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Dear Readers The year starts with good news! We’ve survived the apocalypse – what’s next? Over the last couple of weeks I’ve been bombarded with motivational phrases and images but whilst I usually perceive those as annoying I kind of got into it this time around and embraced some of them. After all why not? We can all use a bit of motivation, regardless where it comes from! According to Chinese horoscope, 2013 is the year of the snake and according to their beliefs, this year anything is possible. Obviously that comes with words of caution like all horoscopes but I have to say that I like the idea of “anything is possible”. It’s an empowering statement that we hear way too seldom. In that spirit I say, lets all go out and make it happen! In my very own opinion, the global economy is looking good and despite the whole suspense about all those “too big to fail” issues like the Greek debt crisis or the U.S. fiscal cliff things always come around in the end. I think it is important to live and work with a wider perspective rather than only focusing on today because living in the moment and not looking beyond the edge of your desk amplifies situations beyond reason and that is never very productive. Keep calm and keep going!




Our editor, Patrick Gruhn, being interviewed about his business ventures

As for The Elevator and our 20th edition, we’ve ventured to make it our biggest issue to date and I think the result is beautiful, interesting and edgy. From our humble beginnings as a digital newsletter reaching about 50 readers in the beginning of 2006 we now reach thousands and thousands of loyal readers all around the world and we’re thankful for your interest, feedback and support. We’re now also available on the Windows 8 Store, reaching out to a whole new audience of literally hundreds of millions users and we won't stop there. Our website has a new dynamic format as well, adding news and articles on a daily basis so be sure to check in on whenever you have time. We’re also tweeting and facebooking – please follow us if you like. I hope you enjoy the issue. As always, please don’t hesitate to contact me directly with ideas, thoughts and questions – I always enjoy interacting with our readers. Best wishes for a successful and healthy 2013!

G. Patrick Gruhn Editor, The Elevator Magazine



The man has just been given a second term as the leader of the free world. We look back at his previous four year tenure, and consider what might be in store between now and the next American election.





023 PSY



Korean superstar PSY has taken the world by storm. His unique style of pop music and entertaining music videos have captured the world's attention, but how has this viral success been transformed into a business empire?

Blackstone is one of the greatest success stories of the modern day, we have a look at the man behind it and understand how Stephen A Schwarzman was able to build this financial behemoth.

From humble beginnings, Xi Jinping has risen to dizzy heights, with power over the world's largest economies. How has Jinping contributed towards making China the economic superpower it is today?




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PAGE 77 73



MAGAZINE Companies 060 LEGO


We look at the sometime troubled history of this toy making legend.

It's been a tough time for BlackBerry, with their world crumbling, can their latest operating system save everything?


After the death of Steve Jobs, we investigate how new CEO Tim Cook has moved Apple forwards. 074 PAGANI

070 IKEA

The company's furniture is omnipotent, could Ikea be one of the most successful private companies?

How has Horicio Pagani created this Ferrari rival?



private equity funds

forex funds

private banks

hedge funds

family offices


The entire staff from The Elevator magazine took a long look back at the previous 12 months and chose some of the most promising and inspirational companies from all over the world. See the results for yourself. ELEVATOR MAGAZINE | 7

The new BMW 6 Series Gran Coupé

The new BMW 6 Series Gran Coupé


There are moments which last for all eternity. Such as your first glimpse of the new BMW 6 Series Gran Coupé. The first four-door coupé in BMW’s history is aimed at people who value the special things in life: the perfect combination of revolutionary design, uncompromising sportiness and exclusive elegance. It impresses with the finest materials in the interior and a powerful BMW TwinPower Turbo V8 engine, which is strikingly efficient. There are moments which last for all eternity. Such as your first glimpse of the new BMW 6 Series Gran Coupé. For further information please contact Emil Frey SA Crissier or visit The first four-door coupé in BMW’s history is aimed at people who value the special things in life: the perfect combination of revolutionary design, uncompromising sportiness and exclusive elegance. It impresses with the finest materials in the interior and a powerful BMW TwinPower Turbo V8 engine, which is strikingly efficient. For further information please contact Emil Frey SA Crissier or visit


Sheer Driving Pleasure

Sheer Driving Pleasure




It seems like everyone was misbehaving last year. We name and shame some of 2012's worst behaved banks. 034 CRUNCH TIME

The USA nearly hit their fiscal cliff this year, what impact did it have?


Philosophical pieces


Our editor, Patrick Gruhn takes a look at the human condition and what's wrong with us today. ELEVATOR MAGAZINE | 9






Alternative Investments have often outperformed the traditional markets.

The financial landscape is rapidly changing! Bankers and clients are feeling the pinch with the rope of regulation tightening around everyone's necks.

Lesti il illaborion eum ipsus porro ipis resserit laut et, ut quatestia Pudictam.


Which horse does the smart money back in 2013? 104 COMMODITIES

When church bells are stolen for scrap metal, you know commodities are in demand.



Lesti il illaborion eum ipsus porro ipis resserit laut et, ut quatestia Pudictam.

The stock markets of the world have been overly volatile for several years and investors have their guard up.

Bright Ideas




212 WINE

We look at the brightest robots of this year

The ultimate timepieces

The best tasting investments



Top destinations for 2013

For home, the office, etc


172 JETS

Serenity on the seas

Travel in the ultimate style


Keep your conversations safe with Redact messenger 130 FREEMIUM

How is this new business model helping companies reach new heights? ELEVATOR MAGAZINE | 11

PICTURES OF THE YEAR They say a picture tells a thousand words, so what better way of looking back over the last twelve months? The editorial team at the Elevator have chosen one event each month that had the most profound effect on us and our readers.


Italian cruise-liner Costa Concordia shipwrecks off the coast of Isola because of an over-eager captain who thinks he's the king of the world. The captain, Francesco Schettino, said that he was helping passengers into the lifeboats when he "tripped" and before he knew it he was sitting in one of them.


Pictures of the year | Q1 2012



Eurozone unemployment hits historical high of 10.7%.

Vladimir Putin wins Russian presidential election amid allegations of voter fraud.




The unfinished One World Trade Center overtakes the Empire State building to become the tallest building in New York.


Pictures of the year | Q2 2012



Edvard Munch's famous painting 'The Scream' sells at auction for $119,922,500.

Japan's stock market plummets to record lows with the S&P/TOPIX 150 reaching its lowest level since 1983.




Antonio Esfandiari wins a record $18.3 million in poker after winning the 2012 World Series of Poker $1,000,000 Buy-In.


In a very public lynching the USADA strips Lance Armstrong of his seven Tour de France titles and bans him from sport for life.


Pictures of the year | Q3 2012


Hurricane Sandy makes landfall in New Jersey resulting in 110 deaths and $50 billion in damage and forces the New York stock exchange to close.




Barack Obama is re-elected and begins work for his second term in office.


Walt Disney purchases Lucasfilm Ltd and its rights for Star Wars and Indiana Jones for $4.05 billion.


Pictures of the year | Q4 2012


HSBC bank settles with US authorities to pay $1.9 billion for drug cartel money laundering.




Pictures of the year | E.L.E. 2012

21 December 2012 PICTURES OF THE YEAR

The Mayans were right, who'd have thought it? The world ended at the 13th Baktun. Arrrrrrgh. Just kidding.


PEOPLE OF THE YEAR To celebrate 2013, the Elevator staff and editors have compiled a list of some of the most influential and celebrate people from last year. Anyone we missed? Let us know on Twitter @ElevatorMag


Richter is a German born visual artist who simultaneously produced abstract and photorealistic painted works, as well as photographs and glass pieces. In 2012, Richter became the top-selling living artist when in October, Richter's Abstraktes Bild set an auction record price for a painting by a living artist at ÂŁ21m ($34m). 22 | ELEVATOR MAGAZINE

People of the year | 2013 ANNUAL


Sarah Attar, the first Saudi Arabian athlete at the London Olympics, said "just being allowed to compete could be inspiring for women in Saudi Arabia". The 19-year-old athlete finished last in the 800m wearing head-to-toe clothing. Spectators gave a standing ovation as she crossed the line.




Chinese physicist Yuan Yin and his team have managed to teleport photons through 100 kilometres of free space, potentially opening the way for satellite-based quantum communications. This ability could have monumental impact on secure communications in the future. 24 | ELEVATOR MAGAZINE

The world's first totally secure instant messenger application Using encryption, ciphers and peer to peer messaging, Redact sends heavily encrypted messages from one phone to another without passing through any central servers. Messages you have sent or received can be redacted from both handsets at the touch of a button with no method of recovery.



Jiroemon Kimura, born 19 April 1897 is a Japanese supercentenarian who, at the age of 115 years is the world's oldest living person since the death of Dina Manfredini on 17 December 2012. Kimura lives in Kyotango and has 14 grandchildren, 25 greatgrandchildren and 13 greatgreat-grandchildren.


"To us, art is more than a passion. It is the appreciation for the creation of the extraordinary combined with the knowledge to allow our clients to benefit from such talent."





Schumacher, the seventime World Champion is widely regarded as one of the greatest F1 drivers of all time. He holds many of Formula One's driver records, including most championships, race victories, fastest laps, pole positions, points scored and most races won in a single season (13 in 2004). He retired in 2012. 28 | ELEVATOR MAGAZINE

People of the year | 2013 ANNUAL


Magnus Carlsen was born November 30, 1990, in Tønsberg, Norway. He learnt to play chess from his father at the age of 5. The game very soon became his big passion. Magnus first goal was to beat his sister, then his father and it obviously didn’t stop there. Magnus became an International Grandmaster at the age of 13, the youngest at the time. ELEVATOR MAGAZINE | 29

BUSINESS NEWS 2012-13 In this year's annual we've brought you the most importand and pivotal moments from last year, and news on where they are now. It was a year of transition and great change - here are some of the year's key events. HSBC SCANDALOUS BEHAVIOUR FROM WESTERN BANKS

From Libor-fixing to money-laundering and collusion, 2012 was the year that scandals rocked the banking world. In February, a deal representing the largest industry settlement with the US government since the 1998 agreement with tobacco companies, saw seventeen banks handing over $25bn to settle allegations they’d used falsified documents to evict homeowners during the US housing market crash. Santander admitted failures to clarify the levels of consumer protection in their FSCS scheme and was slapped with penalties of £1.5m. In May, revelations that JPMorgan Chase had lost $3 billion in bad trades by an employee nicknamed the 'London Whale' hit headlines. And the fines continued. Standard Chartered admitted to breaking US sanctions on Iran, Burma, Libya and

Sudan - hiding 60,000 transactions with Iran worth $250bn over nearly a decade, whilst JPMorgan lost $2bn through risky trading. Then came Libor, an industry-wide scandal over the illegal manipulation of a major interest rate. Barclays and UBS were amongst the banks caught fixing the London Interbank Offered Rate between 2005-2009 coughing up $451m (£290m) and $1.5bn (£940m) respectively. Investigations and resignations followed on both sides of the Atlantic. UBS's misfortune continued: just recovering from a scandal that led to the conviction of rogue trader

Kweku Adebole who lost the bank $2bn (£1.2bn) in speculative trading, they then faced a $6.4bn lawsuit by US governmentsponsored mortgage lenders Freddie Mac and Fannie Mae claiming that that UBS was involved in mis-selling mortgage debt to other investors. In a seemingly never ending succession of misdeeds HSBC paid a recordbreaking $1.9bn penalty in December for money laundering activities tied to drug cartels in Mexico and terror-linked groups in Saudi Arabia - the largest ever paid in such a case.


The economic crisis in the eurozone wracked Europe in 2012 and the perilous state of the continent’s fiscal health was a key issue for world markets. Italy, Spain, Greece and Portugal all faced immediate danger of a possible default, necessitating a series of bailouts by the European Union and European Central Bank. Even though the debt crisis didn’t magically disappear, panic in the markets did subside. 30 | ELEVATOR MAGAZINE

Business news | 2012-2013


Newly ECB leader Mario Draghi played his part in restoring relative calm to Europe’s financial markets and the EU put major rescue mechanisms in place, seeing through the ECB's commitment to preserving the eurozone. Worldwide markets rallied and the second half of 2012 saw more

financial stability than the previous two years. Needless to say however, if the financial and monetary integration in Europe continues to outpace the deepening of political and fiscal ties, then unhappy German taxpayers could still find themselves footing the bill.

Strong growth among developing countries had been a bright spot in an otherwise tepid world recovery. China responded to the global economic crisis with an extraordinary increase in investment, an increase that boosted demand for natural resources like iron ore and copper which in turn created additional investment in countries like Brazil, Peru and Australia. But that changed as India battled inflation, economic activity in developed countries contracted, and emerging markets like China faced economic slowdown. A further rise in global energy prices because of increased geopolitical tensions continued to threaten global growth. In July 2012, economic fears were confirmed when the International Monetary Fund trimmed its forecasts. ELEVATOR MAGAZINE | 31


Long assailed for running a huge trade surplus with the US, China's lopsided economy gave rise to concern in 2012, as the country’s vast trade surpluses and weakening import growth raised worldwide anxiety about the strength of domestic demand and extreme imbalances in the Chinese economy that called for urgent reform. US criticism of China’s trade practices featured prominently during the presidential campaign with Beijing labeled a currency manipulator for keeping its renminbi undervalued (the fact it has on average a higher foreign content in its gross exports compared to other countries because of its position at the end of the value chain goes in China’s position at the end of the value chain was China's main defence). Whilst its communist leadership underwent its once-in-a-decade refresh, the new 59-year-old leader Xi Jinping indicated no discernible shifts in priorities. 32 | ELEVATOR MAGAZINE



swiss clubsport



Freak weather and catastrophic natural disasters dominated the news headlines throughout 2012. With global weather becoming more extreme, heat waves and flooding more frequent, experts called for decisive action. In September, Oxfam warned that food price spikes caused by extreme weather events like the US drought will become the norm over the next 20 years leading to millions of deaths from malnutrition among the world’s poorest. As Hurricane Sandy wreaked havoc on northeast USA in October and typhoon Bopha slammed the Philippines in December, Ministers from nearly 200 countries began talks in Doha. 34 | ELEVATOR MAGAZINE

At the close of 2012, the US Government faced crunch time. Entangled in political gridlock, the world anxiously waited whilst politicians took negotiations down to the wire. One thing was for sure, a deal had to be reached if America was to avert the approaching perfect storm of legislative changes that had been building since the Bush administration. Measures that were necessary to avoid impending austerity measures that would doubtless have plunged the US economy back into recession. The terms of the Budget Control Act of 2011 that were initially scheduled to take effect at midnight on 31 December ,signaled the end of the 2001-2003 tax cuts, along with the dreaded shift in the alternative minimum tax that would take a larger bite, and the added

inclusion of extra taxes under Obama’s new healthcare law - at the same time as automatic spending cuts that were part of the 2011 debt ceiling deal were set to begin. But two hours after going over the fiscal cliff at midnight January 1, the Senate voted 89-8, and the House of Representatives voted 257-167, to pass the new American Taxpayer Relief Act of 2012 - and the fiscal bullet that they had been pointing at their own heads for the last four years, was dodged.

Business news | 2012-2013


Nasdaq’s showroom in Times Square saw crowds gather to watch Mr. Zuckerberg ring in the opening bell on Facebook’s first trade, and its May 18 debut turned out to be a wild ride. Beset by technical glitches and exasperating delays, right up until the closing moments Facebook's underwriters wrestled to keep stock from slipping below its IPO of $38 a share. Amidst fears that the company would find monetizing the habits and information of its one billion users challenging, Facebook


In a year that Apple hysteria rose to record levels, the California tech giant became the world’s most valuable company in August. While Tim Cook’s leadership style was put under the microscope, 2012 saw a series of new releases and updates of the iPhone and iPad, and hype and expectations piled high. But even Apple wasn’t immune to intensifying competition in the mobile device market. Shares reached an all-time peak in September then the company’s grip on the market steadily tumbled, with the knock-on effect

share prices plummeted, trading below $20 in August. But Zuckerberg stayed calm, commenting the stock’s performance may be ‘painful’ for investors to watch, but that plans and investments would pay off in the long term. True to his word, shares made a recovery in the third quarter rising 32% to $1.26 billion and have remained healthier amid a push to boost revenue from advertising, sponsored stories, and the FBX Facebook Exchange.

cascading through financial markets. Analysts were left torn over how Apple’s stocks would fare in 2013. The Android operating system created by Google and used by Samsung and HTC is growing much faster than Apple's iOS. Apple must up it’s pace of trendsetting innovation if it is to convince investors it’s still a formidable competitor. But then the big event is always the next product. ELEVATOR MAGAZINE | 35


OBAMA The man has just been given a second term as the leader of the free world. We look back at his previous four year tenure, and consider what might be in store between now and the next American election. Words ROBERT HENDERSON

ON NOVEMBER 4, 2008, BARACK HUSSEIN Obama II became the 44th President of the United States. Sweeping into power on a wave of public euphoria, he was in receipt of more total votes than any Presidential candidate in history (totalling well over 69 million) and was the embodiment of energy and hope at a time of global economic despair. Officials estimated that 1.8 million people flooded onto the National Mall parade route for his swearing-in ceremony, making it the largest public gathering in Washington’s history. But there was no deterring US citizens who had come to bask in his glorious assurances that ‘the country would find its way through any crisis’ - and to celebrate the symbolic national achievement that befitted their first ever African-American President. The son of a white Kansan and a black Kenyan, Obama was born August 4, 1961 in Honolulu, Hawaii, into relatively modest beginnings - a fact that has been used to his advantage in his campaigns since. His parents separated when he was two years old, after which he was raised by his mother and grandparents. Following four years in Jakarta, Indonesia with his mother and stepfather, Barack returned to Honolulu at the age of ten to live with his grandparents. At the time he was affectionately 36 | ELEVATOR MAGAZINE

nicknamed ‘Barry’, and he sported a fledgling afro hairdo. He might have changed his hair but he still has the same enigmatic smile. It was clear from the outset that Obama was uncommonly talented. At eighteen, after leaving high school, he moved to Los Angeles to study at Occidental College for two years before going on to graduate from Columbia University and Harvard Law School - where he volunteered for and was elected first black president of the Harvard Law Review, a position that saw him in charge of a team of 80 student editors, proving even then he had a knack of eliciting trust and building support from those around him. It was also during law school that he met his future wife, Michelle, whilst working as associates at the law firms of Sidley & Austin. With consistently strong grades and a hunger for success, he was already exhibiting signs of the famously cool temperament and personal likability that have continued to be significant assets in his career since. After graduating he stayed and settled in Chicago, marrying his wife Michelle in 1992 and living with her in Hyde Park. Barack taught constitutional law at the University of Chicago Law School for twelve years (as Lecturer for four years and as Senior Lecturer for eight) whilst working full time as a lawyer at Davis, Miner, Barnhill & Galland. Their first daughter, Malia Ann, was born in 1998, followed by Natasha ('Sasha'), their second daughter in 2001. During this time Obama was prolific in his community activities. He directed ‘Project Vote’, an Illinois-based drive that helped Carol Moseley



Braun become the first black woman ever elected to the Senate – a .. that would bring him into contact with the wealthy, liberal elite of Chicago, as well as the city's most influential black political leaders. He was a founding member of the board of directors of Public Allies in 1992; served on the board of directors of both the Woods Fund of Chicago and The Joyce Foundation from 1994– 2002 - both of which gave out tens of millions of dollars to various local organizations and helped Obama cultivate a network of community activists that would later support his political career. He was founding president and chairman of the Chicago Annenberg Challenge board of directors from 1995–1999 and served on the board of the Chicago Lawyers' Committee for Civil Rights Under Law, the Center for Neighborhood Technology, and the Lugenia Burns Hope Center. In 1995 he announced his candidacy for a seat in the Illinois state

Senate, where he served three terms. It was 2007 when Barack began his presidential campaign. Obama’s first presidential term has certainly been an historic one. His Inauguration on January 20, 2009 was undoubtedly a function of the public unhappiness with the unpopular Republican Administration - which under Bush’s watch saw the US facing a downward financial spiral brought on by predatory lending, tax cuts and an economic policy geared to the priorities of an elite wealthy - and soon to be named “the one ELEVATOR MAGAZINE | 37

per cent�. He had his work cut out for him from the beginning. His election promises centred around the withdrawal of American troops from Iraq, increased energy independence, decreased influence of lobbyists, and promotion of universal health care - all whilst in the midst of the most serious financial crisis the world had seen since the 1933 Great Depression. And so he set to work over the next four years bailing out banks and expanding the deficit, despite his dream of unity colliding with the reality of obstructionism from the Republicans in Congress (his 2011 bill, the American Jobs Act, went nowhere despite his best efforts - consulting firm Macroeconomic Advisers has estimated the act would have added 1.3 million jobs by the end of 2012). But his accomplishments have not gone unnoticed. To his credit, Obama has lived up to 38 | ELEVATOR MAGAZINE


He set to work over the next four years bailing out banks and expanding the deficit

the majority of his promises. He got his health plan passed, he ended US military involvement in the Iraq war, was intricately involved in the removal of Osama bin Laden, and despite his low poll numbers leading into the heat of the campaign, still had a personal likability that never faded. A year into his first term he credited his $787 billion stimulus package (The American Recovery and Reinvestment Act of 2009), which he rammed through Congress in his first days of office, in playing a huge role in pulling the country back from the brink and helping to reset the US economy. His 2012 re-election was a much more nerveracking ride than 2008 - amidst high unemployment and a fractured political landscape, and battling with the fantastical expectations that had been attached to him from the offset, his promises that came in emotionally engaging and inspirational speeches



Obama became the first Democratic president since Franklin D. Roosevelt to twice win the majority of the popular vote


had mixed reactions from a slightly lacklustre audience. His race with Mitt Romney was declared too close to call by many media channels in the run up to election day. But Obama’s rhetorical techniques and his memorable speeches - formal, yet cool, and hyperrational - cemented his Presidential status for the second time. In fact Obama became the first Democratic president since Franklin D. Roosevelt to twice win the majority of the popular vote. In his address to supporters and volunteers at Chicago's McCormick Place he said: "Tonight you voted for action, not politics as usual. You elected us to focus on your jobs, not ours. And in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties”. Now, presumably at his Presidency’s halfway point, Obama’s ambitions to date have been to “steer this

ship of state so that we once again had an economy that worked for everybody; that we had laid the foundation for broad-based prosperity.” TIME magazine summed it up beautifully when they declared Obama their Person of the Year 2012. Explaining their choice, Time’s Editor Rick Stengel wrote: ”We are in the midst of historic cultural and demographic changes, and Barack Obama is both the symbol and in some ways the architect of this new America. In 2012, he found and forged a new majority, turned weakness into opportunity and sought, amid great adversity, to create a more perfect union.”




Korean superstar PSY has taken the world by storm. His unique style of pop music and entertaining music videos have captured the world's attention, but how has this viral success been transformed into a business empire? Words ROBERT HENDERSON

KOREAN SINGER, SONGWRITER AND record producer PSY has taken YouTube - and the world - by storm. The music video for his infuriatingly catchy hit, “Gangnam Style”, was released in July 2012, and just five months later had exceeded a record-shattering 1 billion views. Over those first few months, according to Google, his video was watched seven to ten million times a day - with 500,000 views on its first day alone. So just how did a crotch-thrusting Korean hip-hop singer with novelty dance moves, become hailed as the ‘undisputed King of Pop’ and inspire global tributes, from Eton College students to Filipino prisoners? The 34-year-old, whose real name is Jae-Sang Park, was born on December 31, 1977, in the affluent Gangnam District of Seoul. His music inspirations growing up were English and American Rock legends such as Queen and Bon Jovi, Aerosmith and Guns N’ Roses. In an interview on CNN last year, PSY reminisced that it was when watching Freddie Mercury perform Bohemian Rhapsody during a Queen concert that his love for music was ignited. It was a performance from 1975 and the 15 year old PSY was hooked. Park was originally destined follow in his fathers footsteps and take over the reins as Executive 40 | ELEVATOR MAGAZINE

Chairman at DI Corporation (a South Korean semiconductor manufacturer), applying to study Business Administration at Boston University in the US. But he didn’t graduate from Boston, or from Berkeley College of Music, where he studied for a couple of years after leaving Business studies behind (“class was too early for me”) - instead he ditched the classical music training and returned to Korea to pursue his singing career his own way. PSY launched his music career in 2001 with his debut album PSY from the PSYcho World! - a hit with Korean teens but the album promptly earned him a fine for ‘inappropriate content’ and for the ‘negative influence’ it would have on children. Park certainly hasn’t shied away from controversy since, continuously stirring up the Korean music scene with his unpredictable lyrics. His 2010 single Right Now was banned from under-19 audiences by South Korea's Ministry of Gender Equality and Family for what it deemed to be obscene lyrics (more recently Park recently issued a public apology to America live on CNN for his participation in anti-American concerts in 2002 and 2004 and for the anti-American lyrics he used at the time, condemning the US military for their role in the Iraq war). But despite his critics, the effervescent singer was continuing to top Korean music charts and earning songwriting accolades at the SBS and Seoul Music Awards. By the time PSY signed with South Korean music label YG Entertainment in 2010 (one of Korea's largest talent agencies and record labels), he was already a famous figure in his home country -

Profile | PSY


bringing his flashy style and furious hip-grinding to the masses. In September 2012 “Gangnam mania” was showing no signs of slowing down, spawning Saturday Night Live sketches and showing his dance moves to the anchors on The Today Show. PSY held off competition from Rihanna, Katy Perry and Lady Gaga to win the ‘Best Video’ at the MTV Music Awards in November 2012. In October, he met UN Secretary General Ban Ki-moon at the United Nations Headquarters where Ban expressed his desire to work with the singer because of his “unlimited global reach”. In December, MTV noted PSY's rise from littleknown to “global superstar”, and hailed the singer as the “Viral Star of 2012”. On New Year’s Eve he performed in a globally televised celebration with American rapper MC Hammer in front of a live audience of over

1 million people in Times Square, New York City. As soon as the video went viral, PSY was the name on everyone’s lips. Celebrities quickly jumped on board; "Help, I'm in a Gangnamstyle K-hole," tweeted Katy Perry, whilst Britney Spears and Tom Cruise took to Twitter to discuss his wacky dance moves and video. The song reached No. 1 on the charts in Britain and No. 2 in the United States, and it topped the download list in China. The explosive popularity of Gangnam Style and ELEVATOR MAGAZINE | 41

his accelerated rise to superstardom has surprised everyone, not least PSY himself. As he explained in the Chronicle Herald in August 2012, ‘When I realized that some top stars like have imagined or tweeted about me, I thought, ‘That’s joking. That’s not gonna happen’ I never expect things like this, not because they are top stars, but because this is the biggest market in the universe for pop music, right, so everybody’s dreaming about having appearance in the U.S. so I’m still saying, ‘What going on here? This is beautiful.’’ Gangnam Style is a track from his sixth album, PSY's Best 6th Part 1. It’s a high-energy, hardcharging electro beat that gets in your head and stays there. The song’s lyric, “Oppan Gangnam Style” literally translates as “big brother has Gangnam style”, a reference to the lifestyle connected to the glitzy Gangnam District of Seoul (the ‘Beverly Hills of Korea’) - whilst in the video he parodies 42 | ELEVATOR MAGAZINE


The song’s lyric, “Oppan Gangnam Style” literally translates as “big brother has Gangnam style”

an ostentatious Gangnam man that clearly doesn’t have any ‘Gangnam style’ at all. You can’t help but be fascinated, and simultaneously confused. What can get lost however, is that beneath the infectious lyrics is a satirical subtext that highlights the gulf between the rich and poor in Gangnam, set within a context of the tensions that surround the national aspirations for prosperity. Spending to look wealthy is becoming a social norm in a country that is trying to come to terms with its new found G-20 status and rapidly appearing pockets of affluence. South Korea can proudly lay claim to being one of the world’s most compelling success stories, rising from war-torn austerity and harsh dictatorship, to democracy and thriving free enterprise in a mere half century. But the growth hasn’t been equitable. Park makes reference in his song to the ‘soybeanpaste girls’ who eat cheaply in private so that they can afford to drink expensive mocha frappe lattes in

Profile | PSY


PSY’s father, Park Won-ho, has even enjoyed some of his own success as a direct result of the song’s widespread fame.

public. Gangnam has been the leading edge of that - it holds over 7% of the countries wealth within an area half the size of Manhattan. But it’s hardly the song’s political message that’s generated its success in the West. PSY’s quirky foreign-ness and dorky dance moves are the more likely factors picked up on by his English-speaking fans. From the moment the craze started to reach such unexpectedly gargantuan levels of interest, there’s been analysis from reporters across the world, about changing worldwide tastes and changing culture. Park is, after all, the first globally successful example of K-Pop. PSY’s father, Park Won-ho, has even noticed a knock-on effect of the surge of consumerism triggered by the song's popularity. Thanks to “Gangnam Style” the value of his software firm has doubled, according to Reuters. Chinese journalists are heralding the rise of Korean pop music and the spread of Korean entertainment

as the next big phenomenon. The ‘Korean Wave’ genre has been noted since the late 1990’s. Whilst it may not have made much of a mark in Los Angeles or London (for the time being, anyway), could this be about to change because of “Gangnam Style”? Perhaps. But of course, this could all just be a random phenomenon that goes to illustrate the powerful global influence of social media channels and it's instant feedback provided by YouTube, Facebook and Twitter - with some celebrity endorsement thrown in of course - all of which have made it easier for K-pop musicians to reach a wider audience in the West. At any one time there are hundreds of thousands of quirky songs, funny dances and comedy video clips circulating through cyberspace that never reach such epic notoriety. But every now and again one escapes into the stratosphere and becomes so popular we’re all left guessing why. ELEVATOR MAGAZINE | 43


Blackstone is one of the greatest success stories of the modern day, we have a look at the man behind it and understand how Stephen A Schwarzman was able to build this financial behemoth. Words ROBERT HENDERSON

STEPHEN SCHWARZMAN HAS ENJOYED A stellar career, by any standard, and is listed among Time Magazine’s 100 Most Influential People in The World. That’s quite an accolade when you start to count up the world’s political leaders, ultra-wealthy and otherwise. He’s known for being ruthless in business whilst being prolific in his philanthropy. His background has been well documented and he remains a high profile figure respected and revered by his peers. He was born in Philadelphia in 1947 and his father was a local businessman, owning a dry goods store. His academic background was exemplary, having graduated from Yale before completing his MBA at Harvard in 1972. He went on to join Lehman Brothers where he progressed through the ranks to the position of Managing Director at the age of 31 and then on to become the Head of Global M&A. Many would have settled at this stage, taken a substantial salary and waited out a comfortable early retirement. Schwarzman had bigger and more ambitious plans and in 1985, at the age of 38, he left Lehman Brothers along with Peter Peterson, his then boss, and started Blackstone. Their initial focus was mergers & acquisitions and with a starting balance sheet of $400,000 they set about creating an 44 | ELEVATOR MAGAZINE

empire that has outperformed and outlived their previous employers, Lehman Brothers. The intention had always been to enter the private equity market but raising a first fund was tougher to raise than anticipated as neither partner had led a leveraged buyout. Peterson described the experience of that first fund raising as ‘grueling’ and the pair had been knocking on the doors of pension funds for months before finally having success with Prudential who offered the initial $100m. This first fund was finalized in 1987, shortly after the October stock market crash and included investment from GE. At $850m was the largest first time fund ever. The name Blackstone is a cryptogram of the founders’ names, Schwarz meaning black in German and Peter (or Petra) in Greek means stone, and was conceived by Peterson as a nod to their individual ancestry. The business grew rapidly during the late 1980’s and the Japanese bank Nikko Securities acquired a 20% interest in 1988 with an investment of $100m, valuing the still fledgling business at $500m. The business, and Schwarzman in particular, was also building a reputation for hiring and losing the best A-Players on Wall Street following highly publicized run-ins. Blackstone was known as a tough place to work, but financially very rewarding. The early 90’s brought further successes as the group created its first of many global real estate funds, investing in hotel chains and commercial property as well as private and publicly traded real estate securities. 15 years on from launching their first real estate fund



Blackstone had invested over $13bn in over 200 real estate deals including Hilton, Centre Parcs and La Quinta. The company was now a major league owner in real estate at a time when the market was poised for high returns. By the late 90’s Blackstone had a well structured and wide ranging portfolio of businesses and funds, often moving aggressively into markets and sectors overlooked or ignored by their competitors. Blackstone grew into a formidable business and by 2005 was riding the buyout boom and making considerable hay, so much so that Schwarzman and Peterson completed the first major IPO of a private equity firm in June 2007 when Blackstone filed with the SEC, raising over $4bn. Peterson retired the following year whilst Schwarzman continued to develop the business. Blackstone is widely recognized as one of the great success stories

of the modern era and Schwarzman is acknowledged as an astute CEO, many people have mixed feelings towards him but in deference to the consensus it’s fair to say that his financial success has also been shared with a multitude of worthy causes as well as numerous employees. Schwarzman married his first wife, Ellen Philips, in 1971 after they met at Harvard. They had 2 children, Elizabeth and Edward, and were divorced in 1990. Schwarzman met his second wife, Christine Hearst, and they were married in 1995. Having a ELEVATOR MAGAZINE | 45

net worth of $5.2bn comes with many advantages, one of which is the finest triplex apartment in the most prestigious Manhattan address, 740 Park Avenue. Schwarzman purchased the apartment in 2000 for a reported sum of $30m. Built in 1929 by the grandfather of Jacqueline Kennedy-Onassis, the building has just 31 residences and it takes more than just money to move in. Those hoping to buy apartments in the building need to be vetted and approved by the co-op committee and show a liquid net worth of $100m. Barbara Streisand, Neil Sedaka and Russian billionaire Leo Blavatnik have all fallen short of the mark and been declined by the committee. Schwarzman’s list of neighbors reads like a who’s-who of Manhattan’s wealthiest residents and includes oil heir David Koch, Ex-Merrill Lynch CEO John Thain, fashion entrepreneur Vera Wang and hedge fund billionaire Charles Stevenson, who now runs the co-op board. The Wall Street power 46 | ELEVATOR MAGAZINE


Schwarzman’s list of neighbors reads like a who’s-who of Manhattan’s wealthiest residents

couple also own a 13,000 square feet Palm Beach Mansion, as well as homes in St Tropez, Jamaica and East Hampton. In 2008 he made a high profile donation to the New York Public Library and the Fifth Avenue branch now bears his name. Much of Schwarzman’s philanthropic activity is centered around education and, along with his wife Christine; he pays for over 200 children each year to attend parochial schools in New York. He takes the time to read every one of their report cards and write to them, his strong belief being that education can get you to wherever you want to go. He cites, as a key influence, his grandfather who instilled a sense of charity within the family from an early age. He is, as you would expect, bombarded with requests for donations from organizations and individuals and is often surprised at the reaction when he feels it necessary to decline. Prior to his donation to the New York



he feels that he wants to be directly involved with any project he donates to and that’s understandable


Public Library he had agreed to donate $17m to his alma mater, Yale University, in return for having a freshmen’s dorm named after him. Yale later declined the donation when Scwarzman refused to give the money outright, instead offering $17m in Blackstone shares with conditions attached. It’s hard, and even unfair, to criticize someone who does make sizeable donations to good causes and I’d venture to suggest that Schwarzman has received unfair press coverage in this respect. What’s clear is that he feels that he wants to be directly involved with any project

he donates to and that’s understandable. At 65 Schwarzman is showing no signs of slowing down and he’s built an empire that’s made him one of the richest men in the US. His hard-nosed approach and ability to sniff out a deal make him a formidable competitor. His business philosophy is candid and simple, “I want war, not a series of skirmishes. I always think about what will kill the other bidder.” Wall Street thrives on aggression and Schwarzman is in his element.



JINPING From humble beginnings, Xi Jinping has risen to dizzy heights, with power over the world's largest economies. How has Jinping contributed towards making China the economic superpower that it currently is today? Words MAGGIE LIVERPOOLE

C H I N A H A S B U I LT A F E A R S O M E reputation as a growth economy over the last 30 years and has outperformed all neighboring East Asian Tiger economies. Its rise is by no means recent and is seen as powerful testament that, in some cases, a moderate communist economy can work. The secret of China’s economic strength can be traced back to the architect of its current governing system, Deng Xiaoping. Deng was a true political and economic visionary and had a peerless understanding of the difficulties involved in governing a vast country with a population exceeding 1 billion, and expanding fast. Communism was, and remains still, perhaps the most viable alternative for keeping such a huge economy stable whilst keeping control over corruption and regional unrest. His predecessor, Mao, had a fierce reputation and a brutal leadership style. Deng, on the other hand, as leader of the Communist Party recognized a need for tempered reform and led the country to its current position as a well-ordered market economy. Under his leadership there was a drive towards modernization in agriculture, manufacturing, technology and defense. Peasant farmers were allowed to trade their surpluses openly and the state stepped gradually 48 | ELEVATOR MAGAZINE

away from industry allowing businesses to trade with each other, without the need to trade via state operated markets. The legacy of a more capitalist style trading economy has been consistent growth of over 9% p.a. for the last 30 years, despite economical turmoil at various intervals elsewhere in the world. China continues to demonstrate its power as the workshop of the world whilst ignoring calls from other countries to address its human rights policies as well as its poor environmental record and flagrant disregard of international copyright and patent laws. Xi Jinping took over the office of General Secretary of the Communist Party in November 2012 and takes on the mantle of leading China towards its potential of becoming the world’s largest economy. Many leading thinktanks believe that this will almost certainly be the case within 15 years at current growth rates, which could mean that the world’s largest economy is not built on pure capitalism but rather a hybrid of political and economic thinking. A sobering thought indeed as many other large countries grapple with how to grow their GDP and develop their own standing. From the outset Xi has vowed to continue with the reforms of his predecessors and to take this further by removing inhibitive trade barriers with the west. It remains to be seen how far Xi will go with this but it’s evident that China can prosper even further if it can begin to show flexibility. Born in 1953 as the son of a communist revolutionary, Xi did not have the

Profile | XI JINPING


easiest of childhoods. His father was disgraced and the family suffered public humiliation, poverty and homelessness before Xi, at the age of 16, volunteered to live in a small village in Shaanxi Province in the north west of China as an ‘educated youth’. The area became a hotbed of communist revolutionaries who rose up to build what was to be a new and more modern China. His adolescence was spent in hard labor hauling coal and manure for the village but his hard work paid off and he gained the trust and respect of his fellow villagers who elected him their village Party Chief, his first official office. He grasped the role and began a series of projects to reinforce the local riverbank to prevent erosion, much to the delight of the local farmers. The party as a reward for his efforts and hard work awarded him a motorcycle, but he immediately traded this in for a walking tractor, flour milling machine and farm tools for the

community. Although not in school at this time Xi read well, gave himself a high standard of education and was recommended for enrollment at Tsinghua University in 1975, at the age of 22. When he left for Beijing to take his place at Tsinghua all the villagers queued to wish him luck and good fortune. Having arrived in the community less than 7 years earlier he left having earned the respect and gratitude of his fellow villagers and he never forgot this. He returned regularly and remained a pivotal influence helping the village gain access to power supplies, ELEVATOR MAGAZINE | 49

overseeing the renovation of the local school and setting up bridge building projects. As he became more powerful and more affluent he shared his good fortune with the villagers and remained in contact. After completing his university education Xi took a comfortable and well-paid office position and began his career in business, which was short-lived. Whilst his colleagues and friends took overseas study courses and started their own businesses in the newly reformed market economy Xi returned to his passion, party politics, giving up his comfortable lifestyle for a position as Deputy Party Chief in Hebei Province before taking the role of Party Chief of Ningde Prefecture in the Fujian Province, which was one of the poorest regions of China at this time. His dedication to the people he represented was again at the forefront of his mind and he frequently made exhausting trips into the far reaches of his territory to visit the small rural communities, many of which 50 | ELEVATOR MAGAZINE


Many remember his tenure in Ningde as a period of positive change and he became recognized as a champion of the common people

were several miles from the nearest mountain roads and were accessible only by arduous journeys on foot. These visits did not go unrecognized by the people who took him to their hearts in the same way as those in Shaanxi Province. He helped thousands of farmers improve their living conditions with extensive new housing programs as well as working with fishermen to offer them alternative work on land at a time when fish stocks were in severe decline. Many remember his tenure in Ningde as a period of positive change and he became recognized as a champion of the common people. He was as tough with local officials as he was warm to the people and was intolerant of any corruption or inability to act decisively. He set about ensuring that officials met with their people regularly and put into place processes of communication that are still carried out today. During this time Xi embarked on a series

Profile | XI JINPING


He immediately set about creating plans and targets to improve the infrastructure and economy


of strategic longer term plans for the development of the Fujian Province and lobbied for preferential policies outside of central government. His policies were groundbreaking and he oversaw a crackdown on food contamination as well as adopting environmental policies unheard of elsewhere in China. His understanding of the need for environmental policy within China as a way to improve living conditions could well be one of his many worthwhile legacies in years to come. He has tackled head on previously ignored issues of deforestation and land contamination within

Fujian Province and he has a clear long-term focus on protecting China’s rich landscape. In 2002 Xi was transferred to Zhejiang where he immediately set about creating plans and targets to improve the infrastructure and economy of the region. He encouraged industry from outside the province to invest and began to set up working partnerships with neighboring provinces. Within 2 years he had set up a system of grass-roots democracy allowing local communities an active voice in local party affairs. This political transparency brought a positive ELEVATOR MAGAZINE | 51

response from the communities and this model was deemed so successful as to be introduced nationally in 2010 by the National People’s Congress. In September 2006 Chen Liangyu, Party Chief of Shanghai, was dismissed following a fraud investigation surrounding social security funds. It was imperative that the new Party Chief would be an exemplary candidate and Xi was chosen for his outstanding track record and integrity. Shanghai was one of the most powerful regions and represented an important step up the political ladder for Xi, which he grasped willingly in early 2007. His tenure in Shanghai was short as he was rapidly elevated to Central Party Office in October 2007 as a member of the Politburo Standing Committee and then elected as Vice-President of The People’s Republic of China in March 2008. Since moving to Central Office, Xi was seen as the overwhelming first candidate for Party Leader. His record was unblemished by scandal or corruption and he has always been a popular choice with the people. He oversaw the preparations for the 2008 Beijing Olympics as well as being the government’s leading figure in Hong Kong and Macau. As a statesman he has the respect of many overseas politicians and has frequently hosted and visited presidents, prime ministers and foreign dignitaries. His straight talking and honest approach has improved trade and diplomatic relations previously strained with many countries. He has travelled extensively in recent years across Europe, Asia, South and North America in order to develop a more open and friendly trading relationship. This hasn’t always gone according to plan and Xi caused a degree of outrage during a trip to Mexico in February 2012 when he addressed Chinese students there speaking, perhaps too freely, about interference from other countries in Chinese affairs. “There are some bored foreigners, with full stomachs, who have nothing better to do than point fingers at us. First, China doesn't export revolution; second, China doesn't export hunger and poverty; third, China doesn't come and cause you headaches.” This was captured, as is often the case, on film and widely reported in Hong Kong catching The Chinese Ministry of Foreign Affairs unusually off-guard. Xi was married briefly in the early 1980’s to Ke Lingling, the daughter of China’s ambassador to the 52 | ELEVATOR MAGAZINE


Since moving to Central Office, Xi was seen as the overwhelming first candidate for Party Leader.

UK but the marriage ended in divorce within 2 years and little is known of the circumstances. Xi met his current wife, Peng Liyuan, in 1986 and they married in the same year. Peng is a renowned and respected opera and folk singer, and was a household name in China when they met. The couple has a daughter, Xi Mingze, who has been studying at Harvard since 2010. Xi and Peng appear to be the typical power couple in many respects and talk of their devotion to family life, despite having to spend extended periods apart. Xi’s extended family have substantial business interests although he has remained insistent that his name or reputation can never be used to further the business interests of his family and close circle of friends. Perhaps this is a sign of his single-minded ambition and overwhelming desire to retain a clean public image. It remains to be seen whether Xi will lead China in overtaking the USA as the world’s largest economy,

Profile | XI JINPING


There’s optimism that the new leadership will see a reduction in trade barriers


but it’s clear that he’s already played an important part in bringing China closer to this and many believe it’s an inevitability. There’s no doubting that China has been the most consistent economy over the last 35 years. Xi will assume the presidency in March 2013 and has already begun taking steps towards tackling corruption by requiring officials to report their assets regularly. We’re likely to see a new era of scrutiny amongst those in the public sector that could easily upset the apple cart. It’s widely recognized that many highlevel government posts have been ‘sold’ in the past and Xi openly admits that the Chinese house is not entirely in order. His rapid reform approach is at

odds with the culture of not making changes too quickly but is welcomed nonetheless. Outside of China there’s optimism that the new leadership will see a reduction in trade barriers, addressing of key human rights issues and more openness and inclusion in international efforts to curb climate change. China often gets a tough time from foreign press and is frequently misunderstood but with greater openness comes better understanding and faster progress towards a common goal. It’s hard to speculate on what will drive Xi in his quest for a better China but few would doubt his credentials and ability to roll up his sleeves and get stuck in. ELEVATOR MAGAZINE | 53

AN APPLE PER DAY The business press has been filled with stories surrounding Apple over the last few years and no other company has had as many column inches dedicated to its every move. Words STEPHEN MCGRATH

WE ALL KNOW THE STORY OF APPLE, ITS vast scale, its huge success and most of us are starting to get a little tired of reading about it endlessly. I’ve reached Apple fatigue, in the same way that I’ve reached Facebook fatigue. This ‘fatigue’ is by no means a new phenomenon but it’s a precarious position to be in. I’m not suggesting for one minute that Apple is about to collapse and implode in an apocalyptic and spectacular bang, nor am I suggesting that the legion of fanboys (and fangirls) will desert the brand in droves. Having said that I would like to table the idea that Apple could well see a settling period in its growth. I do believe that Tim Cook is the right man to lead the company and I’m not of the opinion that if Apple’s crown were to slip it would be as a result of the loss of Steve Jobs. The immense pressure of remaining innovative may just be too much for the company and I’m not 54 | ELEVATOR MAGAZINE


The immense pressure of remaining innovative may just be too much for the company

alone in my belief that it’s all got a little bit boring. When the iPod arrived it was a great product and well received. The iPhone was another great product that crashed its way into the mobile phone market, but the constant rumors and whispers surrounding what Apple will do next is getting tiresome. I’ve been a loyal customer of Apple since the first iMac was introduced, mainly because I loved the way it looked, rather than how it performed. I became hooked on the Mac experience and, until the recent release of Windows 8, I thought I’d always be an Apple kind of guy. Like many I’m happy to pay a premium for a great product and I bought into the iPod, iPhone and iPad, all of which I still believe are best in class by a country mile. Apple’s strength is in selling quality premium products and they quickly carve a niche that makes it hard to compete with them. What has become tedious is the necessity to create

Companies | APPLE


The iPad Mini was inevitable and, although a good product, it hasn’t really excited many of us

'I BOUGHT INTO THE IPOD, IPHONE AND IPAD, ALL OF WHICH I STILL BELIEVE ARE BEST IN CLASS BY A COUNTRY MILE' a song and dance show every 6 months as a new and better product is released. Apple’s rapid innovation could well be its undoing as consumers become aggrieved with the deprecation of products before their natural lifecycle. Anyone who bought a first

generation iPad last year will already be aware that they are omitted from the latest iOS6 upgrade and this is not an isolated incident. The division between Apple lovers and haters has been drawn deeper than ever before and what was once a symbol of cool is now simply an everyday object. The iPad was the last great innovation from Apple and, like so many products, it was a reinvention of a product, which had failed in the hands of previous innovators. New products arrive but they are understandably predictable. The iPad Mini was inevitable and, although a good product, it hasn’t really excited many of us. Rumors of the new Apple watch are equally predictable, as Android watches have been trying to tempt us unsuccessfully into the smart-watch age for a little while now. I don’t suppose Patek Phillipe will be quaking in their boots but the much talked about Apple iWatch (if ELEVATOR MAGAZINE | 55

that is to be the name) will certainly dent the mid market. It’ll sell well, which is a given, but it could also be a milestone on consumers’ fatigue for Apple products. What Apple shareholders will want is an unrealistic level of continued growth and Tim Cook is facing an impossible task if his priority is purely pushing the company’s share price higher and higher. The company has diversified substantially since its early days as a manufacturer of personal computers and now has a wide range of electronics products including set top TV boxes, tablets, MP3 players, mobile phones and so on. There are persistent rumors of an Apple smart TV as well as AR glasses, a car, a bike etc. Apple has become a design business but do we all want to fill our lives so entirely with Apple products? If Apple created a revolutionary new car would we really go crazy for 56 | ELEVATOR MAGAZINE


What Apple shareholders will want is an unrealistic level of continued growth

it? Do I want an Apple refrigerator that replenishes itself by ordering groceries online to be delivered at a time that fits into my iCloud calendar and schedules it for me? I made that up, but it’s not far from the truth. Apple’s share price has dipped a in recent months wiping $248bn from its market cap by the end of 2012, but still showed a 28% increase over the year. This could be caused by possible changes in capital gains tax rates, but also there is a undercurrent of diminished investor confidence as rivals, in particular Samsung and Microsoft, start to nibble away at Apple’s core markets. Business Insider recently suggested that more money was lost in Apple during Q4 2012 than HP and RIM combined (see here for details UuuOEu). Analysts are largely united in the opinion that Apple was overvalued at its high of $705.07 but

Companies | APPLE

'WHAT SHAREHOLDERS WILL WANT IS AN UNREALISTIC LEVEL OF CONTINUED GROWTH AND TIM COOK IS FACING AN IMPOSSIBLE TASK' are divided on what a realistic figure would be. Both private and institutional investors have been sucker punched in their belief that Apple stock is bullet proof. Rochdale Securities were hit hard in October

2012 when rogue trader David Miller speculated with the firm’s own balance sheet and bought $1bn of Apple stock prior to the release of October results. The consequences were disastrous and Miller’s unauthorized actions cost the Connecticut based firm over $5m against its capital cushion of $3.5m. Miller reportedly closed down his computer at the end of the trading day, quietly left the floor and never returned. He was arrested on charges of wire fraud in early December and released on $300k bail awaiting trial. The firm looks unlikely to survive but what Miller’s motivation was for such a daring rogue trade remains to be seen. So what about all the rumors of new products and new market strategy? Are we to ignore the analysts and take our own view on what could happen based on our own gut instincts? Your guess is as good if not better than mine. In order to refine our guesswork

dipping share price

Apple’s share price has dipped a in recent months wiping US$248bn from its market cap by the end of 2012


'TIM COOK HAD A TOUGH FIRST FULL YEAR IN 2012 AND LEARNED SOME IMPORTANT LESSONS' we should consider what might happen for Apple in 2013. What the rumor-mill believes will happen: The fifth generation iPad will almost certainly arrive in March 2013 and will be thinner and lighter than its predecessor, alongside the second generation iPad Mini, complete with retina display. This is hardly earth shattering news and is what we’ve come to expect. The iPhone 6 is anticipated to arrive in the autumn and expected to come with a new curved screen and without the home button, which could be replaced with on screen gesture control. None of this is particularly spectacular but will help keep the iPad and iPhone ahead of its competitors. Apple will put us out of our collective misery and finally release the TV set we all keep hearing about. Rumors suggest that the new smart-TV will include FaceTime and Siri as well as motion control. I’m not convinced that Apple will enjoy the same success in TV market as it has elsewhere, but this remains to be seen. The iWatch has been lauded as the possible end of the smartphone era and as a concept is interesting. I was fascinated by the LG watch phone in 2010 and felt it had potential so maybe this could be a huge success for Apple and an opportunity for them to create a market where LG arrived too early. It’s an early stage market that should be taken very seriously as 70,000 people contributed US$10m to the Pebble project on Kickstarter, an iOS enabled watch that connects directly to an iPhone. A further overhaul of the iMac range including the Mac Mini and a range of budget end component products is widely predicted. This seems unlikely, although would make good sense. What many of us would really like to see: Apple still has a relatively small share of the home 58 | ELEVATOR MAGAZINE

computing market at around 5%, mainly as it’s priced out of many consumers’ budgets. If Apple were to decide that there was long-term value here by leveraging their supply chain then there is certainly scope for expansion in this sector. The Mac Mini is genuinely a good product, but it’s a halfway house and if Tim Cook wanted to stamp his own vision on the company then perhaps an about turn on mid-market/budget-market policy could be the answer. I’d understand that diluting the premium brand message would be damaging, but the creation of a sister brand could be the answer. Look to Mercedes – Smart and Prada – Miu Miu as great examples of quality brands extending their reach without damaging their core appeal. If Apple want to win more of us over then it’s time

Companies | APPLE

to scrub out some of the less savory legacy elements. Investment into bringing more manufacturing back the US could be great PR in the home market and there’s a growing consensus that Apple needs to do more publicly to address its social and environmental policies. Consumers are also getting tired of hearing about the endless lawsuits and maybe it’s time for a time-out on the legal battles. Tim Cook had a tough first full year in 2012 and learned some important lessons, but has come through this looking stronger and more determined. The company’s mistakes are ‘his’ mistakes and the Maps fiasco undoubtedly would not have happened under the Jobs regime, but Cook reacted quickly and decisively removing former iOS chief Scott Forstall and offering a very public apology (see here

tim's time

Tim Cook had a tough first full year in 2012 and learned some important lessons showing that acknowledging mistakes is not a sign of weakness but of strength. Inside the company it’s believed that senior level staff were relieved to see Forstall go and Cook’s ratings are high within the business. Whether Apple has passed its market peak is a matter of ongoing and tedious debate but none of us will be greatly surprised by whichever direction the business takes or whatever products it releases. As for Jobs’ legacy, well that’s drifting into history and Cook is proving to be a worthy replacement.


BUILDING BLOCKS We have an in depth look at the history and dramatic changes the team behind Lego have had to make over the years to keep the business profitable. Words DEREK FALCO

LAST MONTH MY FATHER CAME TO VISIT and brought with him, for my son, a large yellow bucket of assorted and mismatched Lego he’d picked up in a thrift shop. I smiled and thanked him on behalf of my 2 year old who I had wrongly assumed wouldn’t deviate his gaze from Fruit Ninja for a second. Never having seen Lego before he was in the bucket and rummaging, tipping the contents onto the floor. I watched as he turned them in his hands, studying each side before accidentally snapping 2 bricks together and then another more purposefully. Within minutes he had built something. I’d like to say it was a wall or a building, but it was more of a mess of blocks that he immediately destroyed before starting again. I shouldn’t be all that surprised as children will explore any object, but the speed in which he figured it out was astonishing. Lego seems to somehow fulfill a child’s (and adult’s) need to 60 | ELEVATOR MAGAZINE


There are many myths and legends surrounding how Lego came into being...

make something. There are potentially 915,103,765 permutations using just 6 standard 8-stud Lego bricks (see here for proof and the possibilities offered by an old box of assorted bricks and figurines are limitless. Ole Kirk Kristiansen, a Danish carpenter and furniture maker founded the company in 1932. There are many myths and legends surrounding how Lego came into being, but it’s believed that Kristiansen had begun to make miniature model versions of his furniture before building in full scale and this inspired him to also begin making wooden toys. The Great Depression of the 1930s was crippling to the business and Kristiansen began focusing more on toy products in order to stay afloat. The brief yo-yo craze in the mid thirties gave him the lifeline he needed and when this died out he was left with a large quantity of yo-yo parts that he then

Companies | LEGO


The name Lego was adopted in 1934 and is derived from the Danish leg godt

'THE NAME LEGO WAS ADOPTED IN 1934 AND IS DERIVED FROM THE DANISH LEG GODT, MEANING PLAY WELL' used as wheels for a range of toy trucks. The company had begun to make toys that could be dismantled and reassembled when in 1947 Ole Kirk and his son Godtfred, who was now working for the family business, came across a product made by Kiddicraft in the UK, an interlocking brick. By 1949 they had created their own version,

manufactured from cellulose acetate, which became the first Lego ‘Automated Binding Bricks’. The name Lego was adopted in 1934 and is derived from the Danish leg godt, meaning play well. The market for plastic toys at the time was limited, as consumers preferred more traditional wooden toys. Many of Lego’s original retail customers were soon returning unsold stock and losing interest, but the Kritiansens persevered and continued developing the idea, creating a secure locking brick that could be easily assembled and pulled apart. It wasn’t until 1958, when Godtfred had taken over the running of the business that Lego had evolved into the locking format it still uses today, with a hollow underside. By 1963 the business was employing 450 staff and had switched to a more resilient plastic, ABS, which is non-toxic and still used today. Godtfred Kristiansen had plans for the business ELEVATOR MAGAZINE | 61

and began to expand the range during the 1960s to include full modular building sets, wheels for vehicles, electric motors and more. Lego had evolved from simple bricks into a more sophisticated range of product that was now taking more and more shelf space in toy stores everywhere. In 1968 the company opened the first Legoland Park in Billund, Denmark, which featured miniature towns and intricate models built entirely from Lego. The park was a roaring success and attracted close to 650,000 visitors in its first year. Lego was becoming much more of a brand that the Kristiansens could have imagined and business was booming. Through the 1970s they continued to add to the range, introducing Duplo for younger children as well as adding figurines and ever more complex product packages from pirates to astronauts. Adults and children alike were competing in Lego building tournaments and the range had become a staple for toy retailers the world over. It’s estimated that for every person alive today there are 65 pieces of Lego and the company remains the world’s largest manufacturer of tires (worth remembering for random general knowledge quizzes). The business has gone through some tough times in recent years and in 2003 sales of their seemingly ubiquitous products spiralled down causing competitors and predatory private equity groups to start circling. It seemed that the longstanding family owned business was finally going to have to succumb to pressure and, heaven forbid, begin rescue talks before what seemed like an inevitable looming bankruptcy. In 2004 losses were running at almost $350m, alongside a debt balance equivalent to its annual sales few expected the Kristiansen family to take any other route than finally sell out. In October 2004 Jørgen Vig Knudstorp was appointed CEO tasked with turning around the losses. Knudstorp had joined Lego in 2001 from McKinsey and was a surprise appointment to many but an inspired move nonetheless. He immediately set about reviewing the business structure from the top down, asking difficult questions and tightening control of costs whilst refocusing on the core product. This all seems like jargon and a text book reaction, but it worked and it worked quickly and Knudstorp had managed to adjust the complacency and culture within the business whilst building trust with all levels of staff by making himself visible and 62 | ELEVATOR MAGAZINE


There were 3 failings within the business culture at Lego, which Knudstorp identified immediately

approachable to everyone. What Knudstorp has pulled off here cannot be underestimated and had he not been handed the reins it’s highly likely that Lego would have been consumed by competitors and stripped to its bare bones. There were 3 failings within the business culture at Lego, which Knudstorp identified immediately; a flat refusal to ever compromise on quality, a refusal to acknowledge that the world was moving on and a complacency towards profits that led to an assumption that the business couldn’t make a loss, hence profit was considered an unspeakable word amongst Lego’s 8,000+ workforce. This is not a unique problem and many have cited similar reasoning for the demise of Kodak and others who have fallen from dominant positions at remarkable speed by assuming they are simply invincible. Lego had become a lumbering giant with

Companies | LEGO


we can see the start of a decline in the company’s fortunes in the late 90’s


'IT SEEMED THAT THE LONG-STANDING FAMILY OWNED BUSINESS WAS FINALLY GOING TO HAVE TO SUCCUMB TO BANKRUPTCY' unrealistic brand ambitions that led it to ignore its core market. Years of investment in a range of clothing, watches and more theme parks had left the business with a problem. This problem was caused

partly by the assumption that things could only get better and Lego’s loyal fans would want to buy into the brand as long as new and varied products were released, sound familiar? In some respects the business was lucky to have hit the rocks before 2007, as the outcome may have been very different. Stepping back for a moment we can see the start of a decline in the company’s fortunes in the late 90s. Whilst full financials weren’t released publicly it was well documented that the business has been making losses and yet continued to push forward with evermore disparate product lines including software, robotic and movie camera kits as well as further investment into clothing lines and yet more theme parks. The opening of a fourth Legoland in Germany in 2002 was yet another bold move in their ambitions to become the world’s leading brand for children by 2005. ELEVATOR MAGAZINE | 63

Knudstorp had a tough job on his hands and was adamant he would not be taking the expected approach of slashing jobs and selling off parts of the company straight away, opting not to panic and consider the overall picture more carefully. He knew the clock was ticking and he flew to Virginia to attend BrickFest, the annual event for adult Lego fans. This was a shrewd move and Knudstorp took the time to talk to his loyal customers and hear what they had to say. It was important to understand what Lego meant to its core customers in order to give them what they wanted. He then visited MIT, where he’d studied for his PhD, and met with old colleagues there to discuss the problems he faced. Time and time again he was being told that Lego is the ideal way for a child to learn about creativity and improve problem-solving skills. It stretched young and fertile minds in a way few other toys could, as it required 64 | ELEVATOR MAGAZINE


In early 2004 Knudstorp announced his plans for Lego that included cost cutting and a return to the core product

direct input in a way that video games did not. This was reinforced when the founders of Google were featured in a Time Magazine cover story praising Lego for helping to shape the way they tackled problems by teaching them basic problem-solving skills at an early age. Knudstorp realized quickly that Lego’s own problem was that it had lost sight of its core product value, it had tried to move with technology and the expectations of a global brand giant when it should have been sticking more closely to its roots. Lego sets had a purpose whereas a Lego t-shirt or watch had no real relevance and these distractions were causing deep-rooted damage. In early 2004 Knudstorp announced his plans for Lego that included cost cutting and a return to the core product ranges that were integral to profitability. His first step was to sell off any part of the business that wasn’t core to the product range.

Companies | LEGO Cutting out the rot and removing any unnecessary weight immediately improved the cashflow position and Knudstorp oversaw the sell off of a large part of the company’s real estate including property in Asia, Australia and the US. Lego had a longstanding policy of owning its buildings rather than leasing and this accounted for a substantial amount of potential cash value that was vital if the company was to survive. The continuing purge saw the sell off of the theme parks to Merlin Entertainment and the video games business was closed down and sold to more able outside licensing partners. Once the non-core areas had been addressed Knudstorp then set about the difficult task of laying off staff, which had been a sore subject for the Kristiansen family. Over 1,000 of the company’s 8,400 staff were shed as more simple areas of production were being outsourced to Eastern Europe and Central America. The remaining staff had to be carefully re-educated to understand that profitability was now at the top of the agenda. Performance related pay was introduced across the company and processes were sped up. In the past it had taken an average of 2 years to bring a new product to market and this was cut to 12 months as a sense of urgency was instilled. More redundancies followed and a further 3,000 departed as production became more streamlined. The range of Lego components were reduced by over 50% from around 7,000 to nearer 3,000 as Knudstorp pushed on with his plans to take Lego back to basics. Time and time again Knudstorp referred to his ‘Moments of Truth’: When it’s advertised, does it make a child say ‘I want this’? Once the child opens the box does it make him say ‘I want more of this’? One month later, does the child come back to the toy and play with it again? Or does he put it away and forget about it? The results of the overhaul were extraordinary and Lego began to grow and move back to profitability faster that anyone could have imagined. By the end of 2006 Lego was finally showing a return to profitability with a net profit of $30m, which grew modestly in 2007 to $32m but the corner had been turned and despite dramatic turbulence in the global economy since 2007 the company has gone on to show remarkable growth with a staggering reported profit of $300m in 2008. This has been

'THE RESULTS OF THE OVERHAUL WERE EXTRAORDINARY AND LEGO BEGAN TO MOVE BACK TO PROFITABILITY. BY THE END OF 2006 LEGO WAS SHOWING A RETURN TO PROFITABILITY WITH A NET PROFIT OF US$30M' by no means a fluke and despite stiff competition the company grew its profits by 40% year on year in 2009 and 2010 and issued details of a $730m post tax profit in 2011. The company’s headcount has risen from 4,199 in 2007 to 9,374 in 2011 and Lego now produces over 29bn components each year, 19bn of which are manufactured in Billund, Denmark. What has happened here is a powerful case study for any students of business in the modern era. Few would have bet on Lego not being swallowed up in 2004 and the fact that the company remains the third largest toy manufacturer in the world can be attributed to the focus of Knudstorp and the 9,000+ staff at the company. The addition of new CFO John Goodwin in late 2012 from Proctor & Gamble could well be the last brick in a near perfect team of A-players and Knudstorp hasn’t shown any signs of taking his foot off the pedal either. As Lego takes more considered steps into new markets and new technologies it will continue to strengthen and the competitors who were circling in 2004 could well become targets themselves in the near future. Whatever happens it’s great to see a brand beloved of millions regain control of its own destiny and show us all that there’s a place for Lego in the modern world, even if it is spread across my kitchen floor from a battered old yellow bucket. I doubt that’s the last of the Lego to find its way into my house, but I don’t mind at all.


Lego now produces over 29bn components each year, 19bn of which are manufactured in Billund, Denmark.


ROTTEN FRUIT BlackBerry have had one of the toughest few years in the history of the business. With network problems and poor sales behind them, does BB10, their new software have what it takes to save the company? Words GEORGE GIDDEON

IT SEEMS AS THOUGH RIM CAN’T STOP the seemingly inevitable decline of the Blackberry. The brand once adored by the corporate world has slipped up again and again and no amount of PR spin or claims of a comeback can convince shareholders or potential investors that the good times will be back. Back in the day RIM had a great idea to bring phone and email together launching the first Blackberry devices in 1999. Their great success came from being the first to offer a system a device and the software to back it up, which placed them in a position where they had control of their destiny whilst others struggled to marry together these three components. Nothing came close and it wasn’t long before every suit was glued to a Blackberry and the growth in market share was remarkable, yet predictable. Over the last few years the executives at RIM have 66 | ELEVATOR MAGAZINE


The first real wobble came when RIM dismissed Apple’s iPhone to its peril.

been scratching their heads trying to understand what’s gone wrong for their beloved Blackberry brand, but the answer here is not one single event, but a long line of PR blunders and misunderstanding of the device market. There’s been a disastrous level of miscommunication within the company and from the outside it appears to be a chaotic circus of panic and slapstick marketing. All this aside it’s important to remember that Blackberry is not yet out for the count although it’s going to take a seismic shift in corporate culture to bring them back to any semblance of past glories. To fully understand just how far RIM misses the target let’s have a recap of events from the last five years. The first real wobble came when RIM dismissed Apple’s iPhone to its peril. Former CEO Jim Balsillie was quoted at the time as saying, “It’s one more entrant into an already busy space

Companies | BLACKBERRY


The Blackberry Torch arrived in 2010 as a hybrid touchscreen and physical keyboard device and was hailed as the answer to Blackberry’s sliding market share.

'IT’S ONE MORE ENTRANT INTO AN ALREADY BUSY SPACE WITH LOTS OF CHOICE FOR CONSUMERS' with lots of choice for consumers, but in terms of a sea-change for Blackberry I would think that’s overstating it.” Balsillie openly laughed off Apple’s attempt to enter the mobile device market saying that touchscreens would never replace the physical keyboard and this new breed of smartphone had no place in Blackberry’s core market. It’s one thing to

deny the potential of touchscreen devices, but to be so complacent as to publicly denounce what was to become the world’s most popular mobile device was an expensive error in judgment. The company rolled on with its existing device range but realizing its mistake hastily released a touchscreen device, The Blackberry Storm, which was hardly a worthy competitor to the iPhone. It had no WiFi capability and poor touchscreen functionality. It sold below expectations and left loyal customers wondering what was going on. The Blackberry Torch arrived in 2010 as a hybrid touchscreen and physical keyboard device and was hailed as the answer to Blackberry’s sliding market share. The truth was that it was cumbersome and behind the times. Sales were poor with only 150,000 devices shipped in the first three days, compared to 1.7m iPhone 4 devices sold at launch. The tide ELEVATOR MAGAZINE | 67

'THE MUCH-LAUDED NEW OPERATING SYSTEM, BB10, HAS BEEN A LONG TIME IN COMING. THE LAUNCH HAS BEEN DELAYED SEVERAL TIMES AND PERHAPS RIM HAVE LEARNED THEIR LESSON IN THIS RESPECT AND HAVE REALIZED THAT IT’S NOT A GOOD IDEA TO RELEASE ANOTHER PRODUCT BEFORE IT’S FULLY READY AND OF A COMPETITIVE STANDARD' had turned and RIM had not only taken their eye off the ball, but they wouldn’t accept the fact that consumers weren’t interested. They seemed to have forgotten the end user and stuck rigidly to trying to please corporates and carriers. Other manufacturers were showing the consumer what they would want and RIM were asking suits what they thought. We see a similar story in the tablet market with Blackberry dismissing these new devices at first and then hurriedly releasing their own Playbook, which was a vastly inferior product and had fundamental flaws, namely its lack of email support. The die was cast for RIM, Playbook sales were dismal and the lack of a plentiful app store has left RIM struggling to convince developers that they should be building Blackberry or Playbook apps. This is a problem that still exists and no amount of financial incentive seems to be enough for the app development community to be enticed. The much-lauded new operating system, BB10, has been a long time in coming. The launch has been delayed several times and perhaps RIM have learned their lesson in this respect and have realized that it’s not a good idea to release another product before it’s fully ready and of a competitive standard. The launch is scheduled for this week (at the time of writing end of Jan 2013) and RIM are planning to launch six new mobile devices this year in a bid to recapture market share. I’m not alone in being unconvinced, but at the same time I wish them well and would like to see RIM pull itself back from the brink in true Hollywood style. Setting aside the well-documented flaws in the Blackberry product range, its software and anticipation of market trends, we should take a look at the wider picture and PR slip ups in recent 68 | ELEVATOR MAGAZINE

years, which read like a slapstick training manual for budding PRs. In 2007 Balsillie, then CEO, took the blame for a stock-option scan that cost the company $250m in restated earnings. The blunder cost him $5m of his own money and rocked investor confidence in his ability and integrity. Co-CEO Mike Laziridis did little to rebuild confidence and quickly earned a reputation for complaining about shareholder unrest. Senior employees within the company were losing faith in their co-CEO’s ability to steer the company and embarrassing email leaks in 2010 and 2011 showed senior executives complaining about senior mismanagement at board level and a dangerous misunderstanding of their customers. The response to this was weak and the PRs sat quietly waiting for the storm to die down. In 2011 the network experienced a severe outage of service for days, leaving corporate users stranded. Whilst most customers will accept there will be occasional problems, the handling of communication from RIM was poor and the consequences were damaging as many corporate clients started to look elsewhere for fail safe options. A year later the problem re-occurred and this time the timing was embarrassing to say the least as Apple launched the iPhone 5 in a fanfare on the same day. Add to this the stories of drunken senior execs attacking airline staff on a flight to Beijing and a string of public gaffes and it’s easy to see why shareholders have lost their patience and why the founding CEOs needed to be replaced in early 2012. Thorsten Heins was appointed as president and CEO with a mammoth task on his hands. Since Heins arrival there has been some degree of change in culture and more caution being taken around product development and launch. Frustratingly


The die was cast for RIM, Playbook sales were dismal and the lack of a plentiful app store has left RIM struggling to convince developers that they should be building Blackberry or Playbook apps.

Companies | BLACKBERRY


for Heins one of his first public interviews involved bashing touchscreen devices and this coincided with a Blackberry TV ad campaign in which Meredith Valiando extolled the virtues of keypads over touchscreens. Blackberry announced shortly afterwards that the first BB10 devices would be all touchscreen. It’s hard to imagine what RIM must be thinking and why the entire communications team has not been replaced. What’s still surprising is Blackberry’s inability to follow a suitable marketing strategy as we have seen a succession of advertising campaigns and PR stunts backfire. The Be Bold campaign was a universal flop and failed to identify with any sector of Blackberry’s customer base. The brand was fast losing corporate market share and becoming synonymous with teenagers who were unable to afford iPhones, which has lead to a dilution in the perceived value of the product. The company

sent a flash mob to the Apple Store in Sydney holding banners saying ‘Wake Up’, deliberately inciting the Apple Fan Boy community. At first it was believed Samsung had organized the stunt, but when they rigorously denied involvement RIM had to step up and rather awkwardly admit blame. All told it’s going to be a tough road back for RIM and they haven’t done enough yet to instill confidence. The future of RIM is hinged on the success of BB10 this year and it’ll take a minor miracle to bring them back into play with the likes of Samsung and Apple and with Nokia dragging themselves back into the game I can see a continued rough ride ahead for Blackberry.


The future of RIM is hinged on the success of BB10


SWEDISH HOUSE FURNITURE The company's furniture is omnipotent, could Ikea be one of the most successful private companies? Words SAMUEL RILEY

BACK IN THE MID-NINETIES I WAS working for an interiors magazine and I spent the better part of a year schlepping through houses and apartments in London, Paris, Rome and Manhattan as well as countless country piles. The guilty secret that soon became apparent in all these places was that not one of them was entirely devoid of an IKEA product. Not one, and believe me I started making a point of asking. Those who said no immediately soon changed their mind and remembered that they had some plates, a wastebasket or at least something they’d picked up whilst shopping at IKEA out of curiosity. This is the great thing about this brand, you will find their products in the most modest social housing often as easily as you will in upper west side apartments. I have seen Ikea furniture sit as comfortably alongside Eames and Le Corbusier as I have alongside Pottery Barn. I even own some 70 | ELEVATOR MAGAZINE


The business has a net shareholder equity valued at around $23b and ownership of this is controlled under a corporate structure of holding companies

myself, and I’m very happy with it. IKEA is a complex business and not an easy one to understand from the outside. It’s not a public company and has no need to follow that path having successfully grown to become the word’s largest furniture retailer without the need for outside investment or IPO. In the simplest terms the business remained under the control of founder Ingvar Kamprad until he retired in 1986. The business has a net shareholder equity valued at around $23bn and ownership of this is controlled under a corporate structure of holding companies. Kamprad created a charitable foundation in 1982, which took ownership of the majority of the business and now controls the holding company, which owns 90% of IKEA Stores. There is a separate company within the IKEA group, which owns IKEA trademarks and intellectual property,

Companies | IKEA


From small acorns big oak trees grow and if you need proof of this then IKEA is your evidence

KAMPRAD CREATED A CHARITABLE FOUNDATION IN 1982, WHICH TOOK OWNERSHIP OF THE MAJORITY OF THE BUSINESS and this is owned by yet another holding company, based in Lichtenstein, which exists to save IKEA companies from high European and US taxes. It’s

hard, and a little unfair, to place IKEA in the same tax-avoiding group as Amazon, Starbucks and others given that it uses a large percentage of profits to donate to selected charities. From the outset Kamprad wanted to retain control of his business and deliberately avoided the suggestion or offer of outside investment, preferring to do things his way and without interference. From small acorns big oak trees grow and if you need proof of this then IKEA is your evidence. Kamprad founded the company modestly in 1943 at the age of 17 with money from his father. The name IKEA is taken from his initials and the first letters of the farm and village where he lived, Elmtaryd and Agunnaryd. He used the money from his father to buy stocks of pens, picture frames and household items, which he sold locally at discount prices. By the end of the Second World War in 1945 Kamprad ELEVATOR MAGAZINE | 71

added a mail order service to the business and delivered the packages himself to the local railway station. Business was good after the war and Sweden was well insulated from the economic hardships of post-war Europe, giving IKEA the perfect environment to capitalize on the modern demand for furnishings. By 1948 the first range of furniture was introduced and although not yet flat-packed for self-assembly the pricing was keen and suited the mass market. The first retail showroom opened in 1953, some 10 years after Kamprad had started out and it was another 3 years before the company moved into the flat-packed furniture business almost by accident. Local suppliers had been getting agitated by IKEA’s growing control over their own businesses and enforced purchasing agreement terms, the upshot of this was an organized boycott of IKEA by local suppliers which led Kamprad to rethink his supply chain strategy. Company folklore has it that the idea of flat packing came from an employee taking home a table, but being unable to fit the table into a car had removed the legs only to re-attach at the destination. However the idea was formed is irrelevant as flat packed furniture was born and would go on to dominate furniture sales around the globe. The business really began to grow at a greater pace from the late 1950s onwards and by 1959 IKEA was employing 100 staff. Having been founded 16 years earlier this may not seem like a giant leap forward, but keep in mind that Kamprad had started the business on a modest gift from his father at the age of 17 with no prior experience and was about to ride the crest of a wave that would see households in Europe and America take up the latest craze of home improvement, which still exists today. Kamprad continued to build the company brick by brick, adding products to the range, cafeterias within stores and looking more and more towards eastern Europe for a cheap supply source of quality materials. In 1963 IKEA opened it’s first store in Norway, its first step to internationalization and continued to build larger and larger stores rather than smaller stores in concentration. Kamprad had long believed that people would be prepared to travel if he could offer the largest choice and range at the best prices, and he was right. By the mid 1970s IKEA had stores across Europe and was about to enter the Australian and North American markets. The range 72 | ELEVATOR MAGAZINE


although he is one of the world’s wealthiest men he is still know for his philanthropy

of products continued to expand but many of the original lines still exist today and are still a big part of the catalogue inventory. Kamprad had been canny in hiring great young designers and creating fresh looking modern furniture that appealed to almost everyone yet still remained mainly in the budget end of the market. Kamprad retired in 1986 after 43 years at the helm and became an advisor to the business. He

Companies | IKEA

patient portfolio

He is not a miser, he simply values money well spent and he has a portfolio of property


for his philanthropy and careful spending. He’s rumored to drive a 20-year-old Volvo and only ever flies economy. You may not spot him immediately in the towns around Epalinges buying Christmas ornaments and wrapping paper in the January sales and taking the salt and pepper sachets from the local cafes but that is him and he is there. He is not a miser, he simply values money well spent and he has a portfolio of property as well as many of the trappings you may expect from his billionaire status. The IKEA story on the whole is certainly an interesting one and a solid reminder that huge corporations do start from humble beginnings and if you’re lucky will blossom within the lifetime of the founder.

now lives in Switzerland and although he is one of the world’s wealthiest men he is still known


SUPERCAR SUCCESS The Pagani Zonda is one of the world's most desirable supercars, but how has this company spung up, and have they managed to out engineer Ferrari and Lamborghini? Words JASON MARLOCK

THE WORLD OF SUPERCARS IS A powerful magnet for eccentrics and thrill-seekers and if you have the cash to play with you’ll be spoilt for choice with a myriad of beautiful and spine wrenching machines. Italian supercars have been at the top of playboys’ shopping lists for decades and Ferrari, Lamborghini and Maserati have been the most sought after marques. The Italians seem to understand the need for power and beauty in the right combination and have produced some of the finest and most desirable cars. German, American and British car makers have all produced great cars, notably Aston Martin, Mercedes and even Dodge but they all lean too far one way or the other. Aston Martin and Mercedes seem to overlook the need for outrageousness whilst the Americans are obsessed with brut force. None of these cars have adorned as many boyhood bedroom walls as 74 | ELEVATOR MAGAZINE


This is a difficult market to break into and many have tried.

the Countach or F40 and for good reason. While Mercedes invest huge budgets in the finest detail and craftsmanship the Italians have a wonderful knack of making the imperfect somehow perfect like a true thoroughbred. Bugatti come close with the Veyron, but somehow the influence of VW just seems to take the edge off its flamboyance. This is a difficult market to break into and many have tried. The allure of a supercar is often in the heritage that places huge barriers to newcomers, although not impossible to overcome. Maclaren, Noble and Pagani all make truly great supercars and have held their own, but others have been less fortunate. Gumpert, makers of the mid-engined Apollo, filed for insolvency in September last year and are the latest in a long line of manufacturers with a dream of creating a 200mph+ supercar that will stand up to the best, and more importantly sell.

Companies | PAGANI


Horacio Pagani was born in 1955 in Casilda, Argentina. His father was of Italian descent and the Mediterranean flair seemed to have been passed on.

'THE NAME LEGO WAS ADOPTED IN 1934 AND IS DERIVED FROM THE DANISH LEG GODT, MEANING PLAY WELL' Pagani has stood up well and continues to create mouth-watering cars. They’ve managed to create a succession of seductive models since unveiling the Zonda C12 at the 1999 Geneva Motor Show and are elbowing their way into that top tier alongside Ferrari and Lamborghini so expect to see them appearing on teenage boys’ bedroom walls (or

more likely desktop wallpaper) very soon. In order to understand what makes Pagani a success when the likes of Gumpert ran out of runway it’s worth digging into the origins of the business and its fascinating, albeit short, history. Horacio Pagani was born in 1955 in Casilda, Argentina. His father was of Italian descent and the Mediterranean flair seemed to have been passed on as Horacio was building detailed and perfectly scaled balsa models of GT cars from as early as 12 years old, these can be seen at the showroom in Modena. By the time he was 16 he had designed and built his own Mini Moto and he still owns the bike today. At the age of 17 he had built a buggie utilizing Renault running gear and was accepted to study industrial design at the University of La Plata and went on to study mechanical Engineering at Rosaria. By the time he was 20 Pagani was ELEVATOR MAGAZINE | 75


Companies | PAGANI


By the late 1980s Pagani was trying to convince Lamborghini to invest in an autoclave.

'IT SEEMED THAT THE LONG-STANDING FAMILY OWNED BUSINESS WAS FINALLY GOING TO HAVE TO SUCCUMB TO BANKRUPTCY' already a talented and highly skilled car designer and mechanical engineer. At the age of 22 he went solo with his own consultancy and designed bar furniture, caravan trailers chairs, beds and all

manner of products, but still kept returning to his love of race cars and in 1979 he built an F2 single seater car. He finally moved to Italy during 1983 with a letter of recommendation from JM Fangio and joined Lamborghini where he worked on the team creating the Countach Evoluzione, which was the first car to be built with a fully carbon fibre frame. He fitted in well at Lamborghini and in 1986 he designed the Countach Anniversary and became an integral part of the design and build of the Diablo. Pagani had come a long way since making balsa wood cars in his early teens and was now a well respected designer and engineer at one of Italy’s finest supercar makers. By the late 1980s Pagani was trying to convince Lamborghini to invest in an autoclave so that they could further extend production of carbon fibre parts for their cars. The management team at Lamborghini had different ELEVATOR MAGAZINE | 77

ideas and felt that if Ferrari weren’t using carbon fibre then they shouldn’t either. In 1987 Pagani borrowed money to buy an autoclave and in 1991 left Lamborghini to set up Modena Designs, a company that still makes carbon fibre parts for Formula 1 cars today. It was Modena that would allow Pagani the time and facilities to develop his first car, the Zonda, and in 1992 Pagani Automobili Modena was born. In the early years Modena Designs continued to work closely with Lamborghini in the styling of the Diablo and Pagani was by no means ostracized by his former employers. He’d become an influential man in the motor industry over his career and he was soon working with the likes of Ferrari, Renault and Nissan on styling projects for both road cars and racing cars. Modena were also diversifying and working on designs for ski boots, bikes and nonmotoring products throughout the 1990s whilst 78 | ELEVATOR MAGAZINE


The Zonda was finally launched at the Geneva Motor Show in 1999 after 7 years of development.

Pagani pushed on with the development of his Zonda and made the most of his racing contacts to secure a deal with Mercedes AMG to supply engines that would make sure this car had the performance to match its looks. The Zonda was finally launched at the Geneva Motor Show in 1999 after 7 years of development and arrived with a 6 litre Mercedes AMG V12 and would accelerate to 62mph in 4.2 seconds and power on to a top speed of 215mph. It was built from carbon fibre, so had the level of strength and rigidity that couldn’t be achieved with metals. It also had killer good looks whilst never imitating Ferrari or Lamborghini. The car was hailed an immediate success and the orders began to arrive from the world’s super-rich, all willing to pay in excess of $450,000 for the privilege. Pagani had no plans to churn these cars out at any great speed, preferring

Companies | PAGANI


to take their time and fewer than 250 Zondas were built in total between 1999 and 2011. Of these 250 there were a number of special editions created to individual client specifications and these are the most sought after. Those lucky enough to have had Zondas built for them include David Heinemeier Hansson, Danish software developer and creator of Ruby on Rails (Zonda HH), Gareth Jones, Scottish gas tycoon (Zonda GJ) and Sheikh Abdullah bin Nasser Al-Thani, member of the Qatari royal family (Zonda Uno). Later cars came with higher price tags and blistering performance, the Zonda Cinque (the final iteration of the car) delivered the driver to 62mph in 3.4 seconds and only five were built with a price of almost $2m. At this stage you realize that you’re dealing with a car that would see itself on a par with racing cars and not road going Ferraris making this a genuine hypercar if ever you doubted it. Crash

one and, if you survived, you could deliver it back to the factory to have it rebuilt from the ground up, and this did happen on more than one occasion with the cost being similar to the original purchase price. In 2012 the Zonda was finally replaced by the unpronounceable Huayra. $1.3m and a great deal of patience may see you holding the keys at some point in the next few years. The top speed is over 230mph and 62mph is racked up in 3.3 seconds. Factory production, on the other hand, remains painfully slow with fewer than 20 cars being built each year. As before, Pagani’s engineers build every part of this car in-house with the exception of the Mercedes AMG engine. A deal with EA games in 2011 allowed the games maker exclusive rights to the Huayra in the gaming world for their Need for Speed franchise. Pagani retains ownership of both companies and remains true to his ideals, creating a small number if highly desirable and powerful cars with jaw dropping good looks. His personal fortune is estimated at $15m and he has seemingly resisted the urge to sell out or compromise his vision for a greater cash prize. As a result Pagani have arguably become the leading hypercar brand and been instrumental in establishing this market, stealing a march on its better-known neighbors.


Crash one and, if you survived, you could deliver it back to the factory to have it rebuilt from the ground up.


The Elevator



private equity funds hedge funds forex funds private banks family offices

The Elevator Awards PRIVATE EQUITY FUNDS And the winner is‌‌ Our team took a thorough look at private equity funds and came to the conclusion that there are a few sparkling stars you should know about.

GIVING OUT AWARDS IS NOT AN EASY THING TO DO per se. Simply because we take a certain responsibility in commending the work done in the past. A lawyer would tell you that he declines all responsibility for whatever he may or may not utter. Well we're going to go out on a limb and just proclaim our opinion alongside the votes and comments we received from our readers. We're happy to provide our perspective on the firms we've picked for this year's award. The private equity fund category is probably the most challenging because this sector is the least transparent and hence to most difficult to evaluate but we've looked as closely as we could and found the following gems that are worthy of our crown. We hope you can give them the nod of agreement, and if not please feel free to tell us why. Blackstone is a company that we studied in detail in a previous issue when our lead article was about Mr. Peterson, one of the two founders and that added to our confidence.

Awards | 2013



"Blackstone has created great wealth for its investors and has risen to stardom in the investment community. Its a name that everybody has heard and you'll hardly find anyone who doesn't respect this firm. It is for this accomplishment, amongst other criteria that we named Blackstone our winner for this year." - G. Patrick Gruhn, Editor

FOUNDED IN 1985 A S A MERGERS AND acquisitions boutique by CEO and Chairman Stephen A. Schwarzman and Peter G. Peterson, today Blackstone has over 1,700 employees in 24 offices worldwide and is one of the world's largest private equity investment firms. Through its various investment vehicles Blackstone preserves and protects $205 billion in assets for public and corporate pension funds, academic, cultural and charitable organizations. Its diverse range of funds makes private equity, real estate, credit and hedge fund investments all over the world. With a leading independent financial advisor business, handling highly complex and critical M&A, restructuring and reorganization assignments for corporate and government clients on a global scale, the company also offers fund placement services to alternative investment managers. All of its businesses reflect Blackstone’s strong partnership culture, solid foundation of intellectual capital, commitment to exceptional performance and uncompromising integrity. In June 2007, Blackstone completed its initial public offering and is listed on the New York Stock Exchange.


Awards | PRIVATE EQUITY FUNDS We didn't number our winners because they all deserve the honors and the spoils. Everyone firm has excelled in their very own way and we are pleased to present those great firm.

So besides Blackstone and without any further ado, here are our additional award winners:. Be it CVC Capital Partners, Bain Capital, Warburg Pincus or Apollo Global Management, all of these firms have it all. Experience, success and talent. They are doing the deals that you read about in the paper and they are generating great returns for investors. We commend the intellect and strategy not only on the management level but the whole of what seems to be well-oiled machines of the private equity industry.


Founded in 1981, CVC Capital Partners is one of the world’s leading private equity and investment advisory firms, today employing some 270 people throughout Europe, Asia and the US and led by 35 Partners with an average tenure of 12 years. CVC manages capital on behalf some 300 investors from North America, Europe, Asia and the Middle East and since 1996 has secured commitments of US$50 billion from investors and Credit Partners. To this day CVC Capital has invested $28 billion, with returns of 2.7 times the amount invested for an annual internal rate of return of 35.7%.


Bain Capital is one of the world's leading private, alternative asset management firms, with approximately $67 billion in assets under management, operating across eight offices on three continents. Specializing in private equity, venture capital, credit and public market investments, Bain invests across a broad range of industr y sectors and geographic regions. Since it was founded in Boston in 1984 by partners from the consulting firm Bain & Company, Bain Capital has raised 15 private equity funds including global, European and Asian-focused funds and its companies have grown their revenues by more than $105 billion globally.


Awards | 2013




Established more than 40 years ago, today Warburg Pi n c u s i s a g l o b a l l y integrated partnership led by co-presidents Charles R. Kaye and Joseph P. Landy. The firm established its first institutional fund in 1971 and over the last three decades has raised private equity funds with committed capital totaling more than $30 billion, across the consumer, industrial and services (CIS), energy, financial services, healthcare, real estate and technology, media and telecommunications (TMT) sectors.


Since its founding in 1990 by former Drexel Burnham Lambert banker Leon Black, Apollo has grown to become one of the world's largest alternative investment managers with total assets under management of $105 billion and 616 employees located in ten offices around the world. Since 1990, Apollo has developed expertise and relationships across nine industries through its private equity investment activities, the cornerstone of Apollo's investment activities - with assets under management of approximately $40 billion as of September 30, 2012.


STEPHEN A. SCHWARZMAN Schwarzman is the chairman and CEO of the Blackstone Group, a private equity firm he co-founded with former Lehman Brothers CEO and US Secretary of Commerce Peter Peterson. In this edition of The Elevator we have profiled Mr Schewarzman in great depth. Visit the profiles section of this issue to learn more.


The Elevator Awards HEDGE FUNDS Although the breed of hedge funds has been under fire since the beginning of the financial crisis in 2008, many firms are doing very well for investors and its important to show who they are.

HEDGE FUNDS HAVE QUICKLY RISEN TO SUCCESS since the concept saw the light of day - no wait, that's not really true. The idea of the hedge fund was born in the 1920s, then resurfaced at the end of the 1960s and celebrated its real breakthrough in the 1990s. That means that it took the market almost 70 years to mature the idea of making profits on rising and falling markets. For 20 years the hedge fund managers were the pop stars of the finance industry and investors flocked to this type of financial instrument but then came the fall from grace, leaving only the best funds and their managers in business (or almost). This sector is also not being spared by heightened regulations and therefore doesn't have the "carte blanche" to do as they please. The times of playing cowboys may be over but this sector still has a bright future ahead. There's still a very large number of hedge funds out there and it was challenging to pick the winners for our 2013 awards but we think we've made a good and fair cut through the masses and found some stars among the dogs.

Awards | 2013



"I read an article about the rise of hedge funds some time ago and I was surprised that nobody had thought of this type of investment strategy before. It seems logical to be able to generate profits from both falling and rising markets." - G. Patrick Gruhn, Editor

MINNESOTA-BASED GLOBAL ASSET MANAGEMENT firm Pine River Capital was founded in early 2002 by Brian Taylor, whose relative value trading experience began in the late 1980s in the Financial Markets Department at Cargill. Taylor set up the credit hedge fund with $5.3 million, and now manages over $4 billion of assets under management, along with offices in New York, San Francisco, London, Hong Kong and Beijing. Pine River pursues several strategies including global convertible bond arbitrage and equity driven event investing. At the collapse of the subprime mortgage market in 2008 Pine River launched mortgage hedge fund Pine River Fixed Income, just as the financial crisis was gathering force, and had two funds that posted 30% returns in 2012.


Awards | HEDGE FUNDS The birthplace of the hedge fund is in the United States so naturally, the best ones are likely to be found there but make no mistake, there are excellent funds in Europe as well.

Our choice for runner-ups this year falls on Appaloosa Management, Omega Advisors, Metacapital and Odey Asset Management. Clever ideas and double-digit returns have propelled these firms to the top of our list and we're confident that we've picked the right ones to highlight this year. As always, if you can share your thoughts and comments with us via Twitter @Elevatormag.


Set up by former Lehman Brothers trader Deepak Narula in 2001, Metacapital Management has become the world's most successful hedge fund. His 2008 mortgage-backed arbitrage fund Metacapital Mortgage Opportunities, which invests primarily in residential and commercial mortgages, ended 41.25% up in 2012 with $1.46 billion in assets as of Jan 1, 2013 - and the hedge fund has outperformed peers for the past two years running. Narula and others correctly bet that agencybacked mortgages owned by the much maligned Fannie Mae and Freddie Mac - were primed for a rebound.


Leading London investment firm Odey Asset Management was launched in 1991 to focus on active fund management at a time when the industry was obsessed by investment indices. Oxford graduate Crispin Odey was determined that original research and rigorous analysis should drive the investment process and was determined to keep research and judgment at the heart of the investment process. The firm now manages $7.1bn for institutional investors, private banks & individual investors across Global & European strategies, and Odey European Inc., is one of Europe’s oldest and best known hedge funds, with an AUM of $582 million.


Awards | 2013






After failing to make partner at Goldman Sachs, David Tepper left to start New Jersey-based Appaloosa Management in 1993 - a hedge fund that he co-founded with Jack Walton. The firm manages 4 accounts totaling an estimated $16 billion in assets and returned 25% last year after fees (YTD through December 17th 2012). Carnegie Mellon’s business school was named after him at the age of 55 - clearly they consider billionaire Tepper to be a worthy namesake.

Omega has approximately $6.8 billion under management, with a significant amount of personal general partner capital invested in the Omega funds. It was founded by Leon Cooperman in 1991 with $450 million in capital. As of the end of the third quarter 2012, Omega Advisors’ portfolio included 77 stocks, with a total value of almost $5 billion, and a quarter-overquarter turnover rate of 13%.



ALAN HOWARD Alan Howard was born in September 1963 and is the co-founder of Brevan Howard Asset Management LLP, a hedge fund with more than $26 billion under management. A graduate of Imperial College London, Howard began his financial career at Salomon Brothers gaining immediate notoriety by dominating the ECU eurobond market. This year saw his move to the firm's Geneva office.

The Elevator Awards FAMILY OFFICES Picking out the best family office means to pin-point the one service provider that makes you feel like you can rely on them for everything and anything. The list is long but the following companies simply stand out.

A FAMILY OFFICE BY DEFINITION AND IN THE TRUE sense is a company that manages the estate of one family. The term has been diluted and become somewhat of a fashion word in the financial industry. We've taken to the subject also with a wider perspective because its not much use to evaluate family offices who manage only one estate, because logically they wouldn't accept new clients. In that spirit we've looked at asset management firms, financial advisors and multi-family office companies to pick the best ones we could find. Its no great surprise that the winners are all in Switzerland, the place where managing money is a natural part of life. The modern family office has to be versatile, agile and 100% dedicated to the needs and wants of its clients. The firms we've picked have a responsive team of outstanding professionals who have excelled in terms of client services and performance in 2012 and we're confident that they will continue to do so.

Awards | 2013



"Family offices are vital to many of our readers and I've personally dealt with many of these companies during the last decade. There are a lot of firms that proclaim to be a family office because it sounds good but most of them don't even know what it means to really be at your client's service." - G. Patrick Gruhn, Editor

1875 Finance, which was founded in 2006, is the creation of experienced wealth management professionals and one of Geneva's illustrious banking families, the Ormond family of Geneva. In 2012, it was ranked 29th among the leading independent providers of multi-family office services worldwide by Bloomberg. 1875 Finance's in-house expertise ranges from asset management and legal and tax advisory services to client reporting, to the benefit of both private and institutional clients. Notwithstanding the various crises beginning in 2008, 1875 Finance has been able to move ahead on the strength of its innovative business model. Today, with sizable assets under management and 25 members of staff, it rates as a mainstay in the Geneva banking industry.


Awards | FAMILY OFFICES Against common belief, size doesn't matter at all when it comes to family offices. On the contrary, its often the small and nimble firms that will strive more to deliver that little extra bit of service that you need.

Experience is the single most important thing when it comes to finance, simply because its important to know every trick in the book when it comes to managing money. There are a lot of situations where the unexperienced will react too soon or too late. Only the well-seasoned manager will pull the trigger at the right time.


Swiss limited company Jasso was founded in February 1999 in Lucerne by senior partner Simon Spiess. In addition to financial services, it aims to provide clients with access to a wide range of supplementary services - including art collection management, VIP-service, property management, tax and business consultancy, as well as legal advice. As an independent Swiss financial service provider the company is independent from the banks, ensuring that its investments are completely customer-led with no conflicts of interest.


Owner-managed financial services provider Helvetic Trust specialises in the fields of wealth management, family office services, real estate and precious metals. It was founded in 2001 by Kaspar Grob and is currently wholly-owned by its 16 partners. In addition to the head office in Zurich, the company also has branches in Berne and Lausanne as well as an office in London. A Swiss company, small enough to be manageable but active on an international scale, the share capital of 1 million Swiss francs (CHF 1 million) is entirely in the hands of the active partners.


The closer you get to the road, the better you can see its beauty. Closer contact desired: at the Porsche Center Bern. The Panamera GTS.

Porsche Center Bern AMAG Automobil- und Motoren AG Hallmattstrasse 10 3018 Bern Tel. 031 985 80 80 Fax 031 985 80 70

Engine power: 316 kW (430 hp). Fuel consumption under standard conditions: combined 10,9 l/100 km. CO2 emissions: 256 g/km. CO2 average value for all vehicle models sold in Switzerland: 159 g/km. Energy efficiency category: G

The Elevator Awards PRIVATE BANKS What's the best way to evaluate a private bank? We think the most important are two factors: a solid balance sheet and skilled management and advisors. We've picked some institutions where the client is still king.

THE ART OF PRIVATE BANKING IN AN EVER changing regulatory landscape is a challenging task. Some have failed miserably and others have excelled in these trying times. When politicians try to dictate what banks can and cannot do its probably not very good for business. When every banker has to spend much of his time reporting to his legal department and compliance slows down the flow of business beyond reason, private banks are facing tough times. When banks simply can't open bank accounts for certain citizens like Germans, British or American clients - just to name a few, that's bad for business! It seems like its tough across the board and only the strongest will survive. In that spirit, we've picked a few financial institutions that have stood out with their innovation, their level of service and their motivation to take on the adversity of the current times whilst maintaining a healthy proximity with their clients and striving to continuously provide a certain level of service. One thing is for sure, when it comes to banking, bigger is not always better and there are many banks that will not serve you as well as you deserve. The ones we decided to award are certainly the best in their class.

Awards | 2013



The breed of private banks was created for a specific type of client. The wealthy, demanding individual who needs a more tailored service than a retail bank will provide. I think we've made a good pick of the best banks for the job. Part of Edmond de Rothschild Group, the Banque privée Edmond de Rothschild is exclusively dedicated to wealth management for private and institutional clients. Originally founded in 1923 under the name of Banque Privée, it was bought by Edmond Adolphe de Rothschild in the mid 1960s. The bank has 1700 employees throughout the world—in Switzerland, Bahamas, Belgium, China, Israel, Italy, Japan, Luxembourg, Monaco, Poland, Portugal, Slovakia, Spain, Taiwan, United Kingdom and Uruguay— who are dedicated to clients' needs. With affiliates, branches and representative offices spread across nearly 20 countries, the diversity means not only are they present in major financial centres but also that you can find a top-quality account manager who knows and understands your language and culture.


Awards | PRIVATE BANKS According to our readers and our editorial team, these are the institutions you can bank on. Not saying that they are the only ones out there but they have simply been found to be the best at what they do.

Julius Baer, Pictet, BNP Parisbas or Danske Bank - some of these seem like obvious choices but don't judge too fast. These institutions work very hard to earn their spot at the top and the competition is hard. Especially in current times, many banks have to re-invent themselves in order to stay in business as old business models get swept away by new regulations.


A leading Swiss private banking group, Julius Baer focuses exclusively on the demands of sophisticated private clients, family offices and external asset managers from around the world. It has the largest international presence of all Swiss private banks with over 40 locations in more than 20 countries, including a comprehensive pan-Swiss network. Switzerland and Asia are the group’s two home markets, with the head office located in Zurich. Group shares are listed on the SIX Swiss Exchange and form part of the Swiss Market Index (SMI) of the 20 largest and most liquid Swiss stocks.


Since it was founded in Geneva in 1805, Pictet & Cie has focused solely on managing the wealth of private and institutional investors. Over more than two hundred years, Pictet & Cie has witnessed revolution at its gate, lived through the Depression and weathered many stock market crashes, but it has also experienced periods of headlong growth and speculative bubbles. Today it is one of Switzerland's largest private banks, with assets under management and custody totalling USD 397 billion (CHF 373 billion / EUR 309 billion) at the end of September 2012.


Awards | 2013





Formed through the merger of Banque Nationale de Paris and Paribas in 2000, French global banking group, BNP Paribas, is is a leader in banking and financial services in Europe. The Group is present in 80 countries, and employs close to 200,000 people, half of which are based in its four domestic markets: Belgium, France, Italy and Luxembourg.

The International Financing Review 2012 Bank of the Year, Danske Bank Group is the largest bank in Denmark and a leading player in the northern European financial markets. With more than 5 million retail customers and a significant share of the corporate and institutional markets, the group focuses on retail banking by offering a wide range of financial services including insurance, mortgage finance, asset management, brokerage, real estate and leasing services.



CHRISTOPHE DE BACKER Christophe de Backer succeeded Claude Messulam as CEO at the Edmond de Rothschild Group on February 1, 2012. He previously served on HSBC's Executive Committee and was the CEO of HSBC France. Under his guidance the bank continues to grow its wealth management business, with particular emphasis on asset management and expanding its global presence.

The Elevator Awards FOREX FUNDS Picking out the best family office means to pin-point the one service provider that makes you feel like you can rely on them for everything and anything. The list is long but the following companies simply stand out.

A FAMILY OFFICE BY DEFINITION AND IN THE TRUE sense is a company that manages the estate of one family. The term has been diluted and become somewhat of a fashion word in the financial industry. We've taken to the subject also with a wider perspective because its not much use to evaluate family offices who manage only one estate, because logically they wouldn't accept new clients. In that spirit we've looked at asset management firms, financial advisors and multi-family office companies to pick the best ones we could find. Its no great surprise that the winners are all in Switzerland, the place where managing money is a natural part of life. The modern family office has to be versatile, agile and 100% dedicated to the needs and wants of its clients. The firms we've picked have a responsive team of outstanding professionals who have excelled in terms of client services and performance in 2012 and we're confident that they will continue to do so.

Awards | 2013



"Family offices are vital to many of our readers and I've personally dealt with many of these companies during the last decade. There are a lot of firms that proclaim to be a family office because it sounds good but most of them don't even know what it means to really be at your client's service." - G. Patrick Gruhn, Editor

In a marketplace that is becoming ever more investment-led and performance-driven, Capricorn Strategies was established to provide unique investment advisory services. Supervised by the Danish financial authorities, Capricorn has assembled a team of investment professionals with a deep understanding of investing in the G-10 currency universe. The FX G10 fund seeks risk-adjusted returns, that are uncorrelated to other investment strategies by trading the most liquid assets available to investors, the currency majors. Its strategy is long term, fundamental seeking alpha opportunities in most market conditions by benefiting from currency arbitrage and exchange rate differentials. The fund utilises currency forwards with a directional bias in the “carry� component of the strategy. Risk is tightly controlled via a dynamic hedging strategy aimed at reducing the exchange rate risk.


Awards | FOREX FUNDS Against common belief, size doesn't matter at all when it comes to family offices. On the contrary, its often the small and nimble firms that will strive more to deliver that little extra bit of service that you need.

Experience is the single most important thing when it comes to finance, simply because its important to know every trick in the book when it comes to managing money. There are a lot of situations where the unexperienced will react too soon or too late. Only the well-seasoned manager will pull the trigger at the right time.


Founded in 1981, FX Concepts is a global leader in technical analysis and quantitative research for Foreign Exchange and Interest rate markets. FX Concepts supplies traders world wide with precise commentary and trading strategies, using methodology that incorporates 3 core analytical techniques: Cycles analysis, Gann inspired technical analysis and quantitative trading models - three tools that enable FX Concepts to identify the appropriate time, the appropriate level and the appropriate trading strategy.


Axel Merk founded Merk Investments in Switzerland in 1994 by pooling the investments he had been managing for his friends since college. He relocated the business to California in 2001, and Merk Investments became an SEC-registered investment advisory firm. The Merk Currency Enhanced U.S. Equity Fund combines U.S. equities with exposure to currencies, seeking to generate total returns. The Fund actively manages U.S. dollar and other currency risk while concurrently providing investment exposure to the S&P 500. The combination of U.S. equities and international currencies may bring portfolio benefits similar to adding non-US equity exposure.


Jasso has worked hand in hand with its clients, taking the idea of independent advisory to a new level. We have enhanced our asset management activity with the conception and recommendation of tailor-made products. Today Jasso acts as a unique point of reference for the implementation of complete asset management solutions.

Sternmattstrasse 12B P. O. Box 4067 CH-6000 Lucerne 4 Tel. +41 41 310 88 78 Fax +41 41 310 88 80


IT IS TIME TO LOOK BEYOND THE OBVIOUS? When church bells are stolen for scrap metal, you know commodities are still in demand. But what's going to further your cause and what will stall your portfolio in 2013? Words IAIN NORTHHAM

I’VE JUST BEEN WATCHING STEEN Jakobsen, Saxo Bank’s chief economist, give his predictions on the commodities market for the forthcoming year. Jakobsen has often made some extreme predictions (most of which have fortunately missed the mark) but regardless I do think he talks sense and we all need extremes to give us a balanced view. One of his wildest predictions for this year (and I may need to eat my words by December) is the fall in WTI crude prices to $50 as a result of overproduction in the US and the shale gas effect. At the time of writing crude is trading at $92.85 and it would take a serious set of circumstances to wipe 45% off the prices, bear in mind also that the Saudis need $85+ in order to keep their balances in check. The point to take from this is that there may well be a fall in crude oil but few agree that we will see anything so significant. Credit Suisse lowered its 104 | ELEVATOR MAGAZINE


The Saudis need $85+ in order to keep their balances in check

average price forecasts for WTI from $106 down to $102.75 at the beginning of January whilst leaving its forecast for Brent crude static at $115 as a year long average with a start price of $110 signifying their belief that we will see a slow rise over the summer months. Credit Suisse are not alone in trimming their forecasts and Caroline Bain at Economist Intelligence Unit offers a similar sentiment; “Our analysis of supply and demand in 2013 suggests the oil market will be in comfortable surplus next year (barring an unforeseen disruption to supply) and thus we expect prices to fall back.” Gold prices have been creeping upwards slowly starting at $1598 an ounce in January 2012 to a close price of $1655 at the end of the year, peaking at $1787 in October. HSBC has cut its forecasts on gold for 2013 from an average of $1850 down to $1775, whilst predicting a fall in value to $1625 in 2015. Senior

Asset Management | COMMODITIES

'CREDIT SUISSE LOWERED ITS AVERAGE PRICE FORECASTS FOR WTI FROM $106 DOWN TO $102.75 AT THE BEGINNING OF JANUARY' market strategist Bill Baruch at is bucking the predictions trend and in an interview for Bloomberg in New York he has said; “I think

this is going to be a great buying opportunity going forward for 2013. I have huge expectations. I think Quarter 1 we're going to see the market test $1,800.” He went further to say; "I want to see this market get above $1700. If it gets above 1700, I think the momentum will come and people will be buying as the market moves." HSBC analyst James Steel said in a note to HSBC clients; “Macro fund liquidation and uncertainty over the impact of the US fiscal cliff led traditional gold investors to shift out of bullion and move to side-lines in late 2012.” Credit Suisse have followed suit and lowered their forecast prices from $1840 to $1740 showing a similar trend in expectations from analysts of a fairly static market for gold; “Gold prices rallied strongly on two occasions during 2012 only to subsequently give back most of the gains”, said Tom Kendall, analyst at Credit Suisse. The


Gold prices have been creeping upwards slowly starting at $1598 an ounce in January 2012 to a close price of $1655


bank is increasing its forecasts for other base metals including copper, lead, zinc and tin; “We expect the copper rally to continue in the short run, driven by improving real demand, increased appetite from investors and restocking in the US and Europe.” The bank has increased its copper forecasts from $8,000 per tonne to $8,113 whilst commenting that they felt copper is still in surplus and forecasts will see a settling. The wild card for commodities trading could well come in the shape of coffee beans. We’ve seen a fall of over 50% in coffee prices since 2010. Prices appear to be on a downward trend but looking to bottom out as the bigger money is building a long position and larger farmers hold stock pending price rises. Palm oil is poised to rise in value as stocks are depleted and demand increases. Other agri commodities have a flatter outlook, particularly 106 | ELEVATOR MAGAZINE


Feel the need to trade ‘off-piste’? Then perhaps the answers lie in the stars...

grain, despite the sub-optimal crops last year with wheat and corn having both been widely tipped for falls of 20%-25%. Luke Chandler, Global Head of Rabobank’s Agri Commodity Markets Research (ACMR) department offers his thoughts; “Weak global economic growth and continued macro uncertainty may cause a slight drag on demand for agricultural commodities in 2013; however, a low US dollar will provide support for prices. Speculative money flows will also remain very sensitive to macro uncertainties with the risk-on/risk-off trading pattern of 2012 likely to continue. Using the S&P Agri Index as a proxy for our commodity forecasts, we expect a decline in agricultural prices of around 10% between Q1 and Q4 of 2013.” If you’re tired of listening to play-safe predictions and feel the need to trade ‘off-piste’ then perhaps

Asset Management | COMMODITIES


We’ve seen a fall of over 50% in coffee prices...


'MACRO UNCERTAINTY MAY CAUSE A SLIGHT DRAG ON DEMAND' the answers lie in the stars. Col Ajay Jain, astrologist and commodities analyst offers his own suggestions for you; “2013 is represented by Planet Venus which should provide support to silver, zinc and copper. Therefore movement of Venus helps us to know the advance movement of base metal and bullion. It is important to note that Venus is known for highest volatility. Combination of Venus with Saturn is positive while combination Venus with Mars is dangerous for commodity market. Our advance predictions for positive movement for

copper and crude oil proved correct. While majority of commodity experts were expecting downward movement in copper and crude oil I had predicted well in advance for positive for copper and crude oil.” Jain also goes on to recommend you also consult your financial astrologist before making any large financial commitment. Sage advice but I may stick to more conventional methods myself. The overall consensus from the banking analysts seems to be consistent this year with grains trading flat, metals likely to underperform on the whole and the big movers likely to be coffee, palm oil and cotton barring any middle eastern oil crises.


WHAT'S IN THE PAPER? Which horse does the smart money back in 2013? There are interesting plays ahead as the global economy continues to slowly recover. Words RICHARD TREATY

A NEW YEAR SIGNALS A NEW PLAYING field in the FX markets with many predicting a weaker JPY. Two years of trade deficit and a continued strong performance from the yen no longer stacks up. The Bank of Japan has been busy printing money and a current account surplus is turning into a deficit. The Wall Street Journal recently reported that the seasonally adjusted current account was in deficit in September for the first time in more than thirty years. The sudden surprise drop has some economists warning that Japan’s ability to generate wealth is eroding faster than expected and its fiscal situation could be more fragile than many thought. Data for December shows that Japan still retains a current account surplus although this fell 30% year on year. There seems to be heated debate between political leaders and the Bank of Japan in terms of how to address 108 | ELEVATOR MAGAZINE


Two years of trade deficit and a continued strong performance from the yen no longer stacks up.

this problem of deflation with the preferred solution being to print more money and buy foreign currency bonds in order to create a selling pressure in the FX markets and thus weaken the yen. The market will catch on quickly and jump on a sure thing making the Yen look like the best table in the casino. Closer to home the GBP has also remained surprisingly strong, although it’s anticipated that further quantitative easing by the UK government will lead to a weakening of sterling later in the year. The outlook for the UK economy is weak with predicted slow growth but there are some concerns here particularly in the trade balance and current account deficit, which reached record levels in Q2 2012 of over 5% of GDP. Underneath all of this it’s apparent that there are structural problems with the economy that don’t stack up and the Bank of England may need to look at weakening sterling in

Asset Management | CURRENCIES


We see an interesting outlook in Scandinavia with the SEK, NOK and DKK all looking more predictable


'DATA FOR DECEMBER SHOWS THAT JAPAN STILL RETAINS A CURRENT ACCOUNT SURPLUS ALTHOUGH THIS FELL 30% YEAR ON YEAR' order to address trade deficits. In northern Europe we see an interesting outlook in Scandinavia with the SEK, NOK and DKK all looking more predictable. The Swedish krona has

been relatively flat recently and the domestic outlook is weak with slow or marginal growth anticipated in Q1 and Q2. Inflation is likely to be static at 0% or below and we’re expecting pressure on Riksbank to return to SEB official repo rate forecast at 0.75% in Q1 in order to stimulate growth. Norway has a stronger fiscal position and is favored for the medium term and the NOK has been seen as something of a port in a storm with many traders. In Denmark the DKK is likely to stay on the right side of parity as a healthy current account surplus, steady interest rates and the government continuing to make Danish bonds attractive all combine to create a steady ship for DKK. The Euro is still facing a challenging time and political uncertainties in Europe and a period of necessary stabilization could well result in further ECB rate cuts. There has been a resistance to ELEVATOR MAGAZINE | 109

borrowing from private households and business despite interest rate cuts and the ECB is likely to hold interest rates in the hope that more readily available credit will cause stimulation. With general elections in Germany and Italy during this year there is some skepticism as to whether the IMF prediction of a EU current account surplus of 1.3% can stand up in 2013. Across the Atlantic the USD is expected to pick up following the expected fiscal cliff agreements between the President and Congress. With the economy walking a fine line between stability and recession it seems highly unlikely that the two sides will not cooperate fully as the consequences are inconceivable. Any political agreement is expected to come with a solid long-term program based on spending cuts and higher taxes to reduce the public deficit, which in term could have a negative effect on 110 | ELEVATOR MAGAZINE

'THE USD IS EXPECTED TO PICK UP FOLLOWING THE EXPECTED FISCAL CLIFF AGREEMENTS' the position of the USD in the medium term. Many feel that the weak outlook in the Euro-zone will help support the USD but anticipate a continued low scoring against other currencies. Asia is generally favored for those looking towards a long position, particularly with MYR and CNY that are set for slow appreciation offset with a hedged short KWR position. Malaysian elections are expected in Q2 and no one is expecting any change in leadership since Prime Minister Najib’s budget in September 2012 was warmly received by

Asset Management | CURRENCIES


We’ll see a faster increase in mobile trading and percentage volumes will increase greatly.


many for its tax cuts and benefits for lower income households. A continuation of term would allow Najib to plough on with his liberalization reforms in the equity markets. CNY is likely to move to a wider daily trading band of +/- 1.5% from the existing +/- 1% and USDCNY could end the year lower than previously thought. Korea is the wild card here and is seen as an under-valued currency and has been less volatile than other Asian currencies. The cyclical recovery in Europe, US and elsewhere will help Korea as an exporter and a gradual dove downwards in USDKWR is expected during Q3 and Q4. Michael Greenberg of Forex Magnates recently shared some useful overview predictions, two of which were certainly worth further consideration: We’ll see a faster increase in mobile trading and percentage volumes will increase greatly. The

advent of technology and how it affects FX trades will doubtless make markets more nimble. The larger FX brokers will continue to grow in the US whilst we see a reduction in numbers of smaller brokers and the reverse is likely to be the case in Europe. Once again this could affect the way FX traders operate in general and is worth watching It’s likely to be a less volatile year in the FX markets with a settling period anticipated for EUR and USD. The hotspots are likely to appear in Asia and around emerging markets, but with so many potential pitfalls for Europe and US it’s likely to be a game of devaluation as trade deficits are tackled.


THE BEST RETURN ISN'T ALWAYS IN THE BANK Alternative Investments have often outperformed the traditional markets but as you think outside the box, its a fine line between great success and utter failure. Words ALEX MEYERS

DEBATES ON WHETHER ARTWORKS ARE an asset or an investment continue and often luck plays a key part for investors. Buying art purely from the perspective of making a good return is a speculative and subjective business and takes steady nerves. The opposing view that artworks should be seen as an asset may be a more stable approach and buying art that can be enjoyed firstly is the safest bet for those with the liquid cash to play as well as appreciate (in both senses of the word), but bear in mind ownership also comes with associated costs and responsibilities. The big name pop artists appear to be losing value recently. In 2008 one of Warhol’s Eight Elvises was sold privately for a reported sum of $100m whilst 4 years later a Double Elvis was sold for $37m, falling $13m short of its expected auction price of $50m at Sotheby’s. The art world is vast and complex and 112 | ELEVATOR MAGAZINE


The big name pop artists appear to be losing value recently.

where there are losers you can also find winners, such is the fickle nature of a subjective market. From a pure investment perspective there are many art funds ready to cater for your appetite should you prefer not to own, store and insure valuable pieces. The Mei Moses Art Index tracks the prices of major artwork at auction and has outperformed the S&P 500 index for the last 4 years, but bear in mind this is for well known and high value artworks rather than the entire market. There are plenty of art funds to choose from in alternative asset management and this sector has been fine tuned considerably since the collapse of several funds in 2008. The Fine Art Fund is the most prominent and has been successfully operating since 2001 and closed its first fund in 2004 with value increases averaging 20% year on year since and seeing many competitors come and



Those more interested in the fun of finding the next Tracy Emin or Chris Ofili will find no short cuts or trade secrets


'THE MEI MOSES ART INDEX TRACKS THE PRICES OF MAJOR ARTWORK AT AUCTION AND HAS OUTPERFORMED THE S&P 500 INDEX FOR THE LAST 4 YEARS' go. Prior to 2008 many of these funds were operated by art experts, as opposed to fund managers, and

as such were poorly structured and over-exposed. The landscape is different now with specialist funds emerging from within this specialist area to cater for Russian, Brazilian and Chinese artwork in particular, all of which remain hot areas for potential earnings. Beware fee structures for specialist art funds, as these often need to incorporate high security, specialist storage and costly insurance policies. Those more interested in the fun of finding the next Tracey Emin or Chris Ofili will find no short cuts or trade secrets. Following the major collectors and galleries is unlikely to find you a hidden gem and you may have more success hunting through the graduate shows and honing your sharp eye. Be prepared to put in the hours and the searching could well pay off, but this is a hit and miss game. Experts often suggest looking wider at photography and ELEVATOR MAGAZINE | 113

sculpture, away from the well-beaten track. The present day established names have not been performing well, in particular those contemporary darlings Hirst and Banksy with both names seeing a dive in value over the last 3 years. The days of packed auction houses waiting to compete for a piece of Damien Hirst are over and the bubble has well and truly burst. Marion Maneker of the Art Monitor warned of the unsustainability of the contemporary art market in an article for Spear’s WMS in 2008 ‘The Hirst is yet to come’ by Ivan Lindsay http://bit. ly/XOqEgH and despite continued climbing values for the following 2-3 years we’ve seen a cascading spiral in the last year with auction houses and private galleries now becoming flooded as many rush to offload. Old masters have always seemed to be a safe haven of sorts and prices continue to rise steadily in 114 | ELEVATOR MAGAZINE


A tale of caution from The Art Newspaper shows how easy it is to depreciate your asset

this area. Supply is understandably limited, giving a feeling of security to those with more frayed nerves, and this is the least volatile of sectors. Like most assets these old masters took a dip in value in 2009 but recovered in a spike at equal speed and are still climbing in value recovering entirely by 2011, provided you have the right old master, of course, and by that I mean museum-quality work, which doesn’t surface often. If you’re lucky enough to have $40m+ floating around then you may find yourself a few treasures, but lay away for the unexpected if you’re planning to buy and hang at home to impress your friends. A tale of caution from The Art Newspaper shows how easy it is to depreciate your asset with news that a visitor to Tate Modern accidentally leant against a Miro (loaned to Tate at the time) and cost of repairs and depreciation were valued at over $300k I’m fairly



Freshly minted Russian and Chinese billionaires have been searching the globe


confident that I’d be nervously following anyone in my house if I were lucky enough to have a Miro dangling over my study desk. For many lower level speculators looking for some pleasure as well as some gain then the print and lithograph market could be the proverbial flea market you’re looking for. As a novice I’d recommend you get stuck in and you’ll learn quickly on a safer footing. There’s a great deal of value in novelty and nostalgia and you can own a piece of Hockney, or even Picasso for comfortably less than $5,000, albeit a signed and numbered edition. You can easily find a Paolozzi or Hamilton print in great condition for hundreds of dollars without any risk of huge depreciation of damage insurance. Folk art and cartoons are becoming increasingly sought after and if they’re to your taste then buy them up, rotate them on your walls and fill the attic in the hope of one day

realizing you picked a winner. What we’ve seen most clearly in recent years is art from emerging economies offering some fantastic returns. Freshly minted Russian and Chinese billionaires have been searching the globe for their own old masters in order to buy them up and take them back to their rightful place. Maybe it’s not the art experts who will be the best judge and perhaps the economists with an eye for rapidly emerging economies are best positioned to pick the next winner so watch the value of Brazilian artists climb over the next few years as Brazil takes an economic booster. FURTHER INFORMATION ALEX IS A COLLECTOR AND ADVISOR TO ARAGOMA, THE ART SALES SITE WEB: ARAGOMA.COM (COMING SUMMER '13) ELEVATOR MAGAZINE | 115

UP, UP AND AWAY! The stock markets of the world have been overly volatile for several years and investors have their guard up. What's in store for 2013? Words LORAINE YATES

A REVIEW OF THE STOCK MARKETS during 2012 makes for surprising reading and a glint of good news. Factor in the stalling US economy and a presidential election, the European debt crisis and a fiscal deadlock in Washington and you’d have expected a weak stock performance overall. Despite this we saw annual gains on the Dow Jones of 7%, the S&P was up 13% on the year and Nasdaq showed gains of 16%. There were some notable performers (Apple and Bank of America) and some high profile IPOs with Facebook’s initial public offering at $38 falling sharply to $17.73 before recovering ground to a close of $26.62 at the end of the year. The EU bailout of Spanish banks in the summer instilled investor confidence in Europe as the EU clearly signaled that it would take whatever steps necessary to protect the union. The Federal Reserve played its part by starting the third round of its bond purchase 116 | ELEVATOR MAGAZINE


There’s a division in opinion over predictions for 2013, as there always is at the beginning of a new year.

program in order to drive down interest rates and encourage investment and borrowing. The volatility we’ve experienced in recent years is likely to remain throughout 2013 and investors will need to accept this and use it to their advantage. As Warren Buffet so astutely suggested, there are two types of experts when it comes to stock market predictions; those who don’t know and those who don’t know they don’t know. There’s a division in opinion over predictions for 2013, as there always is at the beginning of a new year. The general consensus falls into two distinct camps; those who believe the year will be flat and those who are predicting increases similar to those seen in 2012. A recent survey by Populus in the UK showed high levels of confidence in the wealthier demographic offset by a more gloomy outlook from the less affluent. Overall confidence in the major

Asset Management | STOCKS


PulteGroup (PHM) was the strongest performer on the S&P 500 at +187.80% followed by Sprint Nextel (S) at +142.31% THIS IS A CAPTION THIS IS A CAPTION THIS IS A CAPTION

'AFRICA IS BEING WIDELY TIPPED AS A POTENTIAL PERFORMER, IN PARTICULAR KENYA AND NIGERIA' western economies is still low but there are always gains to be identified for the savvy investor. The largest stock market gains during 2012 have been seen in the smaller economies with Venezuela showing the largest increase at 295% and strong

performances in Egypt EGX30 and Istanbul, both at +57%. The Far East showed gains despite a growth slowdown in China and the Philippine Exchange gave an overall 36% return on the year. We are likely to see a similar pattern emerging this year and Africa is being widely tipped as a potential performer, in particular Kenya and Nigeria. It’s also worth looking east to India as the government begins to strip out foreign investment barriers in an attempt to speed up growth. The big winners for 2012 were Bank of America (NYSE:BAC) showing an increase of 108.63% and the best of any stock in the Dow Jones industrial average. PulteGroup (PHM) was the strongest performer on the S&P 500 at +187.80% followed by Sprint Nextel (S) at +142.31% and Whirlpool (WHR) at +114.44%. At the other end of the scale Hewlett-Packard (NYSE:HPQ) had a dismal year ELEVATOR MAGAZINE | 117

at -44.68% with retailers Best Buy (BBY) showing -49.29% and J.C. Penney (JCP) falling -43.93%. At the end of the year nine out of ten of the S&P index sectors showed gains with finance leading the way posting an increase of +26%. The underperformer was utilities, ending the year down -1.8% overall. Health stocks have looked attractive having increased +16% and are being widely tipped as one to watch alongside consumer-discretionary stocks. The overall view is that we are likely to see a slow and steady growth period and John Carey, Executive VP at Pioneer Investments is cautiously optimistic. “We’ve had good economic numbers, earnings are holding up, dividends are attractive and balance sheets are solid. That would tend to point to another year of moderate growth and a fairly good environment for stocks.” 118 | ELEVATOR MAGAZINE


We’ve had good economic numbers, earnings are holding up, dividends are attractive and balance sheets are solid

'THE OVERALL VIEW IS THAT WE ARE LIKELY TO SEE A SLOW AND STEADY GROWTH PERIOD' Douglas Blake, Senior Wealth Manager, Newbridge Securities suggests that the financial sector is primed for above average returns yet again. “The financials are the lifeblood of the US economy and therefore the stock market. In 2011 this was the worst performing sector and in 2012 they were the best performers. Seeing this sector perk up suggests that the future is brighter for the US economy.” Other analysts feel that this optimism is

Asset Management | STOCKS


A buy and hold strategy during 2013 could pay off for those with the means and liquidity


unfounded and history demonstrates that we see an average 8% increase in stock prices during a US election year, followed by an average gain of 4% during the first year of the presidential term. Although past results and historical data is by no means an accurate indicator of what will happen next we can expect these consistent cycles to have some impact on performance. A recent report from John Hancock Mutual Funds confirms that the stock market shows small gains in the first two years of a presidential term whilst showing more substantial gains during the second half of the term. This suggests that a buy and hold strategy during 2013 could pay off for those with the means and liquidity. Another useful indicator of what to expect is the Santa Claus rally, which is often an accurate predictor of the forthcoming year. Yale Hirsch of

The Stock Trader’s Almanac studied the last five trading days plus the first two of the New Year for each year since 1950. He found that the this seven day Santa Claus rally period has averaged a 1.5% gain in stock prices and this average can be used as a good sign of expected performance. If the Santa Claus rally doesn’t materialize then the year often turns out to be bearish. If you’re looking for the safest course than banking on the banks seems to be most widely tipped but those with the most sizeable cash balances are seemingly also looking towards healthcare. Happy hunting with whatever path you choose this year.


IF YOU CLOSE A DOOR, A WINDOW OPENS? The financial landscape is rapidly changing! Bankers and clients are feeling the pinch with the rope of regulation tightening around everyone's necks. Words ROBERT HOSKINS

CHANGES IN LAW SURROUNDING HOW the asset management industry is regulated in Switzerland have been causing something of a stir recently. Although not unexpected the far-reaching consequences have left many hedge funds, in particular, pondering their need to operate from the Swiss safe-haven. The overall (public facing) consensus from these hedge funds has been “Regulation is necessary, but difficult to get right”. Read this as “This could be crippling but let’s put on a brave face before we pack our bags”. The old ‘light touch’ days appear to be over and the regulations are likely to drive out many of the smaller operations that will see the new status quo as being untenable. Regulations from the EU such as Markets in Financial Instruments Directive (MiFID), European Market Infrastructure Regulation (EMIR) and the Alternative Investment Fund 120 | ELEVATOR MAGAZINE


The changes already put in place during 2012 are only the beginning and the next 2 years will bring a continued overhaul

Management Directive (AIFMD) will also affect Switzerland’s position. Add to this increasing pressure from the US to prosecute banks helping Americans evade taxes and the growing discontentment from the Swiss people and change is inevitable. Switzerland is finding it impossible to operate as an island in Europe any longer as Sindy Schmiegel from the Swiss Banking Association points out, “Switzerland is not an island in the universe of banking. We have an interconnected banking center and it is quite obvious that these developments have an influence on Switzerland.” The changes already put in place during 2012 are only the beginning and the next two years will bring a continued overhaul of the regulatory industry which will doubtless have a quieting effect on towns like Pfaffikon, nestled on the shores of Lake Zurich and decorated with polished brass nameplates on

Asset Management | NEW REGULATIONS

too much too soon

A large proportion of asset managers based in Switzerland will now operate under supervision of FINMA


'SWITZERLAND IS NOT AN ISLAND IN THE UNIVERSE OF BANKING' the doors of countless fund management offices in residence. September brought further amendments to the Act on Collective Investments (CISA) with a resounding parliamentary majority. The act was originally adopted in 2006 in order to bring Swiss legislation in line with EU UCITS rules. This round of amendments includes the distribution, custody and management of funds, more specifically affecting local and foreign collective investment schemes based in the country. This overhaul is only

the first of many phases likely to stretch over the next two years and for much of the expat financial community it’s too much too soon, not allowing time to adapt and conform with many feeling as though the intention is not just to clean up but to squeeze out the industry. A large proportion of asset managers based in Switzerland will now operate under supervision of FINMA and it’s tightening regulations and as of 2014 asset managers of Swiss pension funds must work within the supervision of and be licensed by FINMA. The resident finance operations may be feeling under pressure and questioning whether operating here is still viable, but by the same token pressure on the government from citizens and from the US and European neighbors has put an uncomfortable spotlight on the Swiss government and inaction on their part was implausible. Christian Sougel ELEVATOR MAGAZINE | 121

of Ernst & Young commented “A colleague who runs a $500m fund did an assessment and came to the conclusion that they would not be profitable when these rules come into place.” This sentiment is echoed by Andre Keijsers of Gottex Asset Management, “…it adds significantly to your cost base and required staff skills, which can be particularly difficult for small players.” Patrick Odler, Chairman of the Swiss Bankers Association has called for a period of debate between politicians, bankers, regulators and academics in order to find a more workable solution that would suit all parties. He went on to say, “ The regulatory environment is in constant flux. A constructive dialog and improved coordination is now more important than ever to overcome challenges and to develop balanced regulations that stabilize the financial system, but also maintains the 122 | ELEVATOR MAGAZINE

costly changes

It adds significantly to your cost base and required staff skills

competitiveness of the financial sector. Regulations should not only be enforced, but also endorsed.” But there’s a fierce resistance to this from domestic and foreign politicians who believe strongly that the financial industry cannot be trusted to self regulate or steer policy as this method has proved catastrophic in the past. But who’s right, if anyone? Surely finding a middle ground is vital and without the participation of the central banks it seems implausible and without a counter discussion or debate it seems unlikely that the conclusion will be satisfactory for anyone in the longer term. The key influence factor facing the Swiss government is pressure from its European neighbors and the US. The collapse of Lehman Brothers and the ensuing squeeze on liquidity placed an uncomfortable spotlight on Switzerland as economists and regulators around the world

Asset Management | NEW REGULATIONS


The Federal Council is stepping up its efforts to combat abuses in the area of money laundering and taxation.

began investigating paper trails only to find evidence of large scale money laundering and tax evasion. The Swiss Federal Department of Finance (FDF) recently issued statements of its intentions including further measures to boost the competitiveness of the financial center and combat abuses in a more targeted manner. They went on to state, “The Federal Council is stepping up its efforts to combat abuses in the area of money laundering and taxation. By swiftly implementing the revised Recommendations of the Financial Action Task Force (FATF), Switzerland is emphasizing that it attaches high priority to the obligations it assumes through its international commitments. Serious tax offences will now be punishable also under the heading of money laundering. In the event that they suspect serious tax offences, financial intermediaries must report these cases to the

Money Laundering Reporting Office Switzerland.� The impact on the wider Swiss economy is a real concern and politicians and regulators appear to be in a tight spot with no easy escape. The advent of tightening regulations could well bring with it criminal prosecutions for individuals deemed to be protecting their clients activities and this will doubtless be a very real concern for many who could potential face not only fines but custodial sentencing for previous malpractice. Whether the steamroller of regulation continues unabated or whether the Swiss Bankers Association and others can convince regulators that cooperation and compromise will find the best solution remains to be seen. FURTHER INFORMATION WEB: EFD.ADMIN.CH WEB: FINMA.CH ELEVATOR MAGAZINE | 123


THE BEST OF ROBOTICS Robots aren't quite ready to overthrow us humans - for the time being, we're safe. But just what can our mechanical friends get up to these days? We have a look at the current crop of popular robots.


3D ROBOTICS In an age where digital manufacturing 1 technology and open-source design are rapidly revolutionising product creation, could it be that we’re about to witness the transition of a million garage-based tinkerers into commercially astute entrepreneurs? And what will happen when they’re unleashed, on masse, into our global marketplace? Chris Anderson, for one, will be at the forefront of the revolution, and is keeping a keen eye on proceedings. Former Technology Editor at The Economist and subsequently Editor-

Bright Ideas | ROBOTICS

in-Chief at Wired magazine, Anderson is one of the leading entrepreneurs in the Robotics industry and a steadfast evangelist of the ‘Maker Movement’, which is set to sweep the US and beyond. In his new book, Makers: The New Industrial Revolution, Anderson discusses the rise of 3D printers and industrial outsourcing. He believes the global supply chain is about to be rebalanced - and that the Web Revolution, distributed sharing, and cheaper manufacturing technologies will open up new growth in the somewhat-dormant manufacturing sector. Eventually, he believes, rather than a handful of individuals, it will be a community of makers who will be driving the course for innovation. He’s been busy putting his ideals into action. In November 2012, Anderson became the full-time CEO of 3D Robotics Inc., a company he co-founded in 2009. He then closed a $5+ million funding round and looks set to accelerate the growth of 3DR with planned expansion into new markets. In his 3DR weblog, Anderson writes: “The aim of this ramp-up is simple: more cool stuff and a great customer and community experience. As part of this, we’ll be launching a new 3D Robotics site/store, new product sites, manuals and tech support communities and an expanded customer support team. And of course a wave of exciting new products, focused on making drones and other aerial robotics technology easier, more powerful and cheaper than ever before.” With Anderson’s attestation that the current state of desktop 3D printers is roughly where Apple was when it issued its first Laser Writer, you can't help but think forward a decade or so and imagine where 3D printing technology has the potential to lead us.

MAKERBOT Brooklyn-based start-up 2 Makerbot is challenging the way we think about manufacturing. Founded in 2009, MakerBot had 16% market share of all 3D printers (industrial and personal) made from 2009 to the end of 2011. By 2011, the firm had achieved 21.6% market share and was a world leader in the rapidly emerging field. Last year the company, led by CEO Bre Pettis, opened it’s first retail location in the trendy NoHo neighbourhood of Manhattan. Makerbot produces desktop 3D printers that have the power to transform digital designs into actual, physical objects – toys, keyrings, machine parts - democratizing the tools of production and enabling everyone to become a producer. Astoundingly, more than 28,000 projects, models, and objects are available that can be downloaded and printed at the touch of a button - and the potential is vast. Actual build volume started small but is expanding; the latest printer has a volume of 410 cubic inches (11.2” L x 6.0” W x 6.1” H). Pettis said of their newest printer; “With our fourth generation product, we

have made the best desktop 3D printer on the market, made it affordable to both professionals and hobbyists, and made it cool looking”. Priced at just $1,749, MakerBot is aiming for a middle ground market rather than concentrating on highperformance printers that cost upwards of $100,000. Understandably, the concept of 3D printing was a hot topic this year within the design world at this year’s Salone Internazionale del Mobile in Milan. With digital manufacturing technology reviving the Maker movement in America, today there are far more accessible and cheaper options through which we can control the interface between digits and atoms.


ASIMO What stands 4 foot 3 3 inches tall, weighs 119 lbs, walks red carpets at film premieres and makes guest appearances at the leading science museums and academic institutions all over the world? The answer is ASIMO - the most advanced humanoid robot ever created. Developed by Honda, ASIMO (which stands for ‘Advanced Step in Innovative Mobility’) was one of many robotic prototypes created by the firm throughout the 1980's, but became by far the most famous as a result of "predicted movement control", which allowed for surprisingly human-like motion. With 34 different degrees of freedom throughout


his body, the crucial solution to maintaining his balance appeared when Honda researched a motorised unicycle idea and applied the same principles. It hasn't all been a walk in the park for our diminutive hero, however. A constantly evolving project, ASIMO recovered from a disastrous fall at a demonstration in Tokyo in 2006 to display the ability to sense and react to approaching humans, recognise up to ten different faces, perform step and dance routines, kick a football and run at a fairly nifty 9 km/hr. Indeed, it has been a memorable few years for the humanoid, who has rung the bell to open the New York Stock Exchange, conducted the Detroit Symphony Orchestra, strolled up

the red carpet at the premiere of "Robots" and become a mainstay at Disneyland's ‘Innoventions’ attraction. Impressive stuff, but what is the significance of this technology and how can it be applied to assist real humans? Certainly, the technology behind predicted movement control has resulted in invaluable progress for mobility assistance, namely Stride Management Assist and Bodyweight Support Assist. Perhaps ASIMO's greatest achievement, however, has been as a stimulus for the millions of children and students who have been thrilled at the possibilities he continues to represent and inspired to study science as a result.

Bright Ideas | ROBOTICS

O DY S S E Y M A R I N E EXPLORATION 4 What’s the best new way for a cash-strapped government to raise some funds, without getting the taxman involved? Look down, that’s what. Really far down to the bottom of the ocean, where barnacle-strewn hulks of long lost vessels bely vast riches, untouchable until now. Although it seems a little far-fetched, the advent of extraordinarily durable and location-led robotic technology that’s capable of withstanding inconceivable deep water pressures, has created a kind of salty gold rush. Powered by the enormous brains at firms such as Tampa Bay’s Odyssey Marine Exploration, this Boys Own success story has developed all kinds of fully controllable robotic claws, lights and cameras to enable the discovery of such valuable shipwrecks as the SS Mantola, a British steamship torpedoed by a German sub off Ireland in 1917. The Mantola went down with all 20 tons of its silver cargo aboard, worth approximately £11m in today’s terms, which the British Department of Transport has reportedly asked Odyssey to retrieve this spring. During the summer of 2012, the firm recovered 48 tons of silver from another vessel - the SS Gairsoppa - and is planning a number of exploratory surveys this year. The firm claims to have surveyed and mapped over 17,000 square miles of seabed and spent 10,000 hours spent diving on shipwreck sites with this advanced robotic technology. Successes have ranged from hugely significant historical discoveries to extraordinary buried treasures, although above all else it is keen to stress the employment of the highest archaeological standards throughout its work. By investing in the

latest, most advanced robotic equipment, Odyssey have managed to corner the largest geographical market in existence - and the enormous opportunities are literally waiting to be found. ELEVATOR MAGAZINE | 127

MOBILE SECURITY Using encryption, ciphers and peer to peer messaging, Redact sends heavily encrypted messages from one phone to another without passing through any central servers. Words FRANK BUTLERS


We spent years believing that BlackBerry messenger was secure, safe and encrypted, but when the London riots broke out last year, the British government were able to request all the information from BlackBerry in order to put a stop to the organisation of the riots. Whilst no company is ever likely to sacrifice themselves for our privacy, there is another option. Redact is a messenger application for iPhones that enables people to send totally secure peer to peer messengers. And what happens if the information is requested by the authorities? 'Unfortunately', Redact don't store any information. The entirely secure and anonymous messenger stores no central information, which, I'll admit - makes using it a little more difficult than Skype or Whatsapp, but we've found that using Redact as a destination messenger for secure information and sensitive details is the best way. On the following page, we explain some of our favourite features of the application.


INSTANTLY REDACT MESSAGES 1 Within the Redact messenger, users can redact any message sent using the application. When either you or your contact tap the redact button then sensitive information is instantly removed from your phone. What's more, the message is also redacted on your contact's device and you see a status message whilst it's processing - this way you can see exactly when the command has been sent to their phone and accepted. There's no way to refuse a redaction or avoid it, so you can be confident your message is deleted forever - we tried a few times to catch the application out, but could never succeed. The redact function is exceptionally useful - there are quite often parts of a conversation (such as bank details, phone numbers, etc) that you might not want your contacts to keep a record of, what's more, if you send something and want to retract it, you can occasionally redact a message before the contact has had time to receive and read it.

PEER TO PEER MESSAGING 2 This seems obvious, but no other messenger does it. Redact will only send a message when both users have the application open simultaneously. All instant messaging apps store messages you're sending to your contacts. No matter how securely these messages are saved, they're vulnerable to hackers or government supinas. Redact stores no messages, contact information or usernames so there is no information to be stolen. Although this can make establishing a conversation a slightly longer process than your average messenger, that isn't really the point of the application and you're failing to understand its value if you judge it purely on that. When you try to send a message to your contact, the application will check

to see if they are currently online, if so, a secure peer to peer connection is made and the message is carefully transmitted between the two parties. If your contact is not currently available, the message is encrypted and stored locally, and stays in a pending state until you and your contact have the application open simultaneously. A push message is sent in the meantime to let your contact know he has messages pending.


PERSONAL IDENTIFICATION 3 NUMBERS When you sign up for the application, Redact never asks for a username, email of phone number, you're automatically assigned a PIN. Your unique number is never stored anywhere, and there are no password or username recovery tools for hackers to exploit. To help figure out who's who inside the app, users can set their own alias, only you can change your alias, so you can be certain contacts aren't using your real name anywhere in the application.


GOOD BUSINESS We have a look at the emerging freemium business model that is being adopted by software companies all over the world. What can we learn from this growing trend? Words GERALD MORGANS


Online businesses have been breaking with all convention and debunking the more simple traditionalist business models in recent years. This is most evident in the freemium type business model that is becoming a staple for so many digital start-ups. Looking at the early pioneers in this sector we mostly see businesses that have started as small, home-based college projects and seen spectacular consumer adoption before really dealing with the problem of a revenue model. The others tend to be offering a paid for SaaS product with a free entry-level package as a trial. Either way it looks like this new wave of digital entrepreneurs are being creative and finding ways to make their businesses work and the result is a surge of fast growing companies being valued in the high millions in a very short time. The potential rewards are enormously tempting and sufficient to generate a huge growth in business start-ups. It’s debatable whether the current models will hold up or whether these tactics need further development, but to get a greater

Bright Ideas | FREEMIUM

understanding of what could happen next and how we arrived at this point we should consider the most prolific players in this freemium sector. In the early days of the web no one really knew what could or would happen and fortunes were made and lost in rapid succession. In 1996 Sergey Brin and Larry Page, students at Stanford, were working on the Stanford Digital Library Project in order to create a searchable digital library of content. Their first web crawler began exploring in early 1996 and in September 1997 Google was born. At first there were no revenues, or considerations for revenues although as interest and usage grew the pair realized they would need more funding as servers held together by duct tape in their garage weren’t going to hold up. The pair raised their first $100,000 in August 1998 and raised an eye watering $25m a year later. At this stage investors had spotted that with a high volume of usage must come opportunities for revenue in advertising and the seed was sown. The secret of Google’s success is in the simplicity of its core business model: users search the web via Google, find what they need and in the process are served advertising related to the search. This simple idea has been a phenomenal success and gave advertisers an opportunity they could only have dreamt of – minimum wastage on their advertising spend. Google has diversified greatly since and has become a dominant force in the search market. The story of Facebook is not entirely dissimilar to Google in that a group of college students develop a project which goes on to become an international success, without first considering the revenue model. Rapid adoption and a high level of engagement on the site created an attractive proposition for

THE CONCEPT OF FREEMIUM IS CONTINUING TO EVOLVE AND ABSORBING MORE OF THE TRADITIONAL SOFTWARE TYPE BUSINESSES advertisers and Facebook opened up its platform to third party developers to introduce games in order to keep this engagement level high. The result is a business that’s been able to diversify and explore other revenue streams, although the advancement of mobile usage has created its own set of challenges as the available screen real estate is reduced. Other social networks have followed a similar pattern, although LinkedIn has been the most prevalent in creating premium models and paid user functionality. The concept of freemium is continuing to evolve and absorbing more of the traditional software type businesses. In the past we saw that software developers would create a product, package it and sell it on a single fee, via download or disk, with paid for updates being released as and when available. This business model is disappearing quickly in favor of the software as a service (SaaS) approach. As developers have moved to a subscription license model for their software products there has been a growth in offering freemium entry level product, with features stripped to the minimum so as to capture free users with the goal of converting these via upgrades to paid subscribers. This seems to be a more sustainable model and has proven to be successful with SaaS products now accounting for over $14.5bn in 2012 and a growth of over 20% annually over the last 4 years. Skype have built a vast business based on many of us using a free service and then either upgrading or utilizing

the pay-as-you-go model. This allows businesses like Skype to build large revenue run rates without the need to rely on advertising, which can often be a fickle source of revenue. Whether we’re beyond the golden age of freemium type start-ups is open to debate, but it’s hard to envisage the advertising market being able to support continued growth. Consumers are becoming more savvy and realizing that to companies like Facebook and Twitter they are the product and not the customer. This realization is leading to a thinning down or page views on these platforms and advertising via social networks provides relatively poor returns for advertisers. It’s no longer enough to have a great product idea, aim for user traction and worry about the revenue later as the age of user innocence has passed and there are a vast number of advertising opportunities to compete with. Freemium models are adapting to identify revenues beyond advertising and mobile has been instrumental in forcing entrepreneurs to rethink their strategies, looking at revenue shares and low entry subscription models. It’s still possible to rapidly build a business based on a free entry level, but there needs to be a solid revenue plan and proof of traction on paid subscribers or partner revenues to back this up. The cooling of interest from the VC community in the valley towards these businesses could force entrepreneurs to re-invent the freemium model, but it’s unlikely to disappear now that consumer appetites have been whet. ELEVATOR MAGAZINE | 131


In 1998, Justin Rose stayed In 1998, true Justin to his Rose beliefs, stayed joining true to thehis beliefs, joining the European Tour against European all the odds Tour at against just 17allyears the odds old. at just 17 years old. At Maurice Lacroix, we At Maurice create our Lacroix, uniquewe movements create our unique movements and award-winning designs and award-winning by hand – because, designs like by hand Justin,– because, like Justin, we too follow our convictions. we too follow our convictions. For more informationFor visitmore information visit Pontos Décentrique GMT Pontos Décentrique GMT



PRIVATE MARKETS Start-up companies are all the rage at the moment, but with traditional VC funding drying up, where can new business owners go to find vital launch capital? Words EVAN WALSTEIN

EVERYONE SEEMS TO BE TALKING ABOUT his or her start-up these days, and starting a business is getting easier as funding becomes more accessible to everyone. The growing phenomenon of crowd funding is gathering pace and new liquidity channels are evolving to cater for the rising demand. We can all now be start-up backers with just a credit card and an internet connection and, more importantly, it can be fun and rewarding. The more serious investor will say that it’s not the startup that counts it’s the follow-up. That’s an important doctrine, but for many the thrill is in the process and an ever-increasing number of crowd funding sites are popping up to cater for everyone, some more serious than others. The JOBS Act, legislation that came into force in the US in April 2012, has made it easier for businesses to raise money from a larger pool of smaller investors and has paved the way for budding entrepreneurs to source funding more quickly and with less red tape. There are pitfalls elsewhere as legislation varies from country to country and the Howey Test is generally seen as a useful rule of thumb for those unsure as to what constitutes an investment contract and thus a security ( The roots of crowd funding lay in the music industry with sites appearing as early as 2001 to help new and existing artists fund projects when record companies weren’t putting up the necessary backing. Sites like ArtistShare,

Sellaband and IndieGoGo all had considerable cult following but the earliest recorded instance of crowd funding was in 1997 when fans of rock band Marillion began an online campaign and raised $60,000 to underwrite a US tour. The campaign was a huge success and Marillion continued to utilize this approach to fund further albums. MySpace became significant in allowing new artists a shop window and crowd funding began to spread into movie projects, book publishing and online start-ups. The process comes with inherent problems for the entrepreneur, particularly for seed stage businesses. Having a great business idea and then publicizing this at early seed stage leaves the fledgling business vulnerable to being copied by larger and better-financed organizations, which is all part of the risk. For the investor the ‘buyer beware’ rule applies, as always. But more and more small private investors are taking the view that they may just want to see a project get off the ground and it may just be that the project is close to their own heart. However you choose to view the crowd funding phenomenon it looks as though it’s here to stay and there’s clearly an appetite from both the amateur small-scale investor and the larger players looking for a more rapid discovery of valuable opportunities. We’ve taken a look at just a few of the new breed of liquidity markets that have been catching our attention recently. ELEVATOR MAGAZINE | 135

KICKSTARTER Perhaps the best known of all crowd-funding sites, launched in 2009 and boasts $350m pledged by over 2.5m individuals in over 30,000 projects. Kickstarter’s big successes have mainly come from the technology and gaming sectors, hardly surprisingly. To launch a project on Kickstarter you will need to be resident in the US or UK in order to apply and all applications are vetted before appearing on the site with around 75% of submissions being accepted. Creators offer rewards which can often be free product and there is an all-or-nothing rule whereby projects have a target amount and pledges are confirmed once this target is met and the project can be certified.


To launch a project on Kickstarter you will need to be resident in the US or UK in order to apply





FIRSTPEX The pioneer in private equity auctions in Europe has completed its extensive beta testing phase and we've been told that big things are going to happen with FirstPEX in Europe in 2013. It's gearing up to become the number one service provider amongst private markets with cutting edge technology and operating with a head-start in a receptive environment where there are more private companies per capita than anywhere else in the world.

This newcomer with the right tools and extensive market knowledge is getting ready to take the market by storm.


SECONDMARKET Founded in 2004 SecondMarket began life as a marketplace for restricted securities in public companies, but has since developed to encompass other asset classes. The site targets the more sophisticated investor, or institutional investor, and allows private companies to conduct private liquidity programs allowing employees and other shareholders to sell shares within a company controlled process. In addition to trading shares in private companies SecondMarket also operates as a resource for community banks looking to provide liquidity solutions. Bankruptcy claims can also be sold or auctioned through the site’s investor network.


In addition to trading shares in private companies SecondMarket also operates as a resource for community banks


ROCKETHUB RocketHub was launched in January 2010 as a direct competitor to Kickstarter. The site allows project creators to keep all the funds they raise, regardless of whether the funding target is achieved. The basic premise is similar to Kickstarter in that it operates a donations and rewards scheme, thus avoiding much of the international legal red tape. As with its direct competition many of the projects created are centered on technology and the arts. RocketHub is a small business with a big voice and has been instrumental in lobbying the SEC for more standardization in the sector.

The basic premise is similar to Kickstarter in that it operates a donations and rewards scheme


CROWDFUNDER Another relatively recent entry to what is still a young market and founded in 2010 from Exeter University’s Innovation Centre in the UK. Registration is free and there are no monthly subscription fees as the site takes its sole revenue from the 5% it levies on success. Projects need to raise all the money within the agreed timeframe otherwise the money is refunded to the investors. It’s very much a clone of Kickstarter in its principles and terms, but has a more local feel that appeals to many investors. The future of crown funding could well be hyper-local as it seems to fit well with the whole community ethos and sites like Crowdfunder are well placed to take advantage.


Projects need to raise all the money within the agreed timeframe otherwise the money is refunded to the investors


ANGELLIST Founded in 2010 AngelList has quickly carved out a niche as the place to be for angel investors and early stage tech start-ups. It has a home-spun feel and has been created by the Venture Hacks team. Investors can follow companies on Twitter and other social networks and these companies are then ranked by level of interest. It’s an unusual and left-field concept but gaining followers and a good reputation all the time. The proof is always in the number of successful deals done and there seems to be a steady pipeline coming from AngelList.

It has a home-spun feel and has been created by the Venture Hacks team




THE FUTURE OF MEDIA The state of the media affects all our lives. The last twelve months caused some of the most dramatic shifts in the industry. We investigate the impact. Words SAM BRADY

RINGING THE BELL TO SIGNIFY THE death of print in media is something of an extreme reaction and a little premature. The numbers for the newspaper sector, in particular, make harrowing reading for the press but it’s by no means the end of the road. If you slice through all the panic and doom mongering then it quickly becomes evident that we’re seeing a fragmentation in how readers choose to accept content. The newspaper industry will need to adapt more quickly and some are performing much better than others in the new digital world, The New York Times and Daily Mail are great examples of how the daily press can flourish when they can embrace change and both have enjoyed enormous successes both online and offline. Whereas in the recent past we all caught up on news through papers, TV and radio we now live in a better connected world with online proving to be the most efficient news delivery method. Many newspapers floundered during the early days of the web, and many still do as they struggle to monetize their digital content but the evolution of the news industry has seen newspapers adapt to become more feature led whilst the hard-hitting news stories are delivered

'WHAT WE’VE SEEN WITH MANY PAPERS IS A FAILURE TO ACKNOWLEDGE THAT DIGITAL IS AN ALLY RATHER THAN AN ENEMY,' through their online editions. What we’re seeing now is the consumer deciding in what format they choose to engage with a newspaper brand and this is fundamentally their choice to make. There will still be a market for a print product and it’s hard to envisage this disappearing entirely, but for many the convenience of apps and websites is far more important. What we’ve seen with many papers is a failure to acknowledge that digital is an ally rather than an enemy, it’s another route to the valuable reader. ELEVATOR MAGAZINE | 143


Kindle e-book sales rose by 188% in the UK during the first half of 2011

There has long been a resistance and a ‘them versus us’ attitude between offline and online media, which is understandable in an industry that has changed little in centuries. For a newspaper to survive the erosion of print advertising and the depletion of offline readers they will need to start seeing themselves as content providers as opposed to print publishers. This may seem like a simple enough step to take, but it does in fact undermine the entire business model of many media owners and they are understandably fearful of stepping into a digital world they have yet to fully grasp. This is an industry that still doesn’t give the same credibility to words on a screen as it does to words on a printed page. There’s less time for correcting errors, the production cycle is entirely different and online media is much more forgiving of mistakes. 144 | ELEVATOR MAGAZINE


Few are able to survive on copy sales alone and most are reliant on at least 60% of revenues coming from advertising

Old school newspaper staff are too attached to the nostalgic view of editors planning pages, skipping stories that won’t fit today, print running off the presses and a physical product being shipped as everyone involved works to collective deadlines. The majority of those who can’t adapt and make the necessary transition will simply not survive. It’s evident from circulation figures that the decline in newspaper print sales is starting to level and overall we saw a fall of around 10% in the UK and the US during 2011, but this is balanced by an increase of over 40% in web traffic for newspaper sites in the same period. Figures for app editions are more sketchy as the industry tries to catch up with new auditing methods, but it’s fair to assume that what we’re actually seeing is a greater consumption of news in a wider range of content



Last year, Chicago-based multimedia conglomerate Tribune Company - owner of 10 daily newspapers that include the Chicago Tribune and Los Angeles Times (along with 23 television stations, radio stations and cable network WGN America), finally emerged from bankruptcy - the largest in the history of the American media industry when it was initially filed in 2008. Back then it was when real estate mogul Sam Zell privatised the company that Tribune went bust. But now in 2013, the value of the newspaper segment of the company has considerably dropped. The Tribune’s financial advisor commented that the “decline in value is principally attributable to and fully consistent with continuing declines in both the publishing industry generally and at Tribune.” Tribune’s new owners (including Oaktree Capital and JPMorgan Chase), plan on selling assets and steering the company towards a multifaceted future - including more efficient digital platforms. The newspapers may be first up for sale - perhaps to Rupert Murdoch's new spinoff, News Corp.




delivery formats. Books and magazines offer an interesting comparison as both have taken to this transition much more readily. Kindle e-book sales rose by 188% in the UK during the first half of 2011 and print copies are still selling well. This points to the fact that more people are reading more books. The advent of e-readers has grown the market as more people rediscover the joys of reading with new technology. The magazine industry is also catching up and UK sales of print magazines dipped a mere 2% overall in the first half of 2011 and tablet editions, still a relatively new phenomenon, are selling well so as to imply a growth in the magazine readership market which is in stark opposition to the gloomy outlook portrayed by many. In the US we see an even brighter picture with no fall in print sales and a rapid uptake in

'IN THE US WE SEE AN EVEN BRIGHTER PICTURE WITH NO FALL IN PRINT SALES AND A RAPID UPTAKE IN TABLET EDITIONS OF MAGAZINES' tablet editions of magazines. Where the magazine industry is still faltering is attempting to transition their advertising sales models and this is crucial as few are able to survive on copy sales alone and most are reliant on at least 60% of revenues coming from advertising. So why are the newspaper groups falling



In September 2012, US media firm Journal Register Company (JRC), filed for bankruptcy for the second time in three years. Despite a 2010 restructure and the implementation of an aggressive media strategy led by CEO John Paton which was championed by some of the most respected names in the industry, the company, which serves almost a thousand communities across the US and includes Connecticut's New Haven Register and Michigan’s The Oakland Press, blamed drops in print revenue and the burden of unsustainable legacy costs (such as leases, contracts and pensions) for the overhaul. This month a partnership has been announced between Digital First Media, which operates JRC, and world news site GlobalPost - with plans to focus on renegotiations and make the transition into digital and more sustainable enterprises.




In China and India we are seeing a continuation of growth in newspaper print circulations

behind? In order to figure this out we need to first look at how the market is separated out. In China and India we are seeing a continuation of growth in newspaper print circulations, which gives us a skewed view of the market from a global perspective. Newspapers in Europe and North America have had a rougher ride that will, in time, be reflected in emerging markets. The hardest hit are the local press and there’s little appetite for local newspapers as they reduce page counts and become increasingly advertising focused. The classified print advertising market, traditionally the bedrock of many local papers, has collapsed as sellers have already migrated to the likes of eBay and Craigslist which offer a more effective and lower cost marketplace for cars, household goods and services that formed the large part of print classified advertising. The same applies to real estate advertising that has migrated successfully to specialist websites, pulling ad spend from local press and leaving a bare minimum. It’s hard to see a future for printed local papers as they are, although the market will still exist in larger urban areas. The national dailies are a different matter altogether and those that are embracing new formats are making hay. The Daily Mail, based in London, has seen a remarkable and meteoric rise in recent years as it re-invented itself in all but content tone. This mid-market, middle-England stalwart has now become the world’s most visited 148 | ELEVATOR MAGAZINE

'IN THE US WE SEE AN EVEN BRIGHTER PICTURE WITH NO FALL IN PRINT SALES AND A RAPID UPTAKE IN TABLET EDITIONS OF MAGAZINES' newspaper site, passing The New York Times, and it’s done so by breaking every rule in the newspaper industry. The online version differs greatly from the offline version and is far more celebrity news focused (whether we like it or not this is great for SEO and thus traffic), it has avoided the standard rules of web design and created a visually hybrid site, headlines are longer, pictures are bigger and the site offers a very different content form to offline. This was a big risk and it’s paid off, allowing The Daily Mail to explode out of its domestic UK market and become a global news site. The New York Times has also embraced the potential of multi-channel content delivery and has led the way in apps across multiple platforms. The paper’s strategy has clearly paid off as overall circulation rose over 40% between 2010 -2011 accounting for an additional 500,000 copies per issue sold. Similar successes have been seen with The Washington Post and The Wall Street Journal, both of whom



have made good use of online as a way of attracting new readers. The real task for the papers is in convincing their advertisers and how they handle this is the key to their survival. They will need to look closely at how their advertising sales teams work with the media buying agencies and this will involve a change in how advertising space has been traded in the past. This relationship between brand and media will need to be much more robust and both will need to work in close partnership, which has always caused friction within media as editors fight to retain their editorial integrity. This will be a tougher problem to solve and will require ongoing fine tuning and perhaps even a shift in how the media buying agencies operate and are structured as most of the larger agencies still separate print from digital. Seeing the future of the newspaper industry

is easier as an outsider with no ingrained preconception and this is not an easy transition for many old school newspaper bosses. The shift in demand is not necessarily a purely generational one either as tablets, e-readers and laptops become the norm for everyone over print. The consumer market is less black and white than internal industry analysts have suggested and most of us will still read in all the given formats, choosing to select the most appropriate and convenient at the time. Giving the consumer choice is what will drive the market forward and the advertisers will follow wherever there is a clearly defined proposition for them. Those who can embrace this will profit and for the rest, tough times still lay ahead.


This relationship between brand and media will need to be much more robust and both will need to work in close partnership


THE TALE OF GREED AND THE VICIOUS CIRCLE OF HUMAN NATURE Our editor, Patrick Gruhn takes a look at the human condition and what's wrong with us today.


IT IS ONE OF THE MOST COMMONLY found symptoms of modern society, the insatiable appetite for more and that's regardless of what we already have. When have you ever heard someone say: Oh I’ve got enough, I don’t need this or that, I’m happy with what I’ve got. Such statements are rare commodities nowadays and that’s a shame for more reasons than you might think! It has been said that in life, the human being is majorly motivated by two factors: fear and greed, aside from idealistic motivators like love and compassion which are rapidly fading in our landfill society. Is it naïve to ask why it is not good enough that the economy is performing in a stable manner, most people have a job and that growth is slightly positive? I have to ask this question because growth requires ever improving productivity and higher demand. That in turn undoubtedly takes a toll on both nature 150 | ELEVATOR MAGAZINE


How can it be that such greed and insatiable desire for ever more and ever newer things has multiplied so rapidly in the recent past

and those who have to work ever harder to keep up and work ever harder to earn more to consume more whilst the distribution of wealth is more and more distorted. Worst of all, this is not sustainable in any way. Despite the fact that greed and the appetite for the finer things in life has always been present in history, how can it be that such greed and insatiable desire for ever more and ever newer things has multiplied so rapidly in the recent past. Is such behavior not the doom of society? Doom not as in the physical death but rather the total loss of real human values. Without any intention to sound too dramatic, it is evident that we as a whole don’t live together or share each other’s lives but rather co-exist through smartphones and behind flickering TV screens. Our lives are all 3G, HD and 3D but they are no longer real. Tears and laughter have been replaced by smileys and abbreviations. We are connected



The number of patients being treated for depression or anxiety disorders in many western countries has soared THIS IS A CAPTION THIS IS A CAPTION THIS IS A CAPTION

'OUR LIVES ARE ALL 3G, HD AND 3D BUT THEY ARE NO LONGER REAL' in many ways nowadays but none of it is real. Have you ever seen the face of someone sending you “LMAO”? 9 times out of 10 they are not even smiling… I’m not reminiscent of times when consumption wasn’t at the forefront of our everyday lives simply because I’m too young to know such times, but whatever happened to intangible values and judging people by the way they act in their community rather than how much money they have in their bank account or how big their house is or how fast their car is? Again, this seems naïve but if you think about

it, its not. Rather it’s idealistic at best and what does that mean – dare to hope for the good in mankind. If that is naïve then we are truly on the wrong path well past the point of no return. The cherry on top is that if you achieve the success that the collective mind believes we should all strive for, the collective becomes envious, tries to make you trip so you fall to their level again because your success is a painful reminder of their own failure… Where’s the fun in that. Did you know that the number of patients being treated for depression or anxiety disorders in many western countries has soared insanely over the past decade? In some places up 400%! Doesn’t that tell us something? I think it is only one symptom of a crippled society but we are not listening to the warning voice because we don’t seem to have a choice. Today’s one-second economy is a cutthroat place – more than ever. Here is some more food ELEVATOR MAGAZINE | 151

for thought: obesity is constantly on the rise, why? Because bad food is cheap and engineered to taste good? That’s proven so no surprise there but did you contemplate the relation between people who eat to feel better and the rise of obesity? It’s easy to blame it on the quality of the food, despite the fact that there is a clear relation between troubled minds and expanding bellies. We eat to feel better and that starts in childhood! So if we look at it from this angle, we’re really heading for a rude awakening. Particularly from the productivity perspective we can’t afford all these fat and sick people – but we create them exponentially. Especially if we add into the equation that bad foods are consciously chosen over good foods because it means less expenses for consumers and more profits for corporations. It is a collectively forced symptom of modern society! We try to blame fast food chains like McDonald’s for our problems but where or when did McDonald’s ever claim that they sell healthy food? All they say is that they sell cheap fast food. Burger and fries! Those who claim that they don’t know that there are healthier 152 | ELEVATOR MAGAZINE


As economies falter, we give up and we make our projections become reality

alternatives probably dispose of a sub-optimal IQ. Stop blaming everybody else for your own problems… The human being is the apex predator on this planet, nobody eats us and logically what does that have to mean? We have to be our own worst enemy, destroy each other and ourselves by nature. The paradox here is that we are equipped with minds that allow us to make conscious over instinctive decisions which should mean that we can chose not to auto-destruct but still we do it. The outlook of the economy and therefore the outlook for any society is the collective sentiment of prosperity or depression. When life becomes more and more demanding as standards are raised in both personal and professional lives, objectives are ever harder to reach and no matter how strong the mind, the majority will give up sooner or later. Once the majority gives up, what happens? Recession, Depression… As economies falter, we give up and we make our projections become reality so ultimately, if we wanted to we could live in extensive growth cycles but that’s simply wishful thinking because it's easier


THE HUMAN BEING IS THE APEX PREDATOR ON THIS PLANET, NOBODY EATS US AND LOGICALLY WHAT DOES THAT HAVE TO MEAN? WE HAVE TO BE OUR OWN WORST ENEMY, DESTROY EACH OTHER AND OURSELVES BY NATURE. to give up than to work hard. It is a fact of the present that we want to have more but work less. We are saturated on our couches and that needs to change. Setting this thought aside, it is also essential to look at the role of corporations, investing absurd amounts of money in advertising. Did you know that global advertising expenditure in 2012 is estimated to be more than 500 billion U.S. Dollars? And this number is growing several percent each year. This amount is so mind-boggling that we have to put it in perspective. This number is more than the entire national, annual budget of a strong economy like Germany. We spend this much to make each other want more. It is simply astonishing. Religion is a topic in this matter as well! Whilst it may appear that greed, over-indulgence and over-consumption to the point of waste have been deadly sins, religiously outlawed for centuries, we don’t seem to care much about those traditional guidelines of faith. Historically these “laws” worked well for as long as the majority of people were fearful of god or the church but it seems that the desire for more has drowned out the voice of reason. Another paradox here, as in some countries there’s an actual church tax, people chose to leave the church, as money is their new god. I’m not a believer myself but even if I was, it’s

interesting to connect those dots and to see what money has made of us all. Like hamsters in a wheel, running, running and running and then some more running… Some may adopt a philosophic approach to real satisfaction. If that’s something you’d adhere to, try this on for size: money has to be the tool to achieve certain things or to do things nothing more nothing less. Money cannot be the ultimate objective because money as such doesn’t create anything or give you anything; the hard-working men and women of this world create things! How much time have you spent thinking about what money really is? OK, in the past our money was actually backed by physical assets like the gold standard and before that money was actually made from precious materials representing the value, but nowadays money is based on faith and trust in the country that issues it. At the end of the day its colorful paper and scrap metal or worse, binary codes on computers. It’s all rather surreal when you start to think about it. It becomes harder to make money but it flows through your fingers faster than sand… One thing is certain and this shall be my closing argument; our last shirt doesn’t have any pockets. You can’t take anything with you so it may be futile to amass more than you can need. OK, you might say that you want to care for those you leave behind, that is a valid argument but beyond that? At the end of the day, when you look into the mirror at night, you have to know that you’ve done more positive than negative things in your day. That is all that matters. It doesn’t matter what you own – all that matters is what you do with the time you have. Time is our most valuable possession; we can’t make more of it so we need to spend it wisely, not chasing something we can’t keep… We have to revive the thoughts of identifying each other by what we do and not by what we have if we want to build a better tomorrow filled with human values because as things stand, our society is exponentially rotting from within, one gadget at a time.


How much time have you spent thinking about what money really is?


Only street performers can make money by standing still. To find the right investor or investment for you, visit





Fun... | TRAVEL

THE ELEVATOR TRAVEL FOR 2013 Holidays are few and far between, if you work hard, it’s vital you play equally hard. In this issue, we bring you some of the most exotic and interesting locations on the planet. From Ireland to islands in the middle of the ocean, make sure you’ve seen our list before deciding where you’ll be jetting off to this year.




Rio de Janeiro is a land that really does have it all - seamlessly switching between city thrills to pristine beaches, sun-kissed mountains and waterfallstudded exotic forests. And there’s a lot more in store for one of the most vibrant cities in the world. As it gears up to 2013 FIFA Confederations Cup, the 2014 Brazil World Cup and of course the 2016 Games, there’s already a huge buzz building in Rio. The city will soon become a colourful haze of tourists, Samba and Carnaval - it’s easy to see why Rio is the most visited city in the Southern Hemisphere.


By day take a tram ride to the bohemian hillside town of Santa Teresa, explore tropical gardens at Aprazível, or perhaps Sugar Loaf Mountain (Pao do Açucar), and when the sun sets you can head to the coast to sip caipirinhas at the infamous Garota de Ipanema (formerly the Veloso bar-café) – where in 1962 Vinicius de Moraes penned lyrics to Antônio Carlos Jobim’s melody ‘The Girl from Ipanema’, while they watched beautiful women walk to the beach. Except for its name the bar has hardly changed at all.

Fun... | TRAVEL

Copacabana Palace

At the sun-soaked Copacabana Palace, located across the street from Rio de Janeiro’s popular Copacabana Beach you can sunbathe on the expansive pool terrace, or enjoy Brazilian buffet and afternoon tea poolside at Pergula. Evening gourmet northern Italian cuisine is also served at the elegant Hotel Cipriani restaurant. All of the hotel's 222 glamorous rooms and suites feature period furnishings and original artworks and the one-bedroom pool suites all have verandas directly overlooking the stunning beach. +55 21 2548 7070 Avenida Atlântica 1702, Rio de Janeiro, CEP 22021 001, Brazil




What destination review would be complete without paying homage to the vibrant 24/7 party city of Las Vegas. Offering sunshine, shopping and glitz on a monumental scale, every hotel either has a casino or shopping mall attached to the side. The marble shines, the gold glistens, and the rooftop pools are bubbling over with bikini-clad partygoers. You might feel that there is little reason to even leave your facility-packed


accommodation - but Vegas isn’t just about hotels and casinos. There are loads more adventurous activities on offer, including hiking, biking and rock climbing - which can all be done in the nearby Red Rock Canyon National Park. You can go out, ride a dune buggy in the desert, come back to your gloriously ostentatious hotel and then enjoy some of the best dining and gambling the world has to offer.

Fun... | TRAVEL

Mandarin Oriental Las Vegas

A sophisticated sanctuary of modern elegance in the heart of the Las Vegas Strip, the Mandarin Oriental is the only hotel in Las Vegas (and among only four in the world) to have received the Forbes Five Star designation for 2012 in all three categories: hotel, spa and restaurant. Designed by the award-winning architectural firm Kohn Pedersen Fox, Mandarin Oriental has 392 spacious suites and 225 residences with an impressive “Sky Lobby” located on the 23rd floor - providing a stunning arrival experience with glittering views of the Las Vegas skyline. Three lavish presidential suites on the hotel’s top floors each measure over 3,200 square feet. +1 (702) 590 8888 3752 Las Vegas Boulevard South, Las Vegas, NV 89158 USA




The tropical island of Sri Lanka has experienced a recent boost to tourism, becoming the must-visit destination for intrepid travellers. For a small island it offers a lot; there are several UNESCO world heritage sites and magnificent remains of ancient Sinhalese kingdoms - such as 5th century rock fortress “Sigiriya” which is built in the shape of a crouching lion. Adrenaline junkies can choose to kitesurf at the Northwest Kalpitya Peninsula where the strong breezes of Kitekuda Lagoon are there to


be harnessed, or they can take a morning hike to see the sacred footprint whilst the sun rises over Adams Peak, one of three holiest sites in Sri Lanka. Get up close and personal with endangered Asian elephants at the Pinnawela Elephant Orphanage, or visit one of the vast tea plantations in Sri Lanka’s highlands such as Nuwara Eliya, the world’s tea capital. Or, simply recharge your batteries on one of the endless golden beaches.

Fun... | TRAVEL

Galle Fort HOTEL

The Galle Fort is an intimate, hip boutique hotel that’s been converted from a 17th-century Dutch merchant’s house. With its laid-back atmosphere and delightfully eclectic suites set around a pool in the central courtyard, Galle Fort seems to entrance all of its guests. Owned and run by an Australian film producer (who came for a holiday and ended up with a hotel), it has an air of exotic romanticism that has earned the hotel countless rave reviews from the trendiest travel writers including Vogue, Conde Nast and Wallpaper Magazine. +94 91 2 232870 Church St Fort Galle 00800, Sri Lanka




There's a lot of energy in South Korea right now, business is thriving and as a tourist destination it’s gaining momentum. The mega-metropolis is home to some 10 million people, and is attracting a fresh new audience. Amongst the wide range of restaurants and shops there are tons of historical palaces and Buddhist temples where you can soak up the Korean architecture and atmosphere. With convenient commuter trains that carry travellers directly to and from downtown Seoul, the heart of the city is


also within easy reach of some stunning natural parks and animal sanctuaries. Gwangneung, Namyangju is one of 18 neung, or royal tomb clusters honoured as a UNESCO World Heritage site that is a convenient train ride away. Immerse yourself in history at the Jayu Park or Chinatown, or visit the Demilitarized Zone (DMZ) - a fascinating strip of land that runs across the Korean Peninsula to serve as a buffer zone between North and South Korea. It is the most heavily militarized border in the world and one of the biggest tourist attractions.

Fun... | TRAVEL

The ShillA, Seoul

The 26-story Shilla Seoul is a modern hotel that has a restful and atmosphere and elegant decor - a perfect retreat after a hard day sightseeing. With impeccable service and spacious well-appointed rooms, the hotel is set in 23 acres of woodland in downtown Seoul and within easy reach of all the city has to offer. +82-2-2230-3310 202 Jangchung-dong 2-ga. Jung-gu. Seoul 100-856, Korea




Dubrovnik, the ‘jewel of the Adriatic ocean’, is a city that continues to appeal to holidaymakers from far and wide, and it’s become quite a haunt for high-profile celebrities. A place of beautiful scenery, turquoise waters, pine trees to the sea's edge and fresh, colourful Mediterranean food, there’s a strong Italian influence, which is not surprising as Italy is just


across the Adriatic Sea. The fresh Adriatic air and coastline is perfect for boating, water sports and working on your tan. There are squares, fortresses, palaces, monasteries, churches, synagogues and columns everywhere you turn, so if you like historical architecture then you’ll be in heaven.

Fun... | TRAVEL

Villa Dubrovnik

Prominently positioned on the cliffs above the Dubrovnik's prestigious St. Jacob precinct, newly renovated boutique hotel Villa Dubrovnik has magnificent panoramic views of the Old City and Lokrum Island. The Adriatic Sea stretches out beyond the sun-soaked terraces, and a secluded stretch of coastline attainable only to hotel guests. A state-of-the-art Spa takes up the central two floors of the hotel and offers a full range of relaxing treatments. +385 20 500 301 Vlaha Bukovca 6, Dubrovnik, Croatia




The buzz about Cambodia is fierce these days. With temples, monuments, markets and enough exotic food to make your head spin, the tropical turquoise waters and unspoilt scenery are causing the word to spread fast. The bustling hub of Siem Reap is the closest city to the Angkor Archaeological Park, and there are very few people that visit Cambodia without paying a visit to the amazing UNESCO Heritage Site. The great temples of Angkor were constructed between 800 and 1200 CE and served as the seat of the Khmer empire, and the


whole complex contains over a thousand temples, many of which have been meticulously restored. You'll find a wide range of hotels, restaurants and nightclubs in Siem Reap, many of which are brand-new. Whilst it’s a hectic, and at times sombre experience (the effects of a mere four years under Khmer Rouge rule can be still observed in the population today), the country’s rich culture and deep history make a visit to Cambodia a once-in-a-lifetime experience.

Fun... | TRAVEL

La Résidence d'Angkor

Five star hotel La Résidence d'Angkor is the perfect place to unwind at the end of a thrilling day in Angkor. An Orient Express hotel, the hotel has only 62 rooms so each one offers a little more than just a place to sleep, with ornate furniture and personal touches. The palatial pool is surrounded by trees and balconies, and the hotel spa offers treatments galore. The quality of service means you’ll want to return again and again. +855 (0) 63 963 390 River Road, Siem Reap, Kingdom of Cambodia




A holiday on the Emerald Isle is emerging as a must do, and there’s a lot of fun to be had in Ireland. Dublin’s architecture dates back to Georgian and Medieval times and with a population of only 4.5 million in the capital city, it’s easy to negotiate the castles, museums and art galleries on foot. If you’re on a shopping quest head to Grafton Street and Henry Street, bursting with Irish and international fashion outlets and crafts stores, and if you veer from these


main streets there are plenty of hidden treasures. Guinness boasts that one in every two pints drunk in Ireland is the black stuff, so a trip to the Guinness Storehouse is a must. The event of the year is St. Patrick’s Day - probably the most widely celebrated Saint’s Day in the World. No matter where you are on March 17th, you’ll be able to stumble upon some sort of riotous party – and you’ll find yourself welcomed with open arms.

Fun... | TRAVEL

The Merrion Hotel

The Merrion Hotel is one of the best hotels in the city. Adjacent to Dublin’s Government Buildings, the National Gallery and the National History Museum, it’s a short walk to the "golden mile" of lively pubs & restaurants, and Grafton Street is a stroll away for designer shopping. The hotel boasts Ireland's only 2-Michelin star restaurant, and paintings from one of Ireland's largest private art collections are displayed in two formal Drawing Rooms. The Tethra Spa features an 18m infinity swimming pool, steam room and luxurious treatment areas. +353 1 603 0600 Upper Merrion Street, Dublin 2, Ireland



Fun... | JETS

THE ELEVATOR JETS FOR 2013 The private aviation industry had a rough couple of years with many people downgrading from owner to charter, charter to first and first to business but things seem to be on the mend. Private flight is on the up and our favourite jet manufacturers are releasing some of the most exciting planes we’ve ever seen.


JETS 2013


corvalis ttx

The new Corvalis TTX high-end piston single made a welcome return last year after it was temporarily taken out of production in 2010. Launched in the mid-1990s and certified in 1998 by design originator Lancair, the Corvalis was originally known as the Columbia and was well received - considered by some to be even sexier than the Cirrus SR22, against which it directly competed (and still does). The all-new Intrinzic flight deck is powered by a Garmin G2000 avionics suite with a smartphone-like touchscreen that gives absolute focused control, with less wasted motion and effort. Every exterior surface of the aircraft (fuselage, wings and flight controls) is imbedded with lightning mesh to effectively and safely dissipate the adverse effects of a lightning strike. Thanks to its TCM TSIO-550-C 6-cylinder, twin turbo-


charged engine with dual intercoolers, you can fly up to 1,250 nm (2,315 km). And with the highest wing loading in it’s class, the Corvalis TTX is fast yet forgiving. It boasts a stable ride, providing docile, predictable low-speed handling. The E-glass and light, carbon-fiber composite materials in the TTX give superb speed and performance - and the sleek yet solid handling once you climb aboard and taxi for take-off is the next level in high-performance flight. When it comes to airframes, it doesn’t get much better than this. Approximately $635,000.

Fun... | JETS

cessna citation x

When Cessna decided to update their award-winning 1996 Citation X business jet, the Kansas-based company wanted to prove to the world they could continue to set speed records - and the day of reckoning arrived when they revealed their all-new Citation X in 2010. Cessna’s breakthrough came with perfecting the jets’ innovative elliptical winglets - previously an aftermarket option but which now come as standard along with the highly swept ‘supercritical’ wing shape (the upper surface is flat and the lower surface is curved, reducing turbulence), both of which extend range and improve efficiency without reducing

the 527 knot high-speed that leaves competitors behind. The fan blades were also redesigned to deliver more thrust, making the X the most dominant aircraft this side of the sound barrier. Powered by two Rolls-Royce AE3007C2 turbofan engines, known for their improved fuel efficiency and low acoustic signature, and with a top speed of Mach 0.93 (977 k/h), the New X flies faster and farther than its famed predecessor. Its 12-seater interior has been completely reimagined. The cockpit is revolutionary. And it still holds the record for the fastest civil airplane in the world today. Approximately $20 million,


JETS 2013


Falcon 900LX

There was much excitement in the aviation community when Dassault first announced its goals for the revamped Falcon 900LX. One of the worlds only three-engined trijets in production, the 900LX's improved aerodynamics makes it faster than other airplanes in its class, extending the plane's range and saving on fuel. Since 1997 when Dassault debuted their first three-engine supersonic bizjet, the company has made several breakthrough developments contributing to the success of today's midsize Falcon aircraft. Most notably, the revamped 900LX Dassault's winglets are different from traditional wing tips. Developed through collaboration with Aviation Partners Inc (API), the Falcon's signature high mach blended winglets boast increased range and efficiency at high cruise speeds. In practical terms,


this means owners of the 900LX get to experience an extended range of 8,890 km. The transcontinental 900LX literally broadens flyers' horizons - with longer, uninterrupted voyages to the exotic location of your choice. For example, flights can link New York to Moscow, or Paris to Beijing, or Mumbai to London, non-stop. The new LX is also the only bizjet in its class capable of landing with its fuel tanks nearly full, meaning it can stop to pick up passengers then resume flight without a second wasted.

Fun... | JETS


French fighter-maker Dassault is spearheading A 'UCAV' programme that following six years of research is now entering it's final phase. Flight testing has just begun on Dessault's 'nEUROn' - a UCAV drone ('Unmanned Combat Air Vehicle') featuring revolutionary designs that are expected to change the air combat paradigm, forever. Dassault are working alongside the French Defence Procurement Agency (DGA – Direction Générale de l’Armement) and several Italian, Swedish, Spanish, Greek and Swiss governments who have joined the initiative with their related industrial teams: Alenia, SAAB, EADS-CASA, Hellenic Aerospace Industry (HAI) and RUAG. The single-engine, long-range unmanned bomber not only has the

ability to carry and release nuclear weapons from an internal bay, it also has capabilities for detection, localization, and reconnaissance of ground targets whilst in automatic mode - relying on an advanced stealth airframe design to penetrate undetected. With the US undoubtedly the world leader in fighter drone technology at present, it's hoped that the Frenchled consortium will demonstrate the maturity and the effectiveness of European technical advancements (the German-Spanish funded EADS Barracuda and England’s Taranis represent other notable efforts). Whilst nEUROn itself will not be going into serial production, it will be used to pave the way for a future commercial product, based on technologies that have been developed during the programme.


JETS 2013


Phenom 100

For its capabilities and cost savings the Phenom 100 is one of the best entrylevel business aircrafts you can buy. The Phenom 100 can fly as many as six passengers and their luggage 1,000 miles non-stop at a speed of nearly 450 mph (the jet’s maximum range is close to 1,400 miles with four passengers; capacity is eight passengers). With fuel burn significantly lower than 100 gallons per hour, the Phenom 100 is also an attractive choice for regional charter providers (Southern California–


based JetSuit’s 13-jet fleet is composed entirely of Phenom 100s). The aircraft is fitted with two rearmounted Pratt & Whitney Canada PW617-F turbofan engines, that produce a maximum speed of 722 km/h,449 mp/h. The 100’s popularity means that the jet is operated by private individuals, companies and military operators in locations all over the world. Price: approximately $3.5 million,

Fun... | JETS

Embraer Legacy 650

Already the world’s third largest aircraft manufacturer and a leading force in aerospace technology and innovation, Embraer entered the executive aviation market in 2000 when they introduced the Legacy, and you could say they’ve thoroughly embraced the personal jet age. Built on the same platform of Embraer’s regional jet the ERJ 135, they took the fuselage of their 37-passenger regional airliner, developed a purposebuilt executive interior (including the largest baggage compartment of any bizjet at the time) and increased its range to meet the needs of the super-midsize

market segment. An executive jet is a business tool, so Legacy 650 provides the perfect work environment. Wi-Fi connects easily to the High Speed Internet easily, so you can make and receive calls via VoIP, transfer large files and video stream. Alternatively you can make calls via the Iridium satellite phone. The Legacy has an enviable flying range - it can take you from Dubai to London, or London to New York and back again, no sweat. Price: approximately $29.5 million,


JETS 2013



Cirrus has been a consistent leader in producing aircraft that embrace 21st century technology, not only due to advancements in carbon-fibre construction but because of their development of aircraft with impressive aerodynamics, navigational tools and interior comforts. Hotly tipped as a pilot’s dream plane, the iconic SR22T has all the power, the prestige and available extras you can expect from the Minnesota-based Aircraft Corporation. It’s a more powerful version of the Cirrus SR20, with a larger wing, higher fuel capacity, and a 310 horsepower engine - the ‘T’ stands for turbocharged - which means whilst maximum range


is slightly reduced from 1,170nm to 1,046nm, the Continental TSIO-550-K 315 HP Engine can power an increased maximum cruise speed of 214 knots (396 km/h). The fun part is that with Cirrus Xi package, when you buy a Cirrus SR22T you can totally individualise it to your liking - working one-on-one with your personal Xi Specialist, to tailor your plane to your exact specifications and preferences for materials, colors, designs and more. Approximately $544,900.

Fun... | JETS

Vision SF50

If flying is a serious passion, then imagine where life can take you when the Vision SF50 makes it’s hotly anticipated debut in 2014. Originally developed under project name ‘The Jet’, the Cirrus Vision SF50 has been designed to fill the niche between the piston single and twin jet and the Very Light Jet (VLJ). Ever since deposits started to be taken in 2006, hopes for it’s production have been clung to by enthusiasts, and the Minnesota-based company is dedicated to bringing the SF50 to the masses Cirrus secured an injection of Chinese investment approximating $150 million in 2012 and the 2014 launch date looks to be on the cards. Powered by a single FJ33 Williams

International engine, the SF50 is able to carry up to six passengers and one pilot at a maximum cruise speed of 300 knots and a range of 1,000nm (1,850km). Whilst Cirrus freely admits that the Vision jet might be the ‘lowest’ and ‘slowest,’ it’s unique ability to bring the thrill of a jet within reach of a wide audience means that demand is huge. The Vision is technologically advanced, yet engineered to be simple to fly, so it allows owners more lifestyle pursuits than any other personal aircraft - pilots require no multi-engine rating and it represents the next logical step for those already acclimatized to the Cirrus SR20 and SR22 series. Approximately $1.96 million.



Fun... | YACHTS

THE ELEVATOR YACHTS FOR 2013 They say the two happiest day of a yacht owners life are the day he buys it, and the day he sell it. By that logic, we think you should buy and sell lots of yachts, that way you’ll be truly happy – with loads of boats! To get you started, we present you with some of the most interesting ships on the market.




Maltese Falcon

Considered by many to be the finest sailing yacht ever built, the Maltese Falcon (a gargantuan 88 metres, 289 feet long), has a revolutionary Squaresail-system that sets a new milestone in yachting history: it has three self-standing and rotating masts hosting 15 sails making the total sail area an incredible 2,400 metres squared (25,791 square feet) – all of which can be hoisted and furled with just a push of a button. Maximum speed is 25 knots and range is 4,000 nautical miles, which means the super cruiser can cross the Atlantic in just ten days making the Falcon the ultimate charter vessel. Armed with an arsenal of toys and tenders that


include two jet-skis, Sea-Bobs, Laser sailing boats and windsurfer’s, this 12-berth beauty is stocked with every luxury, gadget and sleek interior detail that $130 million can buy. You can even watch movies projected onto one of the sails. A true conversation piece, the Falcon’s sleek design and sharp artistic contours are recognised wherever she sails, whether that be in Sardinia or Saint Barts. The Falcon is a superyacht that delivers. Charter for $400,000-$420,000 p/w.

Fun... | YACHTS


From the outside the superyacht has classically beautiful looks, with its smart blue hull and sleek teak decking. But on the inside Sherakhan is a yacht that’s been designed for some serious entertaining. The luxurious dining room for 22 guests, hosted in a 7-metre Atrium that’s bathed in natural light which filters down through a glass bottomed, 18-person Jacuzzi, makes for quite a dinner setting. The crew will provide an itinerary according to guests tastes – whether that be a day of outdoor exploration or relaxation in the spa room. There are even professional musicians on-hand to

serenade your guests on the ship's harp and Bechstein grand piano. Sherakhan has a beauty salon, gym, an outside barbecue area, sauna and 9 suites - the names of which are all well known authors (each has an appropriate book or two inside). On board are all the toys a sea-lover could play with, from a Laser sailing-boat and 8-metre tenders to a floating trampoline. Flexible and spacious, Sherakhan is the ultimate go-anywhere explorer. From $395,000 p/w and for sale for $29,900,000, available through Y.CO


40 Signature Series

The 40 Signature Series is a new concept superyacht, for a new generation of yacht owner. Built by prize-winning Italian boat-maker Rodriquez Cantieri Navali, she was designed by Architectural firm Norman Foster and Partners which means the boat turns typical yacht building on its head. Designed with maximum space, light and views in mind, Foster and Partners have reinvented the basics to create an innovative and ultracontemporary space. With square, cleanlined furnishings and acres of windows, it will appeal to those who want maximum amounts of sunlight. The other unique benefit offered by the 40 Signature Series is its fractional ownership program - a lifestyle scheme that includes all the benefits of sole ownership but without the hassle, and at a fraction of the cost. YachtPlus has created a fleet of these craft and marketed them under the program, which limits 8 people per vessel. Each shareholder has guaranteed access for 34 days per year with all the trappings of a luxury yachting vacation catered for. Accommodating up to 12 guests and 7 crew, the boat cruises at 16 knots thanks to two 1,044 kw Caterpillar C32 diesel engines. The 41-metre (135 ft) yacht offers 5,737 square feet of useable living space (with extensive outer deck area including a submergible beach deck, a grand staircase and separate jet ski storage) so there's plenty of opportunity to relax and enjoy the panoramic views. To buy, fractionally from EUR1,850,000 (for an eighth share and an 8 year contract),


Fun... | YACHTS Parsifal III

Another beauty from luxury Italian yacht-builder Perini Navi, the sleek, clean-lined Parsifal III is one of the most stylish sailing boats you can buy, thanks in part to the Remi Tessier-designed interior: streamlined and minimalistic, the polish of the dark ebony woodwork contrasts with the fine furnishings of light sycamore, stainless steel and cream leather. But Parsifal III has been built for

speed as well as style - with her finned bulb keel and 2,800 square metres of sail, which whiz the boat to speeds of 12.5 knots, she’s one of the fastest sailing yachts Perini’s ever built. What's special about this 54-metre sailboat is the extra space it has for sunbathing and entertaining: endless pale decks offer pockets of privacy, with a comfortable chill-out area on the Aft Deck that at night transforms into dining for up to 16 guests. Not to mention the plunge pool, cocktail bar, Japanese Teppinyaki-style barbecue, and all the recreation amenities and toys you can dream of. Charter from about EUR198,000 per week,,



Superyacht Aquarius was built by famous Dutch shipyard in 2007 as My Shanti before being renamed. Terence Disdale is the name behind the beautifully executed exterior and interior design, and he created an oasis of calm. His signature bleached oak paneling is found throughout the cabins, with neutral natural fabrics that create a relaxed and tranquil dĂŠcor. An already impressive feeling of space is enhanced by giant circular windows. Disdale cleverly placed the full-beam master stateroom, with office and study, on the main deck forward, providing all round vistas, and fitted 9 separate suites to accommodate 18 overnight guests. With a range of 5250nm, Aquarius cruises at a


steady speed of 15.6 knots but can easily reach a maximum of 17.5 knots. The yacht features a gym, large bar, floating trampoline, outdoor dining for 30, a glass-enclosed sky lounge, and an optional touch-and-go helipad. Avid film buffs can enjoy a 62-inch flat-screen monitor with surround-sound in the main saloon – so big it becomes a partial room divider when raised. For details contact Edmiston Monaco: Tel +377 93 30 54 44, Monaco@

Fun... | YACHTS


Given the name behind her design, superyacht Candyscape is as spectacular as you might expect. Built in 1994 by Italian shipyard Benetti, the neutral interiors tare a breathtaking combination of 21st century chic and 1930s glamour of the highest quality, by world-renowned interior designers Candy & Candy. At 62 metres (203 ft), Candyscape may not be the biggest on the market, but it’s the dazzling extras and outstanding attention to detail that mark this boat out as one of the greatest. Featuring leather walls, gold marble floors and a glass lift, artwork and sculptures adorn the dining saloon. Additional touches include the dining table that becomes a roulette table, a transparent grand piano, and a master cabin with 180-degree panoramic views and marble bathroom. The sun deck is an incredible space that

extends to nearly half of the boats length. It features a dining area for 12 guests, an elegant bar and a rotating sun bed that tracks the sun despite the movements of the yacht. At the press of a button sun worshipers can be swathed in a cooling water mist. In the bridge, the rosewood and Italian leather were selected by the Candy brothers and the choice of hardware was left to the captain, who specified a system by Norwegian navigation specialist Kongsberg and Rolls-Royce. Candyscape II’s media room is equipped with a fully integrated entertainment system. The split-level master suite shares a private gymnasium with the VIP cabin. Entertainment, exercise and sleep – Candy & Candy style. For details contact Edmiston Monaco: Tel +377 93 30 54 44



Fun... | TRAVEL

THE ELEVATOR GADGETS FOR 2013 The technology industry has gone mainstream, it’s penetrated our daily news, our entertainment. The editorial team here at The Elevator are self confessed gadget freaks, and we’ve been scouring the shows to bring you some of the most exciting items of the year.




Fitbit Flex

The Basis Band is a clever little piece of wrist-operated kit that gives powerful insights into your daily health and fitness routine and means you can easily keep track of your stats. Rather than throwing unmanageable weekly goals at you, it suggests daily targets that adapt to your lifestyle - powering things up when you’re doing well and calming them down if you’ve had a particularly tough week. The Basis looks sleek but beneath its polished surface lies some serious technology. It contains the most advanced sensors on the market, continuously capturing heart rate patterns, motion, perspiration, skin temperature and sleep quality, throughout the day and night. To make it even simpler it does all this automatically, so you don’t need to fuss around with ‘modes’ or programmes. It just works. Info at

Fitbit is entering the health race with its CES-launched Flex band. The ingenious device captures actual steps taken without capturing “steps” from everyday hand motions, like typing, gesturing, or even eating, and allows you to set goals, track your activity, sleep trends, log food, workouts, and more. And like with all Fitbit trackers, you can earn badges, connect with friends to share and compete for extra encouragement. Integrated LED lights indicate how calories burned and active minutes stack up to personal goals. Stats are wirelessly uploaded in real time, directly onto iPhone and Android devices - so you can see your stats anytime. Syncing with the Samsung Galaxy SIII and Samsung Note 2 will commence in late January/ early February 2013 with more devices to follow. More info:


Fun... | GADGETS


Since it’s debut at CES in Vegas this year, there’s been quite a buzz surrounding the Hapifork. And we mean that literally. Amongst the deluge of increasingly complex health innovations such as heart monitors and motion detectors that seem to be on everyone’s radar, this little gadget sums up weight loss in it’s simplest form – when you eat more slowly, you consume less. Essentially a quirky electronic fork that monitors eating habits, it not only times how long it takes you to eat a meal, but by knowing when the fork is lifted to the mouth it also checks the rate at which food is eaten. An

LED will blink at you with concern if the HAPIfork thinks you're eating too fast. The helpful utensil is sold as part of a ‘HAPI family’, which includes two additional gadgets, the HAPItrack (measures steps, distance, workout time, calories burned and motivates you to reach your daily objectives) and the HAPIwatch (monitors your sleep and stress patterns and measures your heart rate). A Bluetooth-equipped edition which can be paired with a mobile device is apparently set for later in the year. For more information visit their website:



Apple ‘iTV’


Ever since Steve Jobs spoke of an integrated television set to his biographer, Walter Isaacson, that ‘could be seamlessly synced with all of your devices and with iCloud’, Apple’s ownbrand HDTV has been vehemently anticipated. Yet the alleged smart television has so far remained shrouded in mystery - and considering the barrage of leaked information and images that preceded 2011’s iPhone 5 and iPad mini launches, we’re unlikely to be witnessing any announcements in 2013, let alone 2014. Rumours were quickly refuted that testing had already begun at Foxconn in New Taipei City (the world's largest maker of electronic components) and that Apple might be working with Sharp on the TV’s design and display. But believers have remained undeterred. Info:

Whilst a home-heating control might not usually generate much excitement, bear with us because the Nest is no ordinary thermostat. It’s been dubbed ‘the iPod of thermostats’ and looking at its sleek, smart design, it’s easy to see why. That, and the fact the design team behind Nest’s elegant features is led by Tony Fadell - an ex-Apple employee who headed the iPhone and iPod division and is one of the most sought-after technologists in gadgetry. Nest not only has the power to save you energy and significantly improve the environment but it also has a canny ability to learn and adapt to people's lifestyles - saving the average user almost 20% of their annual energy bill – which has already grabbed attention from investors. You can communicate with the Nest wirelessly from your smartphone for peace of mind when you’re away. For info:


Fun... | GADGETS

Samsung T9000 LCD Fridge

The 32 cu. ft. capacity Samsung T9000 Four-Door Refrigerator is the next evolution in refrigerator design and it’s the ultimate kitchen appliance for home entertainers. Not only does it have a 10-inch LCD display with the Evernote app built into the Linux-based OS, so the connected household can quickly update a shopping list when looking in the fridge or pull up recipes to reference while milling about the kitchen, but it’s also possible to share photos, videos, and even recipes with family and friends. The LCD display includes calendar and weather apps, and

more, to help families stay organized and connected in the kitchen. The 9000’s Triple Cooling system ensures optimal temperature and humidity control in each of the fresh food zones with the help of two compressors, three evaporators and an array of sensors to keep produce fresher longer. Sadly Samsung has not announced pricing or availability yet for the LCD version, but the touchscreen-less edition of the T9000 will set you back $4,000 when it ships this spring. Available in late Spring 2013 for an MSRP of $3,999,



The Cube

Raspberry Pi

Celluon’s Magic Cube is the latest in virtual keyboard technology. The ultra-portable device laser-projects a full size keyboard onto any flat surface - so you can connect via Bluetooth and get typing, with just a flick of a switch. Compatible with any device that has Bluetooth HID support, you can also plug-n-play with Windows and Mac OS devices via USB connection. Its rechargeable battery lasts for 150 minutes of continuous typing accompanied by a satisfying click when pressed, to acknowledge input - and can be recharged using a USB with no drivers to install. With 63 keys, full size QWERTY layout, and a detection rate of 350 characters per minute, the virtual keyboard approaches the typing speed of a standard keyboard, but in an easily portable size - just slightly larger than a matchbox.

For what’s essentially a low-cost, credit card size PC, the somewhat unconventional Raspberry Pi has turned into a world-scale masterstroke. Invented by a British foundation, it was designed with the intention of teaching computer programming in school, but its versatility has instantly catapulted the Pi into the global marketplace. The Pi is an exposed circuit board - all you need to do to get started is plug in a mouse, keyboard and screen and you’re away. But don’t be fooled by the its unassuming design - the gadget is a near-perfect platform for some of the most fun and interesting hobbyist projects in the computing world. It’s release caused such a manic reaction that both licensed webshops were ‘brought to their knees’ during the launch, from buyers furiously trying to refresh their screens. The mini PC contains a 700 Mhz Linux processor, 512MB of RAM, USB, HDMI, SD storage, composite RCA video outputs and 3.5mm audio ports. But what exactly does all that do? Depending on what you want to create, the possibilities are endless. You’ll need to invest in all the additional kit required for each task (such as thermal printers, LEDs, solenoid valves, media software, speakers, SD cards, microphones etc), but once you do you can create anything from a time lapse rig for your camera to a baby monitor, or even a temperature monitor that allows you to brew your own beer (maybe not for the school curriculum, that one). Retail: $42 (£26),


Fun... | GADGETS

CubeX 3D Printer

A year after the launch of their first desktop 3D printer at the Consumer Electronics Show (CES) in Vegas, Cubify has upped its game and released not one, but two machines - their new and improved sequel, the Cube 2 and the larger CubeX - earning them a CES 2013 People’s Choice Award in the process. Featuring a build platform that can handle prints up to 1,030 cubic inches (10.8 x 10.45 x 9.5-inches) - the size of a basketball – with the CubeX you can print toys, jewellery, machine parts and other plastic objects in just a few hours. With three printing modes, three different print-fill densities and resolutions up

to 125 microns, like its lower-priced counterpart, the printer also features the ability to use both ABS and PLA plastics (in 30 different colors). The CubeX brings 3D printing well and truly from the hackerspace to the world of consumer products, from tech enthusiasts and serious hobbyists, to entrepreneurs and educators who want to enjoy the consumer features like intuitive use and reliability while getting professional print quality. Retail: CubeX $2,499, Cube 2 $1,299,



Xbox ‘720’

Pebble E-Paper WATCH

Rumours have been circulating that Microsoft’s next-gen Xbox console will be formally announced at the Los Angeles E3 games exhibition in June 2013 - which means that rival Sony’s latest offering can’t be far away. Ever since Microsoft secured a range of domain names, there‘s been a bombardment of guesses as to what the next-gen name might be, including the predictable ‘720’ and the Xbox ‘Loop’ or ‘Infinity’. Whatever’s chosen, the specs for the new Xbox are nebulous at best. Some analysts are speculating that the ‘720’ will have at least 8 GB of RAM, a revision of AMD’s 7000 series graphics and a quad core CPU. Others suggest features such as HD with 3D capability, an 'always on' mode, energy-saving functions during media playback, and PVR functionality that will let you record TV onto the console.

Even before it was launched, Pebble E-Paper was a groundbreaking smartwatch. Launched via a Kickstarter campaign on April 11, 2012, Pebble had an initial fundraising target of $100,000. Backers spending $115 would receive a Pebble when they became available ($99 for the first 200) - effectively pre-ordering the $150 Pebble at a discounted price. Within two hours of going live, the project had met the $100,000 goal and within six days, the project had become the most funded project in the history of Kickstarter raising over $4.7 million with 30 days still to go. Pebble entered mass production in January with planned production of 15,000 watches per week. If you need to stay on top of things, Pebble can help. On its 1.26inch 144 × 168 pixel black and white LCD display, you can receive vibrating notifications, messages and alerts that include email, incoming caller ID, calendar alerts, Facebook Messages, Twitter and weather alerts. Android users can also receive SMS messages. Notifications can be dismissed with a shake of your wrist (it's easy to disable any notifications you don’t want). Thanks to its brilliant, outdoor-readable electronic-paper (e-paper) display, you can also choose your own personalised watch face design to suit your mood. Water-resistant and charged using a modified USB-cable that attaches magnetically, the battery lasts up to seven days.


Fun... | GADGETS

Google Project Glass

You’d anticipate that a research and development project with such a futuristic name like ‘Project Glass’ to be something pretty special. And by all accounts, it is. Being run by Google X Lab, the brains behind other technologies such as self-driving cars, the programme is dedicated to the development of a head-mounted, augmented-reality (AR) micro-screen – in short, the world’s first ‘wearable display’ specs. Google’s prototype glasses currently have audio output to the right ear only, and there's no ear piece - but according to Google this is because the social gesture of cupping your hand over your ear let’s people near you know that you’re paying attention to the device. The titaniumframe runs the Android operating

system and connects via Bluetooth to your phone. The screen has the ability to show you text messages, emails or map directions. It features an inbuilt camera, multiple radios for data communication, a speaker and microphone, and a gyroscope so the Glass can tell your position and orientation at all times. All this, in a futuristic gadget that weighs less than most sunglasses. Apps are being rewritten to pair up with the new interface, and at the moment phones are still necessary as a second display when more detail or finer controls are required. But there are certain apps that already clearly benefit from a wearable display function, such as a video recording app. Consumers should be able to buy Google Glass by 2014. Info from



Garmin Fēnix Outdoor Watch

polaroid iM1836

The Garmin fēnix is a water-resistant GPS wristwatch that provides paperless geocaching. Designed for mountaineering and outdoor enthusiasts, it cleverly tracks position, stores waypoints (like where you parked the car), and with its inbuilt barometer warns of upcoming weather changes, so you can take your training to the next level. Create your trip data on BaseCamp, the free desktop trip-planning software from Garmin, then load it onto the Fenix and follow the turn-by-turn directions from your wrist. As you move, fēnix records a track log, creating a GPS "bread crumb trail" to show you the way home. You can create and follow routes, mark up to 1,000 waypoints and store up to 10,000 track points. Retail: $449.99,

Dubbed as the world’s first Android camera with an interchangeable lens, Polaroid’s 18-megapixel iM1836 gives professional-quality results without the cost and complexity of a professional system. With its choice of materials (what looks like a red metallic casing is actually plastic), it translates over to one pretty lightweight camera - compact and ready to capture outstanding images wherever and whenever they happen. Featuring a 3.5” capacitive touchscreen LCD display and a fast and fluid Android interface menu, you can simply point and shoot great photos in a snap. Built-in Wi-Fi and easy-to-use photo sharing apps let users instantly upload images and share them via Facebook, Twitter, YouTube, Flikr, Vimeo and more, all at the touch of a button. When Wi-Fi isn’t available, built-in Bluetooth connectivity pairs the camera with any Bluetooth-enabled device to upload images and video through a mobile phone, PC or even iPod Touch. If the action calls for more than just a still image, the iM1836 also captures 1080p HD video. Plus, the built-in HDMI output turns this compact device into a multimedia player—just connect it to any TV or monitor to create your own video or photo slideshows. Retail: $399,


Fun... | GADGETS

Zeal iON HD Camera Goggle

Forging the way for technologically savvy ski goggles, Colorado-based company Zeal has developed the iON highdefinition camera goggle - designed for capturing adventures on the slopes without ever having to take your gloves off. The in-built 170 degree wide-angle camera takes 1080p HD video, captures sound, and can shoot up to 8 megapixel photos with no compromise to performance or style. It instantly autoadjusts to changing light conditions, and

with anti-fog UV optics and an infinite focus, Zeal’s latest goggle is set to change the way people use POV cameras, forever. Featuring an easy to use playback mode and control placements, it’s simple to watch footage, set up sequence or timelapse shots, and integrate with all social network channels such as Facebook, Twitter and Instagram to instantly share your memories as you’re creating them. Retail: $399 (approx £250), information at:



Fun... | WATCHES

THE ELEVATOR WATCHES FOR 2013 People say time is money – and we agree, watches can not only be great investments but beautiful pieces of equipment. From our base in Switzerland we get to live amongst some of the most skilled manufacturers in the world. In this edition of The Elevator we bring you a selection of stunning timepieces.




Breguet Classique Grande Complication 5317

For a brand dedicated to the values of tradition, art and elegance, Breguet is still able to impress avid watch collectors with cuttingedge techniques, and the Classique Grande Complication 5317 pays stunning tribute to their magnificent 200-year-old watchmaking traditions. On June 26th 1801 (or rather on 7 Messidor Year 9, since the Republic calendar was still in force at the time), the French Minister of the Interior awarded Abraham-Louis Breguet a patent for the invention of the tourbillon - their ingenious and complex feature, designed to improve accuracy. It was essentially a new type of regulator that held the entire escapement inside a robust mobile carriage that reduced the effect of gravity on the rate of the movement. It was one of the most challenging mechanisms to make but to this day remains an immensely beautiful feature on the watch face.


The Classique 5317's self-winding movement is engraved by hand, and its precision-enhancing beat frequency is powered by a 587DR movement that delivers a very respectable 120 hours of autonomy with a 5-day power-reserve indicator. Staying true to the essence of Breguet's original features, the brands secret signature is etched into the silver between the numerals and Breguet's legendary "moon" tip watch hands are a distinguished component of the beautifully balanced dial. Retail: approximately $123,000, information from

Fun... | WATCHES

Patek Philippe 5204P

Patek Philippe is Geneva's oldest independent family-owned watch manufacturer. All watches are designed, crafted and hand finished in their workshops - and their impressive credentials go without saying. But the soon-to-be-launched classic Ref. 5204p perpetual calendar goes beyond impressive. The split seconds chronograph is powered by a Caliber CHR 29-535 PS Q - a highly complex, in-house movement - and a Gyromax balance that beats at an astounding 28,800 bph (4Hz). It is manually wound and has a 65-hour power reserve. Instead of Arabic

numerals, the 5204P features gold baton markers with luminescent fills. It has also updated the isolator system with a new "swan-neck" version for controlling the split seconds hand. The 5204P manages to combine the best of modern watch making with a pictureperfect reflection of the model's very beginnings - and their new iteration is a winner for sure. For such a complex watch the dial is clean, easy to read, and just flat out beautiful. The larger 40mm case alone should keep some collectors up at night, awaiting its arrival. Retail TBC (estimated $312,000$350,000),




Panerai Radiomir 10 Days GMT Platano

Officine Panerai are the unrivalled leaders in the over-scaled luxury watch market, and with a super-sized 45mm polished platinum case diameter, the limited edition Radiomir 10 Days GMT Platano is no exception for the iconic brand. Originally developed to withstand the toughest conditions for the Royal Italian Navy in 1936, Panerai's Radiomir is now considered one of the world's classic watches. Since revealing its own in-house movement a few years back, their considerable investment is already seeing


the pay-off. The automatic mechanical Panerai P.2003 calibre movement boasts 28,800 alternations every hour. The watch also features their KIF Parechoc anti-shock device and the power reserve lasts up to 10 days. The Radiomir 10 Days GMT Platano is hand-crafted from polished platinum and features a see-through crystal back panel, black dial, tan alligator skin strap and an 18-carat white gold buckle. Even better, only 99 other people in the world will ever own the same one. Retail: $15,900.

Fun... | WATCHES

Bremont Victory

With the limited edition Victory watch, Bremont has not only created an horological masterpiece that illustrates the passion and precision you’d expect from the British-born brand, it’s also built a detail into its construction that links with its naval provenance. Inlaid within the case back is original oak timber from the HMS Victory - Lord Nelson’s flagship at the battle of Trafalgar in 1805 and the oldest naval ship still in commission. Hand-engraved copper from the battleship has also been worked into the inner barrel construction with exquisite detail. With it’s elegant sapphire crystal face,

sweep chronograph seconds and balancing retrograde seconds and date hands, the watch has a crisp, clean construction that conveys the high-level expertise that’s gone into its execution. The Trip Tick case comes in a choice of hardened stainless steel or 18-carat rose gold. Water resistant to 100m and with an Incabloc shock absorber and 46-hour power reserve, the brand remains true to its original principles of durability, legibility and precision. As limited edition watches go, this heritage piece is like no other. Retail: £11,995,




Ebel X-1 Gent

New for 2013, Swiss luxury watch brand Ebel has released their men's 43mm X-1 Chronograph. Coolly monochromatic in contemporary grey, it has a chic masculine design but with a modern unisex appeal. The X1 name is inspired by the brands founding in 1911 in La Chaux de Fonds Switzerland by Eugene Blum and Alice Levy and the contemporary design looks to the future while paying tribute to EBEL’s rich legacy. Housing a precisely engineered Swiss quartz chronograph movement,


and water-resistant to 200 meters, the grey galvanic dial features a unidirectional rotating bezel and an antireflective scratch resistant sapphire window over the dial. Its wave-shaped links, an EBEL signature, are created in stainless steel with an optional grey PVD coating. Luxurious and playfully sportive, the X-1 Chrono is an innovative design of iconic inspiration. In stainless steel - £2,000, in stainless steel with grey PVD - £2,300. More information online at

Fun... | WATCHES

Vacheron Constantin Historiques American 1921

As one of the world’s most prestigious watch brands, Vacheron Constantin’s pedigree and recognized cachet is without question. The Historiques American 1921 is an updated version of their original tilted cushion-shaped watch - proving that even the most timeless of timepieces can benefit from the occasional upgrade. A driving watch that could be read at an angle whilst holding a steering wheel, the 1921 was originally created for the North American market during the Roaring Twenties, when the US economy boomed and was a major influence on the Swiss brand’s success. It was

a time of luxurious excess and stylistic flourishes and this clearly shows in its elegant art-deco lines. Beautifully proportioned and immaculately detailed in 18ct pink gold, with Arabic numerals that have a bold clear contrast for legibility, the gold tang buckle features Vacheron’s distinctive halved Maltese cross - a symbol that was originally inspired by a component in the watch barrel. Since the line was re-launched in 2005, in each year since Vacheron has added a new vintage style to the collection. Retail: $34,900, information from




Rolex Oyster Perpetual Submariner 2012

Rolex’s iconic diver’s watch, the Oyster Perpetual Submariner, has had an impressively innovative facelift, proving that the big players clearly wish to continue expanding their know-how with improved complications, whilst creating a thing of beauty that tugs on the heartstrings of horological enthusiasts. Sporting a redesigned case, the rotating bezel is now equipped with a black insert made from Cerachrom - a ceramic material that’s non-fading, corrosion resistant and virtually scratch proof. The date window has been dispensed with and the sleek black dial has luminescent Chromalight hands and hour markers that emit a long-lasting blue glow that offers exceptional legibility even in the dark. The 904L steel, solid-link Oyster bracelet has a new glidelock safety clasp which allows super-fine adjustments in increments


of 2 mm with no tools required. Just in case you wish to make like the watch's original water-bound wearers, you'll be pleased to know archetype of the diver’s watch is guaranteed waterproof to a depth of 300 metres (1,000 feet). It also boasts an in-house chronometer with a Rolex-patented alloy that is unaffected by magnetic fields - which means that stability and precision are maintained when subjected to temperature variations and shocks. Retail: $7,500,

Fun... | WATCHES

Breitling Bentley Supersports Chronograph

In an exclusive partnership with the luxury British carmaker, Swiss brand Breitling has created a series of limited edition designs that pay homage to the Bentley Continental Supersports - the fastest and most powerful car in their range and holder of the world land-ice speed record. Powered by a fully in-house developed Breitling automatic movement that beats at 28,800 VpH, the watch was designed with Breitling’s 'pro tools' enthusiasts in mind. Secured by a stainless steel Bentley Speed Bracelet and water resistant to 100m, it features red-arrow-tipped, centremounted hand for its 60-minute counter,

and tallies up to 12 elapsed hours on the sub-dial counter. It also boasts a variable tachymeter that is activated via the bezel - a feature that measures average driving speed - no matter how much time has elapsed, distance is covered or maximum speed is reached. Adorned with the knurled motif typical of Bentley dashboard controls, only 1,000 pieces have been created in each Supersports Chronograph colour (available in blue, orange or white), with a red series produced to accompany the launch of the Bentley Continental GT V8, only 250 of which were created. Retail: ÂŁ7,720.



Fun... | WATCHES

THE ELEVATOR WINES FOR 2013 Taking time to enjoy a good drop of wine is vital - especially when you're living life in the fast lane. In this edition of the Elevator magazine, we've pitted some of best known wine making countries against one another. Who really is making the best wine at the moment?


WINES 2013


1990 Jaboulet La Chapelle Region: France

This sultry wine has a very ripe fruity nose and a perfectly balanced acidity. It doesn’t need to rely on a French label to boost its ratings and has been a popular choice amongst wine experts in recent years. The 1961 vintage is a genuine classic and has commanded prices of $150k and above for cases at auction, but


you don’t need to dig quite so deep and a 1990, which is still an excellent year, is much better value at around £200-$250 a bottle. Whether you’re choosing to drink or lay down, this is unlikely to give you any nasty surprises.

Fun... | WATCHES

1978 Diamond Creek Lake, Cabernet Sauvignon Region: USA

A wonderfully smoky and dark fruity taste draws you in and leaves you in no doubt that this is a real gem of a red. I’d recommend a blind tasting with friends and I’m sure you’ll shock, or at the very least surprise a few there. The vineyard is less than ¾ of an acre and is the smallest of the Diamond Creek vineyards. They don’t produce and bottle

every year, but it’s worth the effort if you can search out a bottle. In years where the wine isn’t made they blend the grapes elsewhere which in my mind gives some assurance that they’re discerning and very meticulous in their release. Expect to pay around $100-$120 a bottle and it’s still fairly readily available.


WINES 2013


2010 Gaba do Xil Mencia Valdeorras Region: Spain

Possibly my favorite Spanish wine in quite a while. The Spanish are meticulous in their growing and tending and this really comes through in the consistency of this red. It holds a lively floral aroma and the taste is creamy and light on the back of the palate. On paper this wine should be poor quality as the grapes are grown at altitude


in poor soil conditions, but with manual processing and careful quality control this vineyard seems to have created a silk purse from a sow’s ear. Widely available and at around $10 a bottle it’s a great buy for stocking up and sharing as it has the appeal of a price tag 10 times higher.

Fun... | WINES

2006 Sadie Family, Palladius Region: South Africa

South Africa has never been known for quality wine, with perhaps a few mid market (and very good) exceptions. The whites are generally tart and the reds bitter but there are some great wines coming out of South Africa if you can look past the noise. Sadie Family wines are widely regarded as some of the best in the world and you’ll see them cropping up again and again in the usual ‘Best of’

type lists despite their relatively recent arrival, having been set up in 1999. The western Cape is starting to build a reputation for good wines and this is a great vintage to start with if you want to learn about what’s there and explore the best South Africa has to offer. For less than $40 a bottle you’re buying a bottle that would retail at over $200 if it had a European label.


WINES 2013


2010 Quinta do Crasto, Douro Red Region: Portugal

In many ways this is the real odd one out of my picks here. This is a traditionally styled and blended wine drawn from 4 grape varieties. The locals know how to make the best of these composites and the end result is a spectacular, intense, vibrant and ripe aroma of raspberries and blackberries that bursts onto the palate.


Perfect with spicy foods and holds its own against strong food tastes, this one ought to be a staple in any decent and wellstocked cellar. You can pick up a bottle for less than $15 and I’m making no excuses for dropping in lower price wines like this amongst those in the $200-$750 bracket.

Fun... | WINES

2009 NV South Ridge, Blanc de Noirs Region: England

Those jolly Brits aren’t well known for their wine and for good reason. There are very few places grapes can be grown outside of the extreme south east and the climate is not conducive to a good harvest, yet they persevere. A freak hot summer in 2009 brought with it a great harvest and probably the best

English wine I’ve tasted. There’s a cult like following (mainly by the Brits themselves) but it’s worth getting a few bottles in, if only for the novelty value. It’s not one to lay down long term, but should be good for another 3 years and bottles are retailing at around the $40 mark, which is fine for a little fun fizz.


WINES 2013


2005 Torbreck, The Laird Region: Australia

Undoubtedly the daddy of Australian wines, the last and the best of my picks today. It’s easy to see why so many people are fans of this label and The Laird has never failed to excite me. This shiraz is one of the finest I’ve ever tasted and has


a concentrated essence of flavors from ripe dark fruits to cocoa and sweet hoisin. If you haven’t tried it then add it to your ‘wine bucket list’ immediately. At around $1,000 per bottle it’s a snip and perfect for celebrating a windfall..

Fun... | WINES

2006 Casanova di Neri Brunello di Montalcino Cerretalto Region: Italy

Our racy Italian entrant is a real delight. It holds ripe aromas of sandalwood, fruit and flowers and has the most poetic tannin balance that leaves you with a long lasting and creamy after-taste. This one has had some great reviews and has been selling well as a real classic vintage. Italian wine, for me, can rival French wine

on any day and is frequently overlooked. There are some treasures from Italy and this is one of the best. At $250 a bottle it’s good value and is more likely seen in restaurants with a well-stocked cellar so keep your eyes open.


GLOWBALACT Glowbalact are tackling a problem that cannot be simply left to the overstretched resources of governments and NGOs.

IT’S APPALLING TO THINK THAT HUMAN trafficking still exists on a large scale. The idea that people are routinely sold and exploited by means of forced labor, sale of human organs and, more frequently, the global sex trade is frankly inconceivable. It’s an often overlooked problem with many of us oblivious to its full extent and the misery caused. Tackling this problem cannot be simply left to the overstretched resources of governments and NGOs, it will take far more of an effort and a concerted campaign to shine the brightest spotlight on this issue. Traffickers will often prey on the poorest and most vulnerable, operating not only out of third world countries but any poverty stricken areas where people are desperate to take any lifeline. Glowbal Act exist to tackle this problem and assist these overstretched NGOs on the frontline with vital 222 | ELEVATOR MAGAZINE


More than 30,000 women have disappeared without a trace, believed to be sold into the sex industry

support and funding. Their remit is to campaign for public awareness so that we can all choose to make a difference. Moldova is the poorest country in Europe and over 50% of the labor force have left the country in the last 10 years through a lack of available work. More than 30,000 women have disappeared without a trace, believed to be sold into the sex industry. These are frightening statistics and this is why Glowbal Act partnered with New Hope, a local organization, to help tackle this problem at its very roots. The project brings young and vulnerable women into loving homes as protection and taught valuable life skills. These are the kinds of preventative measures that will make a difference and Glowbal Act need more support and every donation will make a difference to someone’s life. Information from:

Philanthropy | KID & GLOWBALACT

KIDS IN DISTRESS This charity is all about giving young children the opportunity to fulfill their potential away from repressive environments.

KIDS IN DISTRESS (KID) IS A FLORIDA based charity which aims to help children who have been neglected and to prevent child abuse wherever it exists. The charity began its life in 1979 as an emergency shelter and has grown into a 5 acre campus offering shelter for children from as young as new borns up to 15 years of age as well as counseling services. The bulk of the work is community based and the charity works within local communities to help educate young parents and assist with any issues of domestic violence or neglect. More recently the charity now offers dental and optical care for children from families below the poverty line, which is an increasing demographic in the local population. Amongst the many preventative programs

carried out by KiD there are also ongoing activity programs for children including preschool, after school and summer camps all with the purpose of rebuilding the confidence and reducing the feeling of vulnerability for these children. Giving young children the opportunity to fulfill their potential away from repressive environments is possibly one of the most satisfying causes we can subscribe to. KiD currently assists more than 7,000 children and families each year and funding comes from a mixture of government, municipal and private benefactors. Donating is easy and there are a variety of options from single donations to monthly commitments, in-kind donations and even gifts of stocks or securities. Information at


KiD currently assists more than 7,000 children and families each year


K-9 ANGELS We profile this UK based charity with a mission to help stray dogs in Romania, Bulgaria and Algeria as well as battling the victims of the dog meat industry.

FOR DOG LOVERS, AND THAT’S ME included, it’s heartbreaking to see how these animals can be so poorly treated in some parts of the world. K-9 Angels is a UK based charity with a mission to help stray dogs in Romania, Bulgaria and Algeria as well as canine victims of the dog meat industry in Thailand. The founders felt that having seen these situations first hand that not enough was being done and set about creating a network to match these dogs with prospective new homes in the UK. The charity provides veterinary services on 224 | ELEVATOR MAGAZINE

the ground as well as setting up neutering programs to control the local wild populations. You can help K-9 Angels in a number of ways, either by donating much needed funds, donating food or veterinary supplies or by adopting a rescue dog, and all the expected checks will need to be carried out beforehand as K-9 Angels have a rigorous process to complete before any dog can be safely rehomed. You can visit the website or the Facebook page to see dogs currently in need of a loving home .

GIVE DIRECTLY This bold charity gives people a direct way to donate. Send money via their site and GiveDirectly transfer this straight away, through a cell phone transaction.

IF ONE OF YOUR OBJECTIVES IN charitable giving is quantifying the direct impact of your donation then Give Directly is a great way to get the transparency you’re looking for. This charity operates in Kenya by directly alleviating the poverty of individuals and families. The concept is a simple one, you donate via their site and they transfer this through a cell phone transaction to M-Pesa. The chosen recipient receives a text message to notify them that a payment has been made and they then visit their local M-Pesa agent and transfer the funds via text message to receive the cash, and off they go. The evidence in favor of this kind of direct poverty alleviation is growing in strength and Give Directly are carrying out their own studies to back 226 | ELEVATOR MAGAZINE


The concept is a simple one, you donate via their site and they transfer this through a cell phone transaction to M-Pesa

this up. Their operating costs are minimal and every recipient is 100% manually selected and verified as being in genuine need. The average household lives off $0.65 in the poorer regions and there’s strong evidence to show that this kind of direct donation has a remarkable success rate and long lasting impact. Often it’s a case of the charity giving $1,000 over 1-2 years and findings show that in the vast majority of cases this is used for food, improvements to shelter and the purchase of land or livestock to generate an income. It’s a great success story and proving the skeptics wrong on every possible stereotype so let’s hope this takes off and encourages more of us to directly help our fellow man in need. More information at


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CONTRIBUTORS eddie bovingdon, ben harries, andreW green obe, chris West, al fox, Julian de feral, vanessa threapleton-horrocks, James harrison, neil davey, david Walston, charlotte semler, William leigh, robert clayman, andre mcleod. ThaNkS patrick gruhn, steven york, bruce saWford, indra thamrin, andres reynaga, mike slade, bryce aime, ali silk, alan Jones, car 64, dave unWin, Jeff zaltman, anders broggard, graham ballett-young. Reproduction in whole or in part without written permission is strictly prohibited. all prices correct at the time of going to press but subject to change. The views expressed in Lusso Magazine are not necessarily shared by the publication or its staff. The publication welcomes new contributors but can assume no responsibility for unsolicited manuscripts, photographs or illustrations. Subscriptions & back issues are available online at Contact Information Lusso Magazine, SWR Media Ltd, 55 Farringdon Road, London EC1M 3JB, United kingdom

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Elevator 20  

The 20th edition of the Elevator magazine