transcended the digital realm and was presented as a full-size real model, says Thomas Hughes. fficially, Daimler AG - the German multinational automotive corporation behind Mercedez-Benz, did not announce the launch of the concept car, but the American company J&S Worldwide Holdings has later publicised the production of five vehicles in this series. The world premiere of the conceptual model was held at the Los Angeles Auto Show. Many design solutions subsequently formed the basis for the successor of the Mercedes-Benz SLS AMG - The Mercedes-AMG GT. Mercedes-Benz is the trademark and eponymous manufacturer of premium-class cars, trucks, buses and other vehicles, which is part of the German Daimler-AMG enterprise. It is one of the most recognisable automotive brands in the world. Mercedes-Benz is headquartered in Stuttgart, BadenWürttemberg, Germany. The brand name was created in 1926 as a result of the merger of two competing firms, Benz & Cie. (Founded by Karl Benz) and Daimler-Motoren-Gesellschaft (founded by Gottlieb Daimler) into a single enterprise - DaimlerBenz. The brand name is derived from the two most significant vehicles of the combined companies Mercedes 1901 and Benz Patent-Motorwagen 1886. In 2018, the Mercedes-Benz brand was valued at $48.601 billion, holding the second place (after Toyota) among car manufacturing companies and eighth place among all brands in the world. According to BrandZ, the company is estimated as part of the Top 100 Most Valuable Global Brands list, where it is ranked 46th among the most expensive brands. It has produced some of the most recognisable automobiles around the world, in nearly every type ranging from personal vehicles to buses and trucks, but its most noticeable achievement is among luxury sedans. However, it has also made a name for itself in the growing supercar market with such products as the Mercedes-Benz AMG Vision Gran Turismo.

The original design of the vehicle saw the light of day exclusively as one of the models of sports cars for the game Gran Turismo. The ultra-futuristic design of the model was inspired by Mercedes-Benz SLS AMG cars, Formula 1 models, a Batmobile, Mercedes-Benz 300SL, racing models of the 1930s and various versions of Mercedes-AMG cars throughout the years. RIGID CONSTRUCTION The actual physical model was created on November 2, 2013, at the new Mercedes-Benz research and development center in Sunnyvale (Silicon Vally), California, USA. The transition of the concept design into reality was entrusted to Mercedes-Benz studios around the world. The final versions were approved in Sindelfingen and Carlsbad as part of the digital design process and then improved upon for physical modelling on a 1:1 scale. The interior of the car was developed by the studio based in Como, Italy. The vehicle’s frame was made out of aluminium pipes, the body was constructed with carbon fibre, and a removable spoiler was added at the rear. As the power unit, Mercedes has used the bi-turbo V8 engine with 591

THE VEHICLE’S FRAME WAS MADE OUT OF ALUMINIUM PIPES, THE BODY WAS CONSTRUCTED WITH CARBON FIBRE, AND A REMOVABLE SPOILER WAS ADDED AT THE REAR.

• Productivity, Strategy, Profitability

horsepower, based on the model of the MercedesBenz SLS AMG GT. The vehicle weight amounted to 1,385 kg. Gran Turismo series producer Kazunori Yamauchi, who had contributed to the initial conception of the vehicle, was present at its unveiling ceremony. During the presentation of the new version of the game on December 6, the attendees could sit behind the wheel of this supercar and get a feeling of its interior in real life. In 2013, the American manufacturer of luxury products J&S Worldwide Holdings announced the desire to release a small series of MercedesBenz AMG Vision Gran Turismo cars. Two copies were intended for Europe and the Middle East, and one for the United States. In total, according to the automotive media, 5 AMG Vision Gran Turismo cars were produced. It is worth noting that, in accordance with the Fox News report, Mercedes-Benz has maintained a very strict position about replicating its own cars and using its brand, particularly in terms of making a profit. This fact was especially noticeable when the German automaker had destroyed the replica of the Mercedes-Benz 300 SL in 2012. Therefore, accurate information about the existence of replicas of the model has been somewhat mythical to this day… So what is this supercar like? According to Gorden Wagener, Chief Designer at Daimler AG, the Mercedes-Benz AMG Vision Gran Turismo represents the perfect interaction of emotional and sensual forms merging with the futuristic touch of intellectually organised modern technologies. The exterior design of the model is borrowed from various racing cars produced by the company in the

HNW LIFESTYLE

Mercedes-Benz

past years, as well as the Batmobile and the more recent Mercedes-Benz SLS AMG. The company’s specialists have made an accent on such features as elegance, speed and alertness in the design of this model. The front of the body is decorated with a large “diamond” grill with a centrally located logo of the company, horizontal thin lamellae and LEDs that can light up in various settings. The air intake located over the windshield and the special design of the particularly elongated bonnet are a reference to historic racing cars. The thresholds of the model are equipped with crimson illumination. Two doors are positioned in the gull-wing style, hinged at the roof rather than the side - a design that was first introduced with the 1952 Mercedes-Benz 300SL race car. At the rear of the vehicle, which is built in a drop-shaped form, there is an exhaust system consisting of eight pipes in the center. Between them, there are vertically integrated taillights. POWER AND STYLE The vehicle frame is made of aluminium and carbon, which significantly reduces the weight of the concept car in production. Overall, in the model’s appearance, smooth bends and powerful wheel arches (a signature touch of Mercedes-Benz sports cars) constitute its unique design. Such classic elements as the studs of the bonnet and the rear hatch, as well as the adjustable rear fender, also reference the classic sports cars models of the past. www.executive-global.com

Angled headlights with specially adjustable colours convey a feeling of sportiness, determination and readiness to leap forth. When it comes to the interior design of the Mercedes-Benz AMG Vision Gran Turismo, particularly in the range of controls and seats, the inspiration from Formula One models clearly bleeds through. The control panel is equipped with beautifully designed futuristic elements. The “floating” glass information panel is located directly above the steering wheel. For better protection against accidents, a transverse partition was installed behind the seats (although the use of a glass control panel would not have sustained any crash tests). The system of the secondary controls with toggle switches in the center of the panel highly resembles the cockpit of a fighter jet. What other notable elements are there? For starters, the engine. According to the plans developed by J&S Worldwide Holdings, the car is equipped with a V8 engine with a working volume of 6,200 cm3 from Mercedes-Benz SLS AMG. The power unit has a capacity of 591 horsepower. In regard to suspension, the chassis of the car is built from an aluminium space frame with carbon-fibre components, amounting to a mass of 1385 kg. The vehicle features a 7-speed AMG Speedshift DCT dual-clutch automatic transmission. On the original conceptual model, presented in Los Angeles, the design included branded alloy wheels manufactured by the Mercedes-AMG division. According to plans,

the American replica built by J&S Worldwide Holdings is equipped with alloy wheels produced by the ADV.1 company. In 2017, Mercedes-Benz has joined forces with one of Warner Brothers’ most noteworthy productions - Justice League, which featured the perfect blend of superheroes as characters, actors and vehicles. Bruce Wayne, better known as Batman is seen driving the Mercedes-AMG Vision Gran Turismo Concept, along with Wonder Woman behind the wheel of a Mercedes-Benz E-Class Cabriolet. A VEHICLE FIT FOR SUPERHEROES For Mercedes-Benz, it was obviously an exceptional sponsorship to allow its innovations and new products to be featured on the big screen. Mercedes-Benz Manager Dr. Jens Thiemer has explained their involvement with Justice League as the perfect partnership to highlight the company’s most ingenious products and establish the brand’s passion in the hearts of the worldwide audience. He has stated that the Mercedes-AMG Vision Gran Turismo and the Mercedes-Benz E-Class Cabriolet are the perfect fit for Batman and Wonder Woman, respectively. In this regard, the Mercedes-AMG Vision Gran Turismo is not just a luxury supercar, it is a celebrity - it is a unique, rare, and unforgettable vehicle that very few people around the globe had the chance to drive. So if you want to feel like Batman, and you’ve got the Batman funds to afford it, don’t miss the opportunity to add this car to your collection! EG Spring 2019 •

HNW LIFESTYLE

Lauren Berger Collecton

The Greatest Luxury of All - Relationships When it comes to the business of indulgence, hostess and entrepreneur Lauren Berger knows that it’s all personal. Maybe we’ve become too cynical. Ask fellow guests at your next cocktail reception for one word to describe what motivates the world’s most successful business owners. You’ll hear responses like driven, ruthless, hyper-focused. Rarely if ever will you hear the word that drives Lauren Berger. Love. Editorial by

Lauren Berger CEO, LAUREN BERGER COLLECTION

or someone who has created an international luxury brand that caters to some of the world’s wealthiest, most demanding travellers, Lauren is an outside-the- box success story. The Lauren Berger Collection, which arranges mansions, yachts, exotic automobiles, and one-of-akind experiences for her discerning guests, was built on love and Lauren’s innate sense of hospitality. Hospitality is never authentic when it’s forced, but in Lauren’s childhood home, hospitality was simply how her mother treated guests. Lauren grew up in New York watching her Greek mother nurture and care for family and friends. Lauren naturally followed in her mother’s wake, emulating the matriarch’s penchant for creating comfortable havens and catering to the comfort of those she welcomed into her home.

ONE-IN-A-LIFETIME EXPERIENCES “It wasn’t something I thought about,” she says now, years later. “It was just what my mother did and what I learned from her.” That intrinsic geniality and concern for others continued to flourish when Lauren wed Dr. Sidney Berger, a world renowned, most brilliant, respected, loved and gracious Doctor of Implantology. “Sidney’s high-profile patients traveled to New York from all over the world to see him,” she recalls. “They needed care and craved privacy. They were privileged, and so required a certain level of luxury to feel at home.” Dr. Berger loved bringing his patients to his own residence to recuperate, and Lauren loved taking care of them. So Dr. Berger and Lauren designed a home to make his patients feel “at home.” And truly indulged. That was really the start of it all,” Berger explains. “They came to us as patients, but left as family. So it was quite natural that when they wanted to return to New York for business or holiday, they would call to ask if she could help with the arrangements. Thus the

concept of the Lauren Berger Collection was born. Just as her mother once went out of her way to cook meals for friends and welcome guests into their home, Lauren has created an enterprise that goes beyond simply providing access to some of the world’s most distinctive properties. To put a fine point on it, guests of the Lauren Berger Collection are not merely hosted, they are welcomed as family. Lauren’s passion for creating once-in-a-lifetime experiences for her guests is simply what she lives for. “ Luxury can be purchased, but genuine hospitality can only be given.” That could be the motto of the Lauren Berger Collection. 250 EXQUISITE PROPERTIES Nonetheless, the collection of eye-catching, refined, and exquisitely located properties provides a significant wow factor that can’t be overlooked. Beachfront hideaways, impressive castles, sophisticated and spacious apartments in the world’s most exciting capitals—these and other such residences are gems in the roster. The Lauren Berger Collection has more than 250 exquisite properties in its portfolio—each identified and acquired through a seemingly endless web of relationships that Lauren has formed over a lifetime. But it’s when those homes are sprinkled with some of the Berger pixie dust that the magic happens. Indeed, where Lauren is concerned, nothing in the guest experience is left to chance, minor details are given major consideration, and no request is too great for her guests. A guest may want to host a formal dinner for forty; Lauren has it all, from the George Jensen silver, Minton china, Baccarat crystal with killer views. Lauren Berger, through long experience and her innate sense of hospitality, understands that luxury is subjective, defined by the details. She isn’t satisfied unless her guests have an experience as bespoke and unique as themselves. But even the most accomplished hostess occasionally requires some additional expertise. And in the case of Lauren Berger, that global lineup of talent is nothing if not impressive. Included in the laudable list of associates are: Maggie Draycott who has worked for British Airways in London for 29 years until recently

• Productivity, Strategy, Profitability

managing the end to end customer experience of their top global client. base that includes CEOs of global FTSE companies, Heads of State, Royalty, and Celebrities from the Film and Fashion world. Maggie managed on a day to day basis the prestigious “invitation only”Club for British Airways most influential client base and created the current loyalty program for their high net worth clients which is hugely successful.Maggie has been voted one of the top 50 most influential travellers by Conde Nast traveler and in Tatler magazine 100 most invited in 2017. Deborah Wince-Smith, President and CEO of the Council on Competitiveness—a coalition of CEOs, university presidents, national laboratory directors, and labor leaders committed to driving U.S. productivity and prosperity. In recognition of profound transformative global challenges and opportunities Deborah founded the Global Federation of Competitiveness and serves as the President of this unique coalition of global leaders committed to advancing sustainable economic growth, inclusive prosperity and security. A WORLD OF LUXURY It’s an elite group of luxury travel and lifestyle specialists, eminently suited to foster Lauren’s brand of-reputation for customised travel. “Hospitality is truly about loving all people,” she explains. “The relationships I have are at the heart of everything I live for. My husband Sidney, who can only be described as my magic treasure, the love of my life who is responsible for what I am made of today and which none of this would have been possible without him. My mother, my world, who has always been my Rock of Gibraltar, my family, whom I could not love more, have been there every step of the way, my team, who are invaluable to me, my associates, of whom I could not be more proud of, my property owners, who have been beyond amazing, and last but not least my treasured guests for their continued trust and loyalty, who have made my life complete.” EG

For further information, please visit: www.laurenbergercollection.com

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Spring 2019 â€¢

HNW LIFESTYLE

Urban Jürgensen S.A.

Urban Jürgensen - The ONE Collection 2019 may turn out to be one of the most transformative years in history for Urban Jürgensen that dates back to its creation in Copenhagen in 1773.

Editorial by

Soren Jenry Petersen

CEO, URBAN JÜRGENSEN S.A.

The watch industry is one of those very old traditional industries where the fundamental construct and rationale for the products have had so many permutations through literally hundreds of years that inventing something new, or trying to apply innovation as a discipline – becomes a Herculean task. A lot of Brands these days try to profess an application as a “innovator” – but in most cases it is fairly desperate application of modern science based materials to old uses (sapphire watch cases ?) or disguising modern materials use in the manufacturing for cost saving reasons as “performance innovation”. At Urban Jürgensen we do things in a completely different way. We believe that in order to create something of lasting value and beauty – it is painstakingly necessary to actually apply real handcraft and old work methods – so that the final end product inherently becomes a handmade work of art. Like it used to be. Urban Jürgensen has been making timepieces like this since 1773, and this approach has meant a decidedly small production, as well as a reputation for ultimate handcrafted classic timepieces that are individually identifiable due to the high degree of applied hand craft.

WORKING WITH THE BEST So when we decided to enter the vaunted category of Luxury steel timepieces – we did so with humility and respect for our history and legacy, but also with the knowledge that this category of products had seen very little news since Gerald Genta laid the foundation with his designs in the 1970´s that have become icons in the industry. Knowing we would make a product that should match up to legends in their category implied a specific and thorough methodology to arrive at a design that could fulfil this promise. So we went in search of the DNA level nucleus of an idea for the design concept. This rarely happens in a committee or as a group think. This is of utmost importance and if you get it wrong – no amount of “design repair” can fix it. The solution came from an old

friend from my Nokia days – with no affinity for the watch business – but he simply send a sketch of overlapping circles and ovals, stating “watches have always been round – so I played around with a bunch of circles”. This became the core concept, so strong that applying the detailed design cues for the rest of the watch became easy. Urban Jürgensen perpetuates the old ways of working with “best talent”. We work with the world’s best at every needed field, and so our partners for case making and bracelet manufacture secures that the final product finish is literally second to none. And we chose medical grade implant steel for the higher quality, better corrosion resistance and lower nickel content than the often lauded 904L variant. We developed a new automatic version of our robust inhouse P4 movement, and a version with an ingeniously simple GMT capability as well – and we could not have wished for a better market reception. A UNIQUE CONTEMPORARY BRAND As the industry continues the desperate search for “the new thing”, collectors who value traditional honest high end pieces increasingly come to see what we do. After that our products speak for themselves. Clients today are smart. They understand that when

• Productivity, Strategy, Profitability

EXTRAORDINARY CRAFTSMANSHIP WATCHMAKING HAS ALWAYS BEEN THE HALLMARK OF URBAN JURGENSEN BUT THE BUSINESS HAS NEVER BEEN ELITIST.

20% of profits goes into marketing – less funds can be put into the actual product. Urban Jürgensen has no intention of becoming an industrialised mass market producer, and has highly selective distribution. See www. urbanjurgensen.com for more information and retailer list. EG

For further information, please visit: www.urbanjurgensen.com

R E C A L L C A PI TA L S E We offer tailor-made financing and trading solutions

The drop-story is simple, if we do it right once the clients spread the word just like rings in the water. AND we donâ€™t want to be considered as just another wave in the ocean. We do things differently and more efficient.

W E H E L P L I S T E D C O M PA N I E S G R O W.

R E C A L L C A PI TA L S E Enhagsvagen 18 187 40 Taby Sweden Email info@recallcapital.com Web www.recallcapital.com Call +46 (0) 8 33 9040

HNW LIFESTYLE

Strand Hill Christie’s International Realty

The Palos Verdes Peninsula’s Finest Lily Liang is an expert of the Palos Verdes Peninsula, a prestigious Southern California coastal community. With over 30 years in the real estate industry Lily’s experience, unparalleled knowledge, and her extensive marketing has set her apart as one of the most seasoned top producers in the South Bay. Article by

Lily Liang

EXECUTIVE VICE PRESIDENT, STRAND HILL CHRISTIE’S INTERNATIONAL REALTY

lients of Lily appreciate knowing the the history of a neighbourhood or house, how many times it has been in the market, and whether or not it the it is still owned by the original owner. There are also homes that Lily has been listing agents for several times in the past 30 years, which allows her to know not only the neighbourhood, but also the neighbours. Lily also assists clients by showing them which streets or blocks are more in demand, which area is more or less popular, and which section seems to have a better appreciation than others. According to Lily, what appeals a lot of people to Palos Verdes is the great weather, clean air, low-key residents, and commitment to family life. Palos Verdes is also a reasonable distance to most places in Los Angeles, with a great education system,

easy parking everywhere, and great city planning with lots of parkland. Being in the real estate industry for more than 30 years, Lily has sold over $1 billion in transactions and was a top 3 agent in the entire county of Los Angeles in 1986 and 1987. Lily is the Executive Vice President of the Strand Hill Properties, which is an affiliate of Christie’s International Real Estate. She started this company in December of 2014 and it has blossomed to be awarded the affiliate of the year in 2016 by Christie’s International Real Estate. Strand Hill Properties has grown from 15 agents in 2015 to 85 agents in 2016 and their sales have increased from $100 million to $1 billion in sales in one year. CIRE offers unparalleled national and international marketing opportunities and collaboration with other CIRE affiliates provide clients with the best real estate experience possible. Many of Lily’s accomplishments also include: Business Woman of the Year by the South Bay Chinese Woman’s Association, featured or mega agent in Time Magazine, Fortune Magazine, Unique Homes, Los Angeles Magazine, ranked top 250 in the USA, and top 10 in the Asian Real Estate Association of America. Lily is also

• Productivity, Strategy, Profitability

a philanthropist and has been a member of the Asia American Symphony Association, board member of LA BioMed, Palos Verdes Education Foundation, Palos Verdes Art Center, and Palos Verdes Library. Also, being bilingual in English and Chinese Mandarin has allowed Lily to have an edge in international buyers and sellers from Asia. With China emerging as a global power, Chinese Mandarin is becoming more important than ever. Many of Lily’s advertisements have also included Chinese periodicals and Chinese newspapers. With 10 years of experience overseas, this has also really helped Lily in working with international clients that are coming to buy homes and settle in the South Bay and Palos Verdes. Lily’s exclusive network and reputation have helped her become a top producing agent in highend real estate, year after year. Please contact Lily if you are interested in the great community of Palos Verdes in the South Bay in Los Angeles. She will be more than happy to share what she knows with you. EG

For further information, please visit: www.StrandHill.com

LILY LIANG is an expert of the Palos Verdes Peninsula, a prestigious Southern California coastal community, as well as the beach cities along the Los Angeles Coastline. Having been a resident of the Peninsula for 30 years, Lily is very knowledgeable in this area. She is the Executive Vice President of Strand Hill Properties, Christieâ€™s International Real Estate. Lily is fluent in Chinese and English, and she has represented both buyers and sellers from around the world in transactions over $1 Billion. Due to her having worked and lived in Asia and Europe, Lily has a keen appreciation for working with clients from different cultures. She has been recognized as a leading South Bay businesswoman, a top 10 Asian Broker in the US, and has been featured in Forbes, Time, and Los Angeles Magazine as well as other local media. Lilyâ€™s exclusive network and reputation have helped her become a top producing agent in high-end real estate, year after year.

3 Appaloosa, Rolling Hills $7,188,000 | www.modernmasterpieceRollingHills.com 6 Bd | 9 Ba | 9.14 Acre Lot | 6 Car Garage

3292 Via Campesina, Rancho Palos Verdes $2,199,000 | www.3292viacampesina.com 3 Bd | 3 Ba | 3,245 sq.ft lot | 1.05 acres

HNW LIFESTYLE

Seahorse Realty

Discover A New Kind of Blue Be warned—even the most seasoned travellers are caught unprepared for the crystalline waters surrounding the Exumas. Article by

Judy Hurlock BROKER-OWNER, SEAHORSE REALTY

eminiscent of glittering sapphire and cloudless Mediterranean skies, this Bahamian archipelago’s clear blue water will become your new standard to which all future tropical locales are compared. This is Exuma blue. And when you call these special islands home, it becomes the backdrop for the most extraordinary living.

EASY TO REACH, IMPOSSIBLE TO FORGET Even with direct flights to George Town from both Canada and several U.S. cities, once you’ve arrived, you’ll feel worlds away. Lesser known than other Bahamian islands, fewer than 10,000 people live on the 120-mile chain of cays that collectively are called the Exumas. This archipelago is renowned for both its exclusivity and tranquility, where each island charms with its unique personality. Whether you are in the market for Great Exuma’s laid-back luxury or yearn to explore the Exuma Cays’ unnamed beaches and hidden reefs, a visit to these islands risks becoming transformed, as it seems impossible to forget the impression made by such unspoiled natural beauty. ANYTHING BUT ORDINARY Few opportunities exist to own a piece of this enviable lifestyle. However, Aqua Terra, with its sun-bleached stucco and breezy Caribbean style, is one such example of Exuma living at its finest. Over 5,000 square feet of meticulously decorated interior living space, featuring six bedrooms with ensuite bathrooms, seamlessly unfolds into the impressive outdoor entertaining area. Unwind in the 8’ x 8’ spa spilling into the solar-heated saltwater infinity pool. After, enjoy a casual meal al fresco in the cabana with kitchen, powder room, and lounge

JUDY IS YOUR SOURCE TO FINDING THE PERFECT BEACHFRONT VILLA, CONDO OR INESTMENT PROPERTY IN THE EXUMAS, ALONG WITH EVERYTHING YOU NEED TO ENJOY A LUXURIOUS LIFE.

set before a mesmerising expanse of the Exuma blue water. The impressive location, hurricane-proof ICF construction and a strong rental history make Aqua Terra the ultimate island sanctuary for the discriminating investor.

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ENDLESS POSSIBILITIES Leading Seahorse Realty, Judy Hurlock has 19 years of experience leveraging her intimate knowledge of the Exumas into providing exceptional service for clients. For those in search of the ultimate island lifestyle, Judy and her team offer their reputation for professionalism, discretion, and a commitment to excellence. Known for decades as “The First Name in Exuma Real Estate,” Judy is your source to finding the perfect beachfront villa, condo or investment property in the Exumas, along with everything you need to enjoy a luxurious life. For more information regarding Aqua Terra or other real estate opportunities in the Exumas, please contact Judy at Seahorse Realty by calling 242.357.0600. EG

For further information, please visit: www.SeaHorseRealtyExuma.com Email - info@SeaHorseRealtyExuma.com Phone - 242.357.0600

FloridaĂ•s MagniĂžcent Horse Country Set on 954 acres of rolling hills plentiful with old-growth oak trees, this equestrian estate and event venue comprises a townhome development, Clubhouse, Thoroughbred and sport horse training facilities and horse show competition amenities. $18,800,000. Sunshine included.

www.ValhallaEstates.com Tel: (917) 609-6409 Email: Erik@ValhallaEstates.com

HNW LIFESTYLE

Luxembourg Sotheby’s International Realty

Photo: BAHDANOVICH ALENA / Shutterstock.com

The City of Luxembourg The City of Luxembourg itself remains one of the most attractive places for people to live and buy in Luxembourg. Elegant, upmarket neighbourhoods such as Merl, Belair and Limpertsberg have traditionally been the most sought after districts, but now some of the areas that were always considered less desirable, such as the Gare area centred around the main train station and its neighbour across the train tracks Bonnevoie, are smartening up their image, becoming increasingly gentrified and being given a new lease of life thanks to exciting new real estate developments which offer excellent opportunities.

Article by

Philippe Vermast MANAGING PARTNER, LUXEMBOURG SOTHEBY’S INTERNATIONAL REALTY

etween redevelopments and new projects, the Gare district is undergoing a real transformation and the City of Luxembourg is making every effort to increase the attractiveness of the whole area. Definitely up-and-coming, many investors are now seeing the potential of this area since the completion of the modernisation and upgrade of the central station itself, with big banks and hotel chains moving into the area. The neighbourhood now has the highest population density in the city and the number of inhabitants has grown steadily in recent years. It is particularly attractive to newcomers to Luxembourg, thanks to its strategic, central location and its excellent connections to other areas of the city via public transport, which will be further enhanced by the extension of the tram network in 2020. It offers a wide range of amenities – as well as large retailers

and sophisticated shops, there are stylish delicatessens, trendy cafés and designer boutiques - all easily accessible because they are grouped together in a small area. The Bonnevoie district is also undergoing the same regeneration process. Currently very popular for its friendly, community spirit, this is another great place to consider investing. Benefiting from a dynamic and cosmopolitan atmosphere, the district has come on in leaps and bounds in recent years and now offers

AND IF YOU WANT TO MAKE A QUICK GETAWAY AT WEEKENDS, IT IS ALSO PERFECTLY LOCATED TO GIVE EASY ACCESS TO MOTORWAYS AND RAIL NETWORKS.

• Productivity, Strategy, Profitability

its inhabitants a pleasant multicultural environment and a good quality of life. Both close to nature and to the city centre, it is particularly popular with families who appreciate its facilities, convenience and ”village in the city” feel. This is where you can find lovely old single-family homes, full of charm and character. It offers a multitude of local shops, alternative one-off restaurants and is home to many cultural and leisure centres, such as the Carré Rotondes, a bustling social hub with a full year-round calendar of events and workshops in music, performing arts and visual arts. And if you want to make a quick getaway at weekends, it is also perfectly located to give easy access to motorways and rail networks. New housing projects are emerging and a real effort is being made to integrate them harmoniously with the existing buildings which shape the image of the neighbourhood. Every aspect of life is being considered in the design of these new projects - from wellbeing and health to environmental impact to the latest technology – to make it the perfect setting for a comfortable lifestyle and a broad range of daily activities. EG

For further information, please visit: www.sothebysrealty.lu

LIVE INSPIRED As experts in real estate, we are passionately committed to satisfying our customersâ€™ needs on a daily basis. Our global marketing strategy combines the know-how of our team with a powerful worldwide network. Thanks to our presence in the most sought-after locations, our referral system allows us to connect buyers and sellers based in different countries and offer them a selection of the finest properties wherever they choose.

70, avenue Guillaume |

sothebysrealty.lu

L-1650 Luxembourg

T. 20 19 19

HNW LIFESTYLE

Diplomat International Realty

Welcome to South Florida’s Paradise! I am excited to offer you the latest in South Florida real estate news, tips, and market trends. As Founder of DIPLOMAT INTERNATIONAL REALTY with over 26 years of experience, I have observed and experienced how luxury real estate has evolved throughout the years. Article by

Bozena J. Kaluza PRESIDENT, DIPLOMAT INTERNATIONAL REALTY

y passion for helping people has inspired me to create a platform where I can share my insight with others, in an effort to help them better navigate the complexities of buying or renting luxury properties. Having lived in many different countries around the world I speak 7 languages, which is a valuable factor in inter-personal communication. Having sold an impressive array of multi-million dollar high-end homes and condos, I understand all facets of my client’s needs and desires when it comes to finding your dream home. I am originally from Poland where I graduated from Hotel and Hospitality Management School in Wilsa. Soon after I left Poland and ultimately my journey to Miami took me through several European countries i.e : Vienna, Austria, Germany (undergraduate studies at the Ludwig Maximillian University in Munich), England (English studies at South Thames College in London), Brazil (Portuguese studies at Universidade Federal in Rio de Janeiro) and Rome, Italy. I began my luxury real estate career 26 years ago when I moved from Brazil to Miami in 1990 as the manager of a real estate portfolio for a Brazilian entity. I held positions as Director of sales for some of the most recognised and prominent real estate development firms, where I was responsible for generating sales in excess of $ 1 Billion dollars. In 1998 I launched my own boutique brokerage firm and continue to offer my clients an impressive combination of vision and sophistication when acquiring a property and marketing and promotional expertise when a client chooses to sell. My reputation has garnered me numerous international and influential clients including many Diplomats. While I feature properties in the most sought after locations such as Miami Beach, Bal Harbour, Sunny Isles Beach, Golden Beach, Ft. Lauderdale,

I BEGAN MY LUXURY REAL ESTATE CAREER 26 YEARS AGO WHEN I MOVED FROM BRAZIL TO MIAMI IN 1990 AS THE MANAGER OF A REAL ESTATE PORTFOLIO FOR A BRAZILIAN ENTITY.

Boca Raton and Hollywood, I am especially proud to call myself the industry leader in all things related to the DIPLOMAT OCEANFRONT RESIDENCES in Hollywood, Florida. These luxurious properties are packed with exceptional amenities, and share the special privileges of the connected Hilton by Curio Diplomat Resort & Spa! If you enjoy direct beach access, fine dining at your fingertips, therapeutic spa

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treatments, and luxury at every turn, then I would love to help you find your dream Diplomat Condo! With soaring 9 - 12 foot (3-4 meters) ceilings and floor-to-ceiling windows, these stunning condos allow an abundance of natural light to transform the space into a bright, airy sanctuary of peace and tranquility. Ranging from 2,300-5,000 Sq.Ft., (230 m2 - 500 m2) these open spacious boutique Residences contain sophisticated modern touches like recessed lighting, marble floors, and custom Italian cabinetry. I am thrilled to be able to provide exclusive insider information on VIP events and activities afforded to Diplomat residents only. My reputation for passion, discretion, tenaciousness, and resourcefulness combined with the highest level of service, has made every transaction successful. Please, see my ad on the back cover of this issue and feel free to contact me anytime. EG

Bozena J. Kaluza, Diplomat International Realty 3535 S. Ocean Drive, Hollywood, Florida, 33019, USA. Cell: 305.801.8363, E-mail: bozena@diplomatrlty.com, Web: www.bozenakaluza.com

Peace of mind. Piece of paradise. We’ve got you covered. For over 35 years, Global Bank of Commerce, Antigua’s oldest institution providing wholesale and international financial services, has offered its clients the perfect balance of world class banking, security and convenience. Antigua has been an independent and sovereign jurisdiction since 1981, and GBC is well positioned to manage the portfolios of the more selective investor, who may also qualify to obtain second citizenship via a regulated process. Contact us and learn how we can support your financial goals, today and tomorrow.

Wholesale Banking Private Banking

Global Commerce Centre Old Parham Road P.O. Box W1803 St. John’s, Antigua, West Indies

Wealth Management

Tel: (268) 480-2240 Fax: (268) 462-1831 email: customer.service@gbc.ag www.globalbankofcommerce.com

Bespoke Payment Solutions

Portfolio Services Citizenship Services

HNW LIFESTYLE

The Audrey Ross Team

Unparalleled Amenities for the Luxury Yacht Owner Overlooking the sparkling waters of Biscayne Bay and located in Gables Estates, one of Miami’s most exclusive, gated communities, this exquisite home is the epitome of excellent taste for those who want to enjoy the very best of waterfront living. Article by

Audrey Ross

VICE PRESIDENT, COMPASS REAL ESTATE

ituated on and acre +/- lot amid rolling, manicured lawns, with 180 +/- feet of prime waterfront, this lavish setting has everything one could desire and more: dockage for a 100+ ft boat, a 30 ton boat lift, outdoor dining with full summer kitchen, cabana bath, heated infinity pool with submerged Jacuzzi to accommodate 10 or more persons and covered terraces that create extensive outdoor living spaces. An oversized drive court provides access to a three car garage and guest parking.

CUSTOMISED LUXURY The round arched main entry to the arcaded interior courtyard, draws one in to experience life amid light-filled, large, high-ceilinged rooms that are arranged to provide private family spaces as well as large scale entertaining areas. A gracious living room, billiard room, family room with full wet bar, spacious, gourmet kitchen with top of the line appliances as well as an equally appointed “catering” kitchen with walk-in pantry, silver/china pantry, formal and informal dining rooms, and wine cellar, accompany his and her offices throughout the main floor. Ceiling fixtures commissioned in Italy cast the house in warm glow, creating a home that is inviting for family and guests. Crestron lighting and audio visual systems remotely manage the entire house and the back-up generator will supply power to the entire house during a power outage. The grand staircase or the elevator takes you to the second floor which features five bedrooms, seven bathrooms and a bright and spacious gym. The inviting master suite is accessed through its own foyer and includes a sitting room, his and her custom

THE GRAND STAIRCASE OR THE ELEVATOR TAKES YOU TO THE SECOND FLOOR WHICH FEATURES FIVE BEDROOMS, SEVEN BATHROOMS AND A BRIGHT AND SPACIOUS GYM...

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built closets, a private sun balcony immediately adjacent to the Waterworks appointed bathrooms with two separate water closets. EXUDING CHARM AND WARMTH From almost every room in the house, one can enjoy the delightful water views of Gables Estates’ widest and largest lagoon, immediately accessible to Biscayne Bay, unencumbered by any bridge. This Palladian inspired estate, created to capitalise its unique waterfront location exudes charm and warmth of a day gone by, yet offers every comfort of contemporary life. EG

For more information please contact Audrey Ross, Vice President of Compass Web miamirealestate.com E-mail aross@miamirealestate.com Tel (305)206-4003

An Art Lover’s Dream Home

Coral Gables, Florida

500 Arvida Parkway $26,500,000 5 Bed 7 Bath 3 Half Bath 1,229 sq m, 4,047 sq m +/- waterfront lot Private Dock for 100’+ Boat

Expansive Art Walls

Elevator

Custom Art Lighting

Full house generator

Multi-zone art climate control

Custom art solar shades

Audrey Ross 305.206.4003 aross@miamirealestate.com

Not intended to solicit currently listed property. © Compass Florida, LLC. Equal Housing Opportunity. All information furnished regarding property for sale or rent or regarding ﬁnancing is from sources deemed reliable, but Compass makes no warranty or representation as to the accuracy thereof. All property information is presented subject to errors, omissions, price changes, changed property conditions, and withdrawal of the property from the market, without notice.

HNW LIFESTYLE

Lynne B. Wilson and Associates

From Cottages to Castles Over the years Ms. Wilson has sold thousands of properties and maintains a unique, entrepreneurial organization. She is closely connected with the theatrical community having represented many well known celebrities such as Priscilla Presley, Christopher McDonald, Patrick Swayze, Roseanne Barr, Dick Clark and Frankie Avalon, notwithstanding many Presidents and CEO’s over the years. Article by

Lynne B. Wilson, PRESIDENT, LYNNE B. WILSON AND ASSOCIATES

he caters to the “Luxury” market in Lake Arrowhead, California from Charming Cabins to Waterfront Estates. She began her career with the prestigious Realty firm of Bob Crane and Associates on the Sunset Strip. She opened her own company in 1980 on Sunset Blvd while serving as Vice President of Celebrity Properties in Beverly Hills, California and has been serving the Lake Arrowhead Mountain Communities since 1991.

A veteran Real Estate Broker and recipient of many Realtor Achievement Awards, Ms. Wilson successfully balances her career with selling Real Estate in Lake Arrowhead and Lake Gregory, California, while maintaining significant status in the Los Angeles/Beverly Hills Board of Realtors. She was named Realtor of the Year in 2012, and currently serves on the Board of Directors in Lake Arrowhead with Emeritus Status. Lake Arrowhead Mountain Resort, in the San Bernardino Mountains is a beautiful and sophisticated community situated around Lake Arrowhead which is a private Lake that was established in 1920. Lake Arrowhead offers good fishing and boating for residents, a delightful upscale Village for shopping and dining, charming

• Productivity, Strategy, Profitability

Restaurants, clean air, 4 distinct Seasons and it is only 30 minutes from Big Bear and the local ski slopes. Lake Arrowhead is only 1 1/2 hour drive from Los Angeles, Palm Springs and Laguna Beach! Lynne B. Wilson and Associates currently has on the market 7 Lakefront Estates and 14 Private Grandscale Estates. Her company theme is Cottages to Castles and her company offers homes from $200,000-$12,000,000. Visit our website at www.CottagestoCastles. net or on YouTube at http://lynnebwilson.com/ watch/ EG

Fur further information, please contact: www.CottagestoCastles.net office: 909-337-2080 ext. 2# Cell: 951-741-7117

HNW LIFESTYLE

Country Club Properties

Bowery Road One of the finest estates available in Highlands! Highrocks features gated access to a large private 3.6 acre lot with stunning views of Whiteside Mountain, and the valley vistas beyond. The house is ultra quality, and features multiple stone fireplaces, water features, a custom dream kitchen to die for. he main level has a living room, dining area, master bedroom, and a Carolina room with fireplace that is accessed off of the kitchen. With antique wood floors, updated baths, the lower level has guest quarters with a media room and wine cellar. There is a large 2 car carport with guest efficiency above. A network of trails explore the landscaped grounds. Highrocks is an Eden in Highlands and will not disappoint even the highest of expectations. Offered at $4,499,000. mls #83614

HIGHLANDS, NORTH CAROLINA Highlands, NC is a special place located in the High Mountains of the Smoky Mountain Chain of the Southern Appalachians. So it’s not surprising to learn that Highlands owes its very existence to an unlikely chain of events. Around 1875, two Kansas developers, Samuel Kelsey and Clinton Hutchinson, who apparently knew very little about mountains, looked at a map of the United States and drew a big ”X” connecting New York and New Orleans

and Chicago and Savannah. Where the lines crossed, they surmised, would be the next natural transportation hub of the East. (They were not far wrong, but that role fell to Atlanta, just 120 miles to the South.) You don’t pass through Highlands to go anywhere. You have to come here on purpose.

HIKING, FISHING, AND GOLF ARE MAINSTAYS IN THIS AREA. THERE IS A WORLD CLASS CHAMBER MUSIC FESTIVAL, MOTORING FESTIVAL, AND FOOD AND WINE FESTIVAL...

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The average elevation of the city limits is 4118 feet which affords cool summers and mild winters. Highlands is surrounded by United States Forest Service Lands, which promotes unspoiled forests and clean fresh air. Highlands is truly unique and a getaway to be treasured. Get out of town less than a mile and you find you are surrounded by parks in the Nantahala Forest filled with waterfalls and flowering laurel and rhododendron of every description. The village has wonderful shops, restaurants with world class food and wine, plays and music. Hiking, fishing, and golf are mainstays in this area. There is a world class Chamber music festival, motoring festival, and food and wine festival every summer. EXPERIENCED WITH LOCAL KNOWLEDGE Country Club Properties was founded by Terry Potts and is a small Hometown agency established in 1990 in Highlands with 4 offices in this area to serve you. Terry has the experience and the local knowledge to make sure you get the best price and the best service. Whether you are looking for property on which to build your dream home, just a small cabin in the woods, a summer home, a luxurious year-round residence, or commercial property, we handle it all, including 6 Private member owned clubs in the greater Highlands area. Contact W. Terry Potts at 828-526-2520 Office, or mobile 828-421-3417 for exceptional service. EG

For further information, please visit: www.ccphighlandsnc.com PO box 1708 Highlands, NC 28741

“Institutional Broker-Dealer Owned and Operated by Disabled U.S. Military Veterans”

AmeriVet Securities, Inc. AmeriVet Securities, Inc., provides institutional financial services to a broad spectrum of institutional corporate and public clients. As part of our showcase of a selection of this year’s Financial Elite Award winners.

• Service • Expertise • Leadership

Contact Details: Company: AmeriVet Securities, Inc. Name: Elton Johnson, Jr. Address: 1155 Avenue of the Americas, 14th Floor, New York, New York 10036 Telephone Number: (646) 809-6940 Web Address: http://amerivetsecurities.com

Embrace Your Dreams... Own a piece of Paradise today.

Specializing in Luxury Oceanfront Properties I speak English, Ja mówię po Polsku, Ich spreche Deutsch, Eu falo Português, Hablo Español

Broker / Owner

Cell: 305.801.8363 bozena@diplomatrlty.com www.bozenakaluza.com DIPLOMAT INTERNATIONAL REALTY 3535 South Ocean Drive, Suite 901, Hollywood, FL 33019 Delivering outstanding service and results! from MIAMI TO PALM BEACH, FLORIDA 30 YEARS IN BUSINESS and MAKING DREAMS COME TRUE!

DIPLOMAT OCEANFRONT RESIDENCES PENTHOUSE #2901 One of a kind, true Penthouse - Beachfront - 6 bedrooms, 8.5 bathrooms - 8,000 Sq.Ft (743 m2) Offered at: $6,500,000.00 - A $1 Million Dollar reduction!