Portfolio | June 2017

ISSUE

138

ANTIQUE INVESTMENTS

THE RISE OF INSTAGRAM

Where to put your money

Facebook’s new Facebook

HIGH-END RESTAURANTS

MANAGEMENT CONSULTANTS

Are they really worth it?

Can they exist in a digital future?

LONDON PROPERTY Investing in the capital post-Brexit

JUNE ISSUE 138

The business of life & living

Exclusive to Emirates First Class and Business Class

EDITOR-IN-CHIEF OBAID HUMAID AL TAYER MANAGING PARTNER & GROUP EDITOR IAN FAIRSERVICE EDITORIAL DIRECTOR GINA JOHNSON GROUP EDITOR MARK EVANS marke@motivate.ae SENIOR ART DIRECTOR SARA RAFFAGHELLO sarar@motivate.ae DESIGNER RALPH MANCAO ralph@motivate.ae SUB-EDITOR SALIL KUMAR salil@motivate.ae EDITORIAL ASSISTANT LONDRESA FLORES londresa@motivate.ae GENERAL MANAGER – PRODUCTION SUNIL KUMAR sunil@motivate.ae PRODUCTION MANAGER R MURALI KRISHNAN muralik@motivate.ae PRODUCTION SUPERVISOR VENITA PINTO venita@motivate.ae CHIEF COMMERCIAL OFFICER ANTHONY MILNE anthony@motivate.ae GROUP SALES MANAGER MICHAEL UNDERDOWN michael@motivate.ae SENIOR SALES MANAGER MICHELLE QUINN michelle.quinn@motivate.ae

Emirates takes care to ensure that all facts published herein are correct. In the event of any inaccuracy please contact the editor. Any opinion expressed is the honest belief of the author based on all available facts. Comments and facts should not be relied upon by the reader in taking commercial, legal, financial or other decisions. Articles are by their nature general and specialist advice should always be consulted before any actions are taken.

All dollar prices throughout the magazine refer to US dollars.

Published for Emirates by

04

Head Office Media One Tower, Dubai Media City, PO Box 2331, Dubai, UAE Tel +971 4 427 3000 Fax +971 4 428 2270 Dubai Media City Office 508, 5th Floor, Building 8, Dubai, UAE Tel: +971 4 390 3550 Fax: +971 4 390 4845 Abu Dhabi PO Box 43072, UAE Tel: +971 2 677 2005 Fax: +971 2 677 0124 London Acre House, 11/15 William Road, London NW1 3ER, UK Printed by Emirates Printing Press, Dubai

FULL OF BEANS P26

The Hong Kong café with a difference

ARMANI.COM - AR 8095

JUNE ISSUE 138

CONTENTS UPFRONT

10

ANTIQUES

Finding value in the antiques market

LIVING

74

14

INSTAGRAM

How Facebook’s gamble paid off

HOTEL

A historic hotel in the centre of Budapest

80

18

SOUTHERN CHARM

A stunning Cape Town house

WHAT TO PACK

From Madrid to Sydney, we’ve got you covered

84

20

AUTO FUTURE

Why driverless cars are a reality

FOOD & DRINK

The Buenos Aires restaurants innovating Argentinian cuisine

88

EXHIBITION

The world’s best photojournalism

90

COLUMN

Why big data matters and how it’s changing everything

07

37,415 copies July - December 2016

JUNE ISSUE 138

CONTENTS FEATURES

32

VOLKSWAGEN TRAVAILS

Recent scandals have plagued the German car marker. Can it survive?

40

HIGH-END RESTAURANTS

Gourmet cuisine can cost a fortune – but is it worth the experience?

48

LONDON PROPERTY

How will Brexit affect the UK capital’s property market – and should you invest?

58

MANAGEMENT CONSULTANTS

Can the likes of Bain and McKinsey adapt to the new digital era?

66

BILLIONAIRE BUNKERS

The tech CEOs and billionaires buying hi-tech bunkers and private islands

08

INTERNATIONAL MEDIA REPRESENTATIVES AUSTRALIA/NEW ZEALAND Samford Media; Tel + 618 9447 2734, okeeffekev@bigpond.com.au CHINA IMM International; Tel +852 2639 3635, j.bouron@ imm-international.com GERMANY IMV Internationale Medien Vermarktung GmbH; Tel +49 8151 550 8959, w.jaeger@imv-media.com GREECE Global Media; +30 210 69 85 981, c.fronimos@global-media.gr HONG KONG/MALAYSIA/INDONESIA Sonney Media Networks; Tel +852 2151 2351, hemant@sonneymedia. com INDIA Media Star; Tel +91 22 4220 2103, ravi@mediastar.co.in SWITZERLAND/FRANCE/ITALY/SPAIN IMM International; Tel +331 40 1300 30, n.devos@ imm-international.com JAPAN Tandem Inc.; Tel + 81 3 3541 4166, all@tandem-inc.com NETHERLANDS giO media; Tel +31 6 6 2223 8420, giovanni@giO-media.nl THAILAND Media Representation International; +66 8 6777 3417, Stephen@mediarepint.com TURKEY TTR Media Ltd; Tel +90 212 275 8433, tanbilge@medialtd. com.tr UK Spafax; Tel +44 207 906 1983, merle.stein@spafax.com USA WorldMedia Inc; Tel +1 212 244 5610, conoverbrown@worldmediaonline.com

UPFRONT

10

JUNE / INVESTMENT

ISSUE 138

Old money Lynnette Peck investigates the opportunties in the antique investment market

T

here’s gold in old, as the saying goes, but, as with all investments, you need to know what you are doing before you start your antique investment journey.

Some basic rules include: research, research and do more research; specialize in one area at a time; buy only what you like; buy the highest quality you can afford, and take advice from reputable dealers and auction houses.

“Quality is the most important aspect of collecting in every regard,” says antique dealer Simon Schneider. “Good examples of decorative antiques are selling well at present, with the emphasis on decorative. Mid-20th century arts and crafts furniture from the Cotswolds and Mouseman furniture by Robert Thompson [with his distinctive carved mouse signature] are all on the up and should continue to rise in value.”

All investments are unpredictable, though, returns are never guaranteed and generally – as with most investments – it is best to invest with a longterm view. Remember, antiques

go in and out of favour, just like fashion and interior trends.

“Although you will no doubt have some interest in the financial value of your collection, this should be seen only as a bonus,” writes Judith Miller in the antique industry book, Miller’s Antiques Handbook & Price Guide. “Just like any market, fashions and tastes change over time. This means that something that is not valuable now may become so in the future and vice versa.”

“It is very difficult to predict what returns you could get on your antique investment,” Schneider adds. “If you had purchased Impressionist paintings by artists such as Dorothea Sharp 20 years ago for a couple of thousand pounds, you would be laughing all the way to the bank, as they are currently selling for upwards of a $100,000 and continue to rise.”

Schneider also recommends buying what he calls “mantiques” – collectibles appealing mainly to men. “Buy Regency library tables, pairs of terrestrial and celestial globes, and top-end vintage wristwatches,” he

11

UPFRONT

Right: A Xuande Lobed Bowl, an antique Chinese ceramic valued at HK$100 million, is on display at Sotheby’s Hong Kong Gallery Below: The Mega Web car theme park in Tokyo, Japan

Both men’s and women’s jewellery from the 1950s was, up until recently, thought to be unfashionable, but is now a very good investment says. “For both men and women, look at jewellery from the 1950s to the 1970s, which until recently was considered unfashionable.

It is now a good investment as tastes and fashion favour these decades. Also look out for George Jensen vintage jewellery, which is hot at present.”

The art market has seen its fortunes prosper, particularly for more modern art in the last couple of decades. Antique art will always have a place in any serious investor’s portfolio, though – after all, there are only so many Monet and Turner paintings available. A current art world trend is the sale of single owner collections, largely inspired by the sale at Sotheby’s of the late David Bowie’s art collection. A piece from a single owner collection that also has great provenance will probably perform well in the future. Names to possibly invest in that sold well at the Bowie auction included Scottish artists Eduardo Paolozzi, Alan Davie and John Bellany.

12

Classic cars are another feel good antique investment, providing you have the space to store them, of course. The Knight Frank luxury investment index classic car special report last year tracked percentage return on investments over a 12-month period and estimated the value went up by 17 per cent, compared to five per cent for wine. Purchasing a classic car could mean your investment will outperform the FTSE 100 comfortably. Cars that are currently experiencing high returns are the Alfa Spider, Fiat 500 original, Porsche Boxster 986, Mercedes SL W113 Pagoda and Jaguar E-type Series 1 FHC RHD. Vintage fashion and accessories are a lucrative investment too.

Vintage couture pieces by names such as Courrèges, Yves Saint Laurent and Fortuny can sell for six-figure prices. Kerry Taylor, who holds vintage couture sales at her London auction house, says provenance is essential and pieces by iconic and recognisable names such as Audrey Hepburn, Princess Diana and Wallis Simpson will add zeros to the price of a vintage fashion item. Other investments that are set to grow are Chinese decorative arts, 20th century furniture design by George Nakashima, fashion photography by icons such as Helmut Newton and Guy Bourdin.

JUNE / INVESTMENT

ISSUE 138

Vintage jewellery Antique jewellery expert and TV presenter Alison Chapman, who has more than three decades of experience, offers the following advice when investing in jewellery

What should we buy?

Look out for anything signed by Cartier, Van Cleef and Arpels, Boucheron, Graff Diamonds, Mikimoto or Tiffany – these are the obvious design houses to invest in. To become a connoisseur of antique jewellery, invest in names like Carlo Giuliano, Archibald Knox, Sibyl Dunlop, Edith Linnell and Arthur and Georgie Gaskin, as pieces by these designers are rare and will produce the greatest return.

Investors on a smaller budget should look for anything from the art deco period (1908-1935) as the jewellery is strong and clean-cut. Platinum and diamonds are timeless and look modern, even today. Invest in rings and earrings as these will be easier to sell on. Next year is the 100th anniversary of the women’s suffrage movement and jewellery with the movement’s colours of green, violet and white is increasingly collectible. Over recent years any original pieces have become highly prized and very expensive.

What sort of returns are possible?

If you buy new jewellery, you will need to wait a few decades for a return on your money.

Buying from a trusted antique or secondhand jeweller will put you ahead of the investment game. When people ask me if jewellery is a good investment I have no clever answer. I do know though that in the 35 years that I have been a jeweller, I have found it to be so. How can a man or woman show their wealth tastefully? By adorning their wife or husband with jewels. Jewellery is an expression of wealth and for centuries it has been used as part of a marriage proposal and then the dowry. The return one gets is a sense of security and jewellery is wealth we can see as it is real and tangible.

Why is jewellery one of the more enjoyable forms of investment?

Owning fine jewels is without a doubt extremely satisfying and pleasurable. It’s like owning a classic car or a thoroughbred racehorse. In today’s market where there is little interest to be earned on savings, it is exciting to be able to invest in something that you like and can enjoy wearing. In an age where most modern jewellery is set with treated stones that have been enhanced, buying antique jewellery not only means that you are being green in your purchase but the stones set in the jewellery are as mother nature created them. In a world of fake, it is these natural stones that are the investment of the future.

13

UPFRONT

14

JUNE / TECHNOLOGY

ISSUE 138

Shutter speed Farhad Manjoo examines why Instagram’s growth is just beginning and why the company is the jewel in the Facebook crown

A

t a recent allhands meeting with employees, Kevin Systrom, co-founder and chief executive of Instagram, shows off one of his favourite charts: days to reach the next 100 million users.

“It’s the only graph in the company that we celebrate when it declines,” he says in an interview recently at Instagram’s headquarters in Menlo Park, California.

Not long ago, the Facebookowned photo-based social network was growing at a steady clip. Every nine months, without fail, Instagram added another 100 million users somewhere in the world. Then, last year, it began racking up more new users every day. In just six months, it grew from 500 million users to 600 million.

Just four months after reaching that milestone, the company announced it had reached another. About 700 million people now use Instagram every month with about 400 million of them checking it daily.

I have come to visit Systrom because I am one of the new 100 million. I technically joined Instagram years ago but used it only occasionally. In the past

few months, however, I began diving in more often and now I check it several times a day.

As I used Instagram more, I realised something about the photo-sharing app: it is becoming Facebook’s next Facebook.

Part of what got me interested in using Instagram more was the war between Facebook and Snapchat, the picture messaging app that has created genuinely new ways of communicating online – and whose features Instagram and Facebook’s other subsidiaries recently aped.

But once I started using Instagram, I discovered something surprising: Instagram has improved on the features it took from Snapchat. Over much of the past year it has added lots of other features too. Among them is a feed ranked by personalisation algorithms rather than by chronology, live streaming, the ability to post photo galleries and a (controversial) new app design and logo.

Instagram is now substantially changing the daily experience of using the service at a speed that would ordinarily feel reckless for a network of its size. But rather than alienating existing users, its confident moves seem to be paying off.

This is difficult to quantify.

“My favourite thing to ask the team is, how large do you think we will be eventually? It’s definitely more than two times the size we are now”

15

UPFRONT

16

My subjective experience might not match yours (lots of people, for example, say they hate the new ranked feed). But for me, Instagram’s many changes have made for a social network that feels more useful, interesting and fun than it was last year.

Part of it is down to the new features but a bigger reason is the greater use they have inspired.

Networks are better when more people use them more often.

The more I have used Instagram recently, the more stuff I have seen from more people and the more I want to use it.

Instagram has thus triggered an echo. It feels like Facebook. More precisely, it feels the way Facebook did from 2009 to 2012 when it silently crossed over from one of those tech things that some people sometimes did to one of those tech things that almost everyone you know does every day.

$1bn

Amount Facebook paid for Instagram five years ago

80%

Instagram users who live outside the United States

In some ways this is not surprising. Instagram has been growing exponentially since it went live in 2010 and under Facebook – which bought the company for $1 billion five years ago – it has had ample resources to keep that up.

But with 700 million users it is in virtually uncharted territory.

There are bigger networks: Facebook has nearly two billion users a month. Two instant messaging apps owned by Facebook and WhatsApp have grown past the one billion user mark. In China WeChat also has more users.

But last year you might have said there was a question whether a picture-based service like Instagram could have reached similar scale – whether it was universal enough, whether there were enough people whose phones could handle it, whether it could survive greater competition from newer photo networks like Snapchat.

Systrom says the plan to rapidly speed up Instagram’s pace of change to attract more users was deliberate.

“The primary reason we have scaled more quickly in the last 100 million is that we have figured out that as we have scaled, we have had to unbreak ourselves,” he adds.

What he means is that Instagram systematically analysed all the bottlenecks to its service and tried to eliminate them.

Then it looked for potential opportunities to better serve users and tried to put them in place as fast as possible.

This sounds trivial but social networks are sometimes held hostage by their most loyal users, who tend to hate change. Facebook bucked that trend. As it grew, it constantly adapted its features to become more things to more people. Systrom is following the rules of the same playbook.

JUNE / TECHNOLOGY

“My favourite thing to ask the team is, how large do you think Instagram will be eventually?” he says. “Usually you get to some large number and it is definitely more than two times the size we are now. So I can confidently say most of the people who will eventually use Instagram do not use Instagram now.”

Systrom is a fan of academic business theories, especially Clay Christensen’s, whose “innovator’s dilemma” addresses the tension between serving an incumbent audience at the expense of a much greater potential one. The realisation that Instagram could become much bigger than it is now is freeing, says Systrom; it gives the company the confidence to keep changing.

Some of the bottlenecks the company has addressed in the past year are internal. For example, Systrom and his co-founder Mike Krieger realised one of the primary holdups was their own decision-making. So in the past three months, they started holding meetings in which they just make a host of decisions.

Other bottlenecks involved technical fixes. More than 80 per cent of Instagram’s users are now outside the United States and the service is growing especially quickly in parts of Asia and South America that are dogged by underpowered Android phones and slow cellular networks. A huge part of Instagram’s engineering efforts are devoted to making its Android app work better outside the US. After Instagram began Stories – the video slideshow feature it copied from Snapchat – it spent a month

ISSUE 138

adding speed improvements for international markets.

“We consistently find that performance improvements lead to usage improvements at the level of what a new feature would add,” says Krieger.

And then there’s Instagram’s decision to incorporate features developed by Snapchat, about which Systrom is unapologetic.

He credits Snapchat with creating Stories but argues it is not merely a feature but a new digital format that can be broadly reinterpreted across different products.

“I don’t know much about the history of cars but let’s say the Model T was the first car,” he says. “What do you think the first car company other than Ford was thinking? Are we copying Ford or is this a new mode of transportation that everyone is going to have different takes on?”

This can sound a little too defensive but he might have a point. If you compare how Stories works on Instagram to how it works on Snapchat, they are indeed similar. But the context of the two apps – the fact Instagram tends to foster larger, more public networks in which people maintain a more polished profile, while Snapchat encourages a smaller, more intimate network – does change the nature of the format. Stories on Instagram feels different from those on Snapchat because there are different people on both networks using it for different purposes.

And for me, the Instagram version often offers a superior experience for one obvious reason: I know more people there and you most likely do, too.

INSTAGRAM DEALS SNAPCHAT A BLOW Instagram’s new update has seen a backlash among some fans with the eight ‘Face Filters’ launched being similar to Snapchat’s existing features. Instagram doesn’t seem to worried about the furore. “It’s how the tech industry works and it’s how most industries work,” Instagram executive Kevin Weil told USA Today. “Good ideas start in one place and they spread. We’ve been very public, we’ve said kudos to Snapchat for being the first to come upon the idea of Stories, but Stories is going to be a format that gets adopted everywhere.” Instagram’s Stories feature has been a huge success with more than 200 million using the service (Instagram has more than 700 million users). With Instagram currently testing location-based features that mimic Snapchat’s geofilters and local stories, it seems the battle between the two tech companies is only beginning.

17

UPFRONT

South African splendour A spectacular property in one of Cape Town’s most beautiful districts

L 18

ocated on the outskirts of Cape Town, this property offers stunning views along with some remarkable add-ons such as a floodlit tennis court, a swimming pool with ensuite changing room and a wine cellar.

Set on nearly an acre of land, it has seven bedrooms and bathrooms and offers seclusion and space for a family of any size.

The entrance floor is open-plan and perfect for entertaining with a huge kitchen, scullery and pantry. There is a large covered terrace that is heated and features a built-in barbecue.

The master bedrooms are huge and offer private balconies as well as ensuite bathrooms with standalone bathtubs and breathtaking views. Bishopscourt is one of Cape Town’s nicest suburbs, quiet yet close enough to all of the city’s attractions.

South Africa

PRICE $3,688,000

christiesrealestate.com

JUNE / PROPERTY

ISSUE 138

Gym

Pool

Sauna

Tennis court

Staff quarters

Wine cellar / grotto

Four-car garage

19

UPFRONT

A driverless future Dejan Jovanovic examines the push towards driverless cars and how Dubai is leading the way

“

20

By next year, you’ll be able to travel anywhere in the GCC with an electric vehicle.” Elon Musk was in Dubai earlier this year for the World Government Summit as well as the local launch of Tesla and his promise should be heeded.

When South African-born Musk, tech pioneer and Martian colonist in the making, got bored with his work commute recently, he started fantasising on Twitter about a network of tunnels under California so he would never have to sit in a traffic jam again. Within a month he had founded The Boring Company and started, well, boring. When he couldn’t get his head around the internet economy, he founded PayPal. When he wanted to go to space, he founded SpaceX and when he couldn’t buy the car he wanted, he made his own. Musk says what he means and does what he says.

Next year we will be able to travel anywhere in the GCC with an electric vehicle. Dubai’s Roads and Transport Authority (RTA)

has already ordered 200 zeroemissions Tesla vehicles for the city’s taxi fleet, cars that produce no carbon dioxide and happen to come with an added benefit: all are built preloaded with software and hardware to enable fully autonomous, driverless mobility.

RTA’s director general and chairman of the board Mattar Al Tayer says the cars are only a small part of the city’s Smart Autonomous Mobility Strategy, which aims to transform 25 per cent of total vehicle journeys made in Dubai into autonomous journeys by the year 2030. This is quite a bullish target to achieve since most commentators don’t expect autonomous cars to achieve significant market share over the next 15 years or so.

Even bosses of the biggest car giants are not convinced.

Autonomous vehicle testing is largely done in closed areas instead of public roads, where bigger gains in research are to be made. In the US, driverless vehicles are undergoing

JUNE / TECHNOLOGY

ISSUE 138

21

UPFRONT

22

real-world tests on limited public roads in the states of California and Michigan, where America’s big three - General Motors, Ford and Chrysler - reside. Speaking at the Chicago car show earlier this year, General Motors’ president Dan Ammann stressed the only way to make progress toward a future where you can catch up on The Simpsons season 44 during your commute is through more testing.

“To make autonomous vehicles the best they can be and the safest they can be,” says Ammann, “we really need to be testing on public streets. It needs to be public streets in a real world environment.” Dubai, it seems, gets that.

So far the public has taken to semi-autonomous driving features enthusiastically, with most luxury cars premiering safety systems that apply the brakes automatically should the car detect obstacles or pedestrians and that keep the vehicle in its designated lane without veering in case the driver is too tired to keep things straight. This adaptation to semi-autonomous driving features means people will be more receptive to fullyautonomous vehicles once they do come around, especially since the tech will start trickling down to cheaper cars eventually too.

However, we have a long way to go. On the journey to driverless cars, we are not even halfway there. Autonomous cars are classified from level 0 to 5, the former being a normal car with no automatic control. At level 5, the car needs absolutely no human intervention to get about.

We are currently somewhere

$19bn

Amount that the driverless car industry is set to be worth by 2025

between levels 2 and 3. Audi, for example, aims to release a level 3 classification semi-autonomous car by 2020.

The German premium manufacturer’s cross-country rivals Mercedes-Benz share a similar vision. At January’s Detroit motor show in Michigan, one of the largest on the annual calendar, Mercedes’ head of research and development Ola Källenius agreed level 3 cars are next. Mercedes, however, has

already completed a Dubai-Abu Dhabi jaunt fully autonomously (with, of course, a back-up human behind the wheel) using no more than a current production E-Class saloon you can buy from a dealership right now.

“Level 4 and level 5,” says Källenius, “will be coming in a big commercial way between 2020 and 2025.”

Dubai, then, with the RTA’s Tesla deal, will be at the forefront of self-driving

JUNE / TECHNOLOGY

research. All Tesla cars currently being manufactured, be it the $75,000 Model S saloon or the flagship $93,000 Model X SUV, roll out of the company’s Californian plant with onboard autonomous hardware, which includes cameras, radars and sensors. Through the wonders of the internet, Tesla then keeps updating the car’s software wirelessly, with each update bringing improvements to the car’s autonomous behaviour.

Tesla’s artificial intelligence autopilot can ‘learn’ from other human-driven cars around it and update the company’s HQ to keep improving the driverless algorithm real-time and determine the best manoeuvring response to every scenario. By 2025, the Teslas in Dubai will most likely have been round the block and back again.

Tesla collects data from all the cars it puts on public roads and the 200 examples making their

Elon Musk at a recent Tesla launch. The RTA has ordered 200 zero-emission Teslas for Dubai’s taxi fleet

ISSUE 138

way to Dubai’s taxi fleet will form a valuable test-bed. The city wants to be a world leader in autonomous transport by 2030. Dubai Metro – the world’s longest driverless metro network, transporting 600,000 passengers a day – gives Dubai a head start before city officials phase in driverless trams as well. The next step is introducing autonomous buses to join the city’s public transport fleet and covering lastmile gaps with electric vehicle rentals such as EKar, the Middle East’s first pay-as-you-go hourly car rental and Udrive, which currently offers rentals charged by the minute.

This move toward a driverless urban environment by the government is welcome backing for full autonomy but it will be the private sector that dictates growth. On the subject of demand, the world’s car giants are vague. All agree we will have highly autonomous cars by about 2020 but that is all they agree on.

In any case, the driverless wheels are set in motion – the global collision avoidance system market, for example (the technology that largely dictates semi-autonomous and autonomous decision-making) is soaring and is expected to reach a value of $19 billion by 2025 once the projected level 5 products start appearing.

For anyone who has ever survived Dubai rush hour, technology to prevent accidents is good news. Human error currently accounts for 90 per cent of all accidents, according to the United Nations.

Let’s face it, we are terrible at driving. All we have to do now is learn to let go.

23

UPFRONT

1

24

ASTON MARTIN YACHT Aston Martin has entered the world of luxury yachts with this 37ft beauty. Designed with carbon fibre dashboards, car-style steering wheels and a sliding deck that allows the cockpit to be completely covered, this is a stunning piece of work.

Quintessence Yachts, from $1.625 million, quintessenceyachts.com

JUNE / SPEND

ISSUE 138

2

LINLEY JEWELLERY BOX Made of sycamore and mother of pearl, this jewellery box combines the old with the new: old techniques with a very modern design. Perfect for storing those family heirlooms.

David Linley, $16,494, davidlinley.com

3

THE FIRE NEXT TIME A reprint of the seminal James Baldwin text, in a letterpress edition with more than 100 photographs from Steve Schapiro, who travelled the American South with Baldwin for Life magazine.

4

CASSINA BOBOLI TABLE A stunning piece of Italian craftsmanship, named after the historical gardens in Florence. With five sizes, three shapes and five finishes, there are more than one hundred combinations, each of them a welcome addition to any home.

Taschen, $226, taschen.com

Cassina, $10,645, cassina.com/en

5

25 PETER LAYTON VASES These paint-splattered vases by renowned glassblower Peter Layton were inspired by Jackson Pollock’s work.

Part of a commission for the Royal Academy of Arts, they are both structured and playful and would grace any home.

London Glassblowing, from $1,268, londonglass-blowing.co.uk

UPFRONT

Full of beans

Rachel Read and Kate Farr chat to a Hong Kong entrepreneur about the challenges of sustaining a business in one of the world’s most competitive cities

T 26

alk to Mark Chan, co-founder of the independent cafe-cumlifestyle store officially called {sfs} – the brackets are part of the title – and you are struck by his genuine enthusiasm for Hong Kong’s local community, along with a commitment to evolving his business, often against the odds in the city’s cut-throat retail sector.

A British chartered architect by trade, Chan and his financier business partner Wing Lo were inspired to start Sfs after a decade living and working in London.

“Back in the UK, we spent most weekends cafe-hopping around east London,” says Chan. “When we met up in Hong Kong [Chan and Lo moved to the city in 2013], we discussed the lack of such a vibe in this fast-paced city and

decided to bring a piece of east London back with us.”

Although Hong Kong has a thriving caffeine addiction running through its veins just like any other major city, the pair felt there was something lacking in its existing coffee shop scene.

“Hong Kong is filled with coffee chains where customers have zero interaction with the baristas,” says Chan. “In fact, customers seldom speak to anyone else and are most often on their smartphones. Drinking coffee is merely a daily routine.”

Sfs was founded to challenge this status quo. “We believe given the right environment, coffee can connect people. In east London many independent shops serve brilliant coffee and strangers meet and socialise while browsing

JUNE / THE BUSINESS

ISSUE 138

other products or even just sitting casually on the doorstep.”

This vision for a Hackney-style hangout initially led Chan and Lo to work with independent UK coffee suppliers.

“When we first started, we wanted to bring the taste of east London back to Hong Kong,” says Chan. “We brought back coffee beans from different London roasters and after extensive sampling, decided upon espresso

“Hong Kong is filled with coffee chains where customers have zero interaction with baristas” blends from Nude Espresso and Climpson and Sons – both very popular within the UK but new to Hong Kong.”

However, soaring freight costs led the pair to seek alternatives closer to home. “We now use a house blend that is roasted locally here in Hong Kong and has been equally well received by our customers,” says Chan. “We also occasionally serve guest blends from around the world and always have a selection of single origin beans for those who like hand-dripped coffee.”

When it came to picking a location to nurture their neighbourhood hangout vibe, Chan and Lo struck upon the Star Street precinct in Wan Chai – one of the few areas in Hong Kong Island where the majority of businesses remain independently owned, with a charmingly hipyet-laidback vibe to match. As an architect, Chan brought his own vision to the cafe’s original

27

UPFRONT

“Foot traffic in the area has more than halved since we first started out and many local businesses have closed”

28

location on St Francis Street (which gives the business its name), overseeing its design and fit-out in just three months from inception to opening. “Things had to move really fast when we found a shop space we both liked and signed the lease. Designing and fitting out did not take very long as it was a small space and fortunately I had a team of contractors I was familiar with.”

Nevertheless, Hong Kong’s soaring retail rents are a constant challenge for small businesses – and Sfs was no exception. “The rent became too expensive to afford at our first location on St

Francis Street, plus we needed a larger space to host bigger workshops and events,” says Chan.

Demonstrating the strong community focus that has underpinned the business from the start, Sfs teamed up with a neighbour, the print gallery Odd One Out, to find a new space.

“They were also looking for a new location so we found a space up the road and decided to move in together.” Relocating both businesses was, surprisingly, even faster than the original set-up, taking about one month from planning to opening, with the fitout taking just a week.

8%

Year-on-year decline in retail sales in Hong Kong in 2016

“The transition was swift with no business days affected,” he says. This agility and openness to change has greatly benefited both establishments. “Although they remain independently run businesses, being close neighbours means we can share resources and shop space in case of events,” says Chan. “We help each other out and the relationship is mutually beneficial. Many customers do not even realise that we are actually two separate shops.”

This community-focused approach is often at odds with Hong Kong’s unforgiving business scene, in particular the city’s ruthlessly competitive retail market.

According to a Maybank Kim Eng report, Hong Kong’s retail sales fell by eight per cent in 2016 – a 17-year low. Chan says in common

JUNE / THE BUSINESS

with many small business owners, Sfs has felt the impact of the retail slowdown. “Foot traffic in the area has more than halved since we first started out. The reduction and extreme fluctuation of foot traffic in the area is one of our biggest challenges. While we have a crowd of regulars who live or work in the neighbourhood and have supported us over the past few years, we rely equally on walk-in customers and product sales to sustain the business.” Hong Kong’s subtropical climate, with its hot wet summer months and unpredictable typhoon season, also significantly influences turnover. “Being a street shop as opposed to located within a shopping mall means that foot traffic is highly weatherdependant,” says Chan. “There are days that can go by with only a few cups of coffee sold.”

To combat these challenges, the partners have consciously chosen to keep their business small, maintaining a local focus while enabling it to evolve and grow sustainably.

“As our shop is very small, we only require one staff member at a time so the barista on duty is tasked with the full daily operation of the cafe.” The space has also worked in its favour with the venue’s availability for private venue hire – including market events, music gigs and latte art workshops – opening up alternate revenue streams.

Sfs has expanded into online retail too with an e-commerce site specialising in independent lifestyle brands operating in conjunction with the store. While the duo started as distributors for east London design brands like Plumen lighting and

The venue also plays host to a variety of events, gigs and workshops

ISSUE 138

Ally Capellino bags and accessories, their product range has since grown to include local designers, including Bujie Lite handmade clutches and Kitmen Keung watches.

While curated selections are considered something of a cliche in the independent retail scene, the Sfs team are still selective about the brands that best represent their vision.

“We look for products with a twist, a reinvention of the classic,” says Chan. This is evident in Keung’s dual-dialled watches, which are ideal for frequent travellers, Bujie Lite’s crochet bags made from tee shirt yarn and Danish brand Eone Bradley, whose timepieces were originally designed for the visually impaired and substitute ball bearings for hands, enabling wearers to tell the time by touch alone. Sensitive to customers’ changing tastes and budgets, Sfs increasingly stocks lower-priced products, working on a consignment basis with designers to keep overheads low.

Looking to the future, Chan plans to pursue new creative challenges under an increasingly diverse umbrella. He recently started Sfs design collaborative, a studio where the output ranges from graphic design to exhibitions and interior design. He also remains optimistic that the outlet will continue to adapt and evolve: “With the day-to-day shop operations on track, I hope to relate my design expertise more to the cafe and hopefully fresh ideas and new collaborations will emerge.” {sfs}, 14 St Francis Street, Wan Chai, Hong Kong; +852 2527 7898, stfrancis.com.hk

THREE TO TRY

29

1. The Cupping Room. Run by an award-winning barista in the heart of Wan Chai, the quality of the coffee here is second to none.

2. Café Heato. Heato is strewn with plants and paraphernalia. Oh, and the coffee is pretty good too.

3. Nosh. Renowned for its brunches as much as for its coffee, this is one of Sheung Wan’s must-visits.

6 Tsing Pak Path, Tuen Mun, New Territories;

11 Upper Station Street, Sheung Wan;

Road Central, Central; +852 2799 3398

+852 3563 6601

+852 2559 8508

JUNE ISSUE 138

UPFRONT / CLASSIC READ

The Lean Startup

By Eric Ries

A fascinating part of the book focuses on ‘the pivot’, where a business changes its product or strategy

S

30

ince its publication in 2011, The Lean Startup has acquired an almost mythic status among entrepreneurs. Written by the entrepreneur and start-up advisor Eric Ries, the book traces the steps business creators should take in order to maximise their chances of success. The lean start-up movement focuses on shortening the time it takes to get a product out to the market by experiments, testing products and validated learning.

The book focuses on a number of key techniques that aspiring entrepreneurs should use, including a minimal viable product, which essentially means getting the most basic version of a product out to the market in order to see if it works. In the book, Ries cites the Zappos

founder Nick Swinmurn, who in order to test his online shoeselling business, simply took pictures of shoes in local stores, posted the pictures online and if a sale was made, bought the shoes himself and posted them to the customer. Enough people bought shoes on his makeshift website to convince him this was a viable business and Zappos is now worth more than $1 billion. Another technique, now commonplace among online retailers, is A/B testing. This means different versions of a product are offered to customers at the same time and the seller can immediately see which version worked best.

One of the most interesting parts of the book is where Ries talks about “the pivot”, which is “a structured course

$1bn

Net worth of online shoe-selling business Zappos

correction designed to test a new fundamental hypothesis about the product, strategy and engine of growth”. Or, to put it simply, it is when a company decides there is no demand for the original product or service it is offering and pivots to a new strategy. Rise cites the example of Groupon, which started off as an online activism portal called The Point. After it got no traction, the founders set up a blog and posted a promotional coupon for a pizzeria in the lobby of their building. That offer got 20 take-ups and the founders realised there was a market for online discounts – an insight that eventually led to the company being worth more than $1 billion.

One illustration of how powerful the book has been is to see the number of Lean Startupthemed events and groups that have sprung up in recent years.

Using the methodology outlined in the book, entrepreneurs share information, experiences and lessons learned in order to ensure their businesses have the best chance of survival. It is rare that any book has this much impact but The Lean Startup is a game changer. As the renowned investor Marc Andreessen said: “Eric has created a science where previously there was only art. A must read for every serious entrepreneur – and every manager interested in innovation.”

A new beginning Mubadala Investment Company is a pioneering investor with the vision, scale and expertise to make a global impact. A new company formed through the merger of the International Petroleum Investment Company and Mubadala Development Company, it will serve as an investment powerhouse for Abu Dhabi. Proudly sovereign-owned, and resolutely commercial in focus, we are accelerating the UAE’s economic growth with a bold and innovative approach to strategic investment.

A global champion for economic growth Learn more at mubadala.com

VOLKSWAGEN

INSIDE VW’S CAMPAIGN OF TRICKERY Jack Ewing explores one of the biggest car manufacturing crises in history

32

VOLKSWAGEN

33

VOLKSWAGEN

V

34

olkswagen was a little more than a month away from the biggest crisis in its history when Oliver Schmidt, a high-ranking engineer for the carmaker who dealt with regulators in the United States, reportedly wrote an e-mail to his superiors.

Schmidt had just met Alberto Ayala, a deputy executive officer of the California Air Resources Board, the state’s air quality enforcer. For well over a year, Ayala had been pushing Volkswagen to explain why its diesel passenger cars polluted so much more in ordinary driving than they did in California testing labs.

Schmidt’s e-mail, which has not been previously reported, was dated August 5, 2015.

Hours earlier in Michigan, the engineer had presented Ayala with information that purported to offer a solution to the emissions problem.

T h e m e e t i n g “ we n t ve r y we l l ” , w r o t e Schmidt. He cautioned, however, that the information he presented might encounter “headwind” when it was examined by experts at the Air Resources Board lab near Los Angeles.

That was an understatement.

The experts soon concluded that the technical information was the latest in a series of manoeuvres by the automaker to hide its misdeeds. A few weeks later, Volkswagen admitted that the diesels it had sold in the United States since late 2008 had contained software designed to camouflage emissions that vastly exceeded legal limits.

Media reports on the scandal have usually focused on Volkswagen’s original sin - the company’s decision in 2006 to equip its diesels with illegal software.

But the most costly aspect of the wrongdoing for Volkswagen might have been the coverup that the company orchestrated after regulators first became suspicious.

The following reconstruction, based on interviews with dozens of participants and a review of internal Volkswagen documents and communications, shows that the cover-up spanned years and lasted until just days before the company’s lies were exposed. Volkswagen employees not only allegedly manipulated the engine software but are also accused of generating reams of false or misleading data to hide the fact millions of vehicles

Schmidt was arrested on January 7 this year in Florida and has been charged with 11 counts of conspiracy and fraud in the Volkswagen emissions scandal. His trial date has been set for January next year and he could face up to 169 years in prison if he is found guilty

had been purposely engineered to deceive regulators and spew deadly gases into the air.

Documents and interviews also reveal more about the role of Schmidt, the Volkswagen compliance official who is, so far, the only company executive to be languishing behind bars.

Arrested when he visited the United States last Christmas, Schmidt has been refused bail as he awaits trial for fraud and conspiracy. He maintains he was misled by other Volkswagen engineers and in-house lawyers.

They were a curious sight, the graduate students from West Virginia University, barrelling down California freeways in spring 2013.

The back end of their car, a Volkswagen Jetta station wagon, sprouted a tangle of pipes and hoses. Flexible tubes sucked exhaust from the tailpipes and fed the gas into a grey box sitting on a slab of plywood in the car’s cargo area.

Bolted to the plywood was the portable generator needed to power it all.

The students, Hemanth Kappanna and Marc Besch, were testing the Jetta’s emissions for nitrogen oxides, a family of gases that contribute to global warming. Working with a meagre $ 70,000 research grant, Kappanna, Besch and other members of a West Virginia University team set off a chain of events that exposed VW’s massive emissions-cheating conspiracy.

HUGO BOSS UK LTD. Phone +44 (0)20 7554 5700 hugoboss.com

BOSS Stores 55 Brompton Road 122 New Bond Street 178-180 Regent Street 35-38 Sloane Square 78 Victoria Street Westfield White City Non-EU residents can shop Tax Free in store.

Find more information at premiertaxfree.com

VOLKSWAGEN

The most costly aspect of the wrongdoing for Volkswagen was the cover-up that the company set up after regulators became suspicious

36

In early 2014, the graduate students and their professors published a repor t that exposed strange behaviour by Volkswagen diesels. At Volkswagen headquarters in Wolfsburg, Germany, alarm bells sounded.

In May 2014, after examining the study, Bernd Gottweis, Volkswagen’s head of product safety, wrote a one-page report. It was included in the packet that aides gave to Martin Winterkorn, the Volkswagen chief executive, to read over a weekend.

Gottweis reported that a Volkswagen Jetta tested by the team from West Virginia had emitted 15 to 35 times the permitted amounts of nitrogen oxides during road tests. A Volkswagen Passat was five to 18 times over the limit. The same cars were able, however, to pass tests conducted on rollers in a laboratory.

“A thorough explanation for the dramatic increase in NOx emissions cannot be given to the authorities,” wrote Gottweis, using the technical term for nitrogen oxides. “It can be assumed that the authorities will then investigate the VW systems to determine whether Volkswagen implemented a test detection system in the engine control unit software (so-called defeat device).”

Gottweis’ memo delivered a clear warning to the highest level of management of the risk that Volkswagen had been caught using an illegal defeat device.

An internal Volkswagen presentation, prepared soon after executives learned of the West Virginia tests, discussed various strategies the company could adopt to allay suspicions. One option was for Volkswagen to simply refuse to acknowledge a problem. Another option was to offer to update the engine software. But the update would not bring emissions down to the required levels, the presentation said. In the worst case, Volkswagen could admit there was a problem and buy back diesel cars sold in the United States.

“It should first be decided whether we are honest,” Schmidt allegedly wrote to a colleague, according to the criminal complaint against him. The comment was cited as evidence that Schmidt was aware Volkswagen had something to hide.

Ayala of the California Air Resources Board, or CARB, was sufficiently bothered by the results to initiate a more intense inquiry, taking advantage of CARB’s clout as a regulator. Ayala collected a small fleet of Volkswagens to test.

The tests confirmed something was wrong but did not explain why. Volkswagen, which has a technical facility in Los Angeles, would perform its own tests.

VOLKSWAGEN

“For every answer we got, we generated a couple more questions,” said Ayala.

As the back-and-forth dragged on without a solution, Ayala grew impatient. Volkswagen representatives gave answers that the regulators regarded as evasive, nonsensical or dismissive. CARB’s testing was wrong, Volkswagen complained.

To try to resolve the engineering stalemate, officials from both sides held a conference call on October 1, 2014. The Volkswagen representatives included Schmidt and Stuart Johnson, an American who was his second-in-command.

The Volkswagen executives unveiled a plan for a recall to update the engine software for diesels, starting with the 2009 model.

New Volkswagen cars being stored at the company’s factory in Wolfsburg, Germany

The planned recall seemed as if it were a concession by Volkswagen but had the effect of a delaying tactic. The company still did not provide an honest explanation for the excess emissions. Instead, Volkswagen told CARB officials the “new software incorporates the latest engineering experiences to enhance the efficiency” of pollution control equipment.

Accepting Volkswagen’s assurances that the recall would fix excess emissions, officials from CARB and the Environmental Protection Agency allowed the 2015 diesels to go on sale.

Volkswagen eventually updated the software in 280,000 vehicles. Afterward, the cars polluted less than they had but the upgrade did not remove the illegal software code or bring emissions to within legal limits. In fact, Volkswagen brazenly used the recall to enhance the ability of software to recognise when a car was being tested.

In June 2015, CARB’s tests showed the recall and software update had not solved the problem of excess pollution. Output of nitrogen oxides rose after about 23 minutes of driving, CARB said, one minute after the end of the standard test cycle.

CARB demanded Volkswagen show it the software code that governed the emissions control system in the new 2016 models. CARB also wanted to see the code in older models. If Volkswagen failed to comply with its request, CARB said, the agency would refuse to approve the 2016 models for sale in California.

37

VOLKSWAGEN

Left: Partly built VWs Below: Cars stalled in a traffic jam

38

In Wolfsburg, a Volkswagen committee discussed the growing crisis in the United States at a meeting on July 21, 2015. The committee decided to create a task force to achieve “fast and effective de-escalation of the issue with officials”, read an internal memo.

On August 5, Schmidt, who had moved to a job in engine development in Wolfsburg the previous March and Johnson, who had replaced him as head of emissions compliance in the US, allegedly asked to meet Ayala in Traverse City, Michigan.

According to Ayala, Schmidt and Johnson arrived with a thick binder of technical information and spent two hours going over it with him.

After he returned to California, Ayala turned the binder with technical information over to his staff.

A week later, the compliance engineers came back to him with the results of their analysis.

The information provided by Volkswagen was nonsense. Only one possible explanation was left, said the engineers.

“That was the first time I heard the words ‘defeat device,’” recalled Ayala. “It explained it all.”

On August 18, Johnson allegedly approached

Volkswagen used the recall to enhance the ability of the software to know when a car was being tested

Ayala at an industry conference in California and admitted the Volkswagens contained a defeat device. Ayala was furious.

“They wasted our time,” said Ayala. “It had a very significant, very real impact on us all.”

On September 3, 2015, Volkswagen formally admitted to regulators that 500,000 diesel vehicles in the United States had two calibrations, one for tests and one for normal operation. Winterkorn resigned before the end of the month, while insisting he had no knowledge of the wrongdoing.

The research begun with a $ 70,000 grant eventually cost Volkswagen more than $ 22 billion in fines and legal settlements, far more than the cost of equipping the cars with adequate pollution control equipment in the first place.

No one was more surprised at the outcome than the team at West Virginia University. “We never set out to get crosswise with anyone,” said Dan Carder, who oversaw the Volkswagen research as director of the university’s Centre for Alternative Fuels, Engines and Emissions.

“We were just doing our jobs.”

FOOD FOR THOUGHT

FOOD FOR THOUGHT

40

FOOD FOR THOUGHT

James Brennan explores the world of high-end restaurants and asks if the astronomical prices are ever worth it

41

FOOD FOR THOUGHT

Right: Atmosphere in the Burj Khalifa Below: Le Cinq’s chef Christian Le Squer Inset: Jay Rayner

S

42

ome called it the meanest restaurant review of all time. L’Express food critic François-Régis Gaudry labelled it “a complete lynching from start to finish”. The Guardian restaurant critic Jay Rayner’s caustic takedown of Paris gastro-palace Le Cinq sent shockwaves through the world of fine dining. Thousands shared and commented upon the review online. After all, who doesn’t enjoy a really good bad review, especially when it’s sticking the knife into a $650 meal for two at a three-Michelin star restaurant?

Whether it was a well-aimed shot at an overblown eatery full of its own self-importance or a cheap swipe at an expensive meal beyond most people’s monthly food budget has been the source of much debate. But the review does raise some interesting questions, such as can a starter ever be worth $154 (as Le Cinq’s Dublin Bay prawns cost)? Or, more to the point, when does a restaurant offer good value for money?

When it comes to costs there are lots of variables to consider, from staff salaries, location, rent and business rates to ingredients, kitchen equipment, tableware and waiters’ uniforms. But the most important variable is you. If you hate prawns, shelling out $154 for Le Cinq’s Dublin Bay variety could still be considered an expensive act of selfharm. But even if you loved prawns more than your own mother, it is all about how much pleasure you will derive from them and how much you are willing to pay for it.

“There are ways of measuring value by working out the margin between the cost, particularly of ingredients and the price of the dish,” says Richard Vines, Bloomberg’s chief food critic. “But in everyday terms, people probably assess value in terms of how much they enjoyed a restaurant versus what they paid. Even an expensive restaurant can be said to offer value if a diner enjoys it enough.”

As the former UK and Ireland panel chair for the World’s 50 Best Restaurants awards, London-based Vines is no stranger to the occasional eye-wateringly expensive menu. However, he insists money isn’t the only thing to consider where value is concerned.

“A chef friend of mine looks at menus and immediately starts costing the dishes, saying how much the fish or meat costs per kilo and then he gets annoyed when he sees the high price,” he says. “But I almost wouldn’t care what I paid for something simple such as a pasta dish in a romantic restaurant with beautiful views and lovely service.”

Setting and location can play a big part in our appreciation of a restaurant.

“Most diners accept that if they go to a restaurant with beautiful decor and furnishings in an expensive area, they are going to pay more. I expect to pay more for a dish in Mayfair than in Hackney, even if the dish is much the same,” says Vines. And for good reason. According to UK business rent and rates specialists CVS, the average annual business rates paid by restaurants in Westminster (which incorporates Mayfair) is about $103,000, compared to just over $24,000 in Hackney.

When it comes to value for money, where you eat a dish can be as important as how it tastes. The food at Atmosphere on the 122nd floor of Dubai’s Burj Khalifa might not be unique but the views from atop the world’s tallest tower certainly are. Le Cinq’s gilded home in the five-star Hotel George V in Paris was

FOOD FOR THOUGHT

“Most diners accept that a restaurant with beautiful decor in a good area is going to charge more”

described by Rayner as “decorated in various shades of taupe, biscuit and...shouts money much as football fans shout at the ref”. Describing it as “the scene of the crime”, he declared: “There is only one thing worse than being served a terrible meal: being served a terrible meal by earnest waiters who have no idea just how awful the things they are doing to you are.”

Some are evidently happy to pay through the nose for that privilege. But what if you were paying $600 a head for a meal in surrounds that are rather less ostentatious? Like in a tropical forest?

At Noma Mexico the only thing separating diners from the stars was the occasional lilting palm leaf. For just seven weeks in April and May, the latest pop-up from Rene Redzepi and his team from Copenhagen was an open-air eatery in Tulum, where the thick, lush jungle meets the Caribbean.

Applying New-Nordic sensibilities to the unique food culture of the Yucatan Peninsula, it offered such peculiarities as spring cactus with ant paste and mixed chillies with Jaguar cacao. The food and location were both unique, the chef was worldfamous and the opportunity was fleeting. Despite their high price, tickets sold like hot tortillas.

Redzepi defended the price tag, citing the huge logistical challenge of the project as well as the financial needs of his staff. Noma Mexico also supported local communities and created a scholarship fund for Mexican culinary students. All of these factors might help in justifying a $600 dinner but the uniqueness of the experience might have been a stronger deal-clincher.

In Tokyo, chef Yoshihiro Narisawa’s eponymous two-Michelin-starred restaurant prides itself on its unique offering. With dishes like Bread of the Forest and Soil Soup, its Satoyama-inspired cuisine respects seasonality and the balance of nature, which is reflected in an ever-changing menu. “Narisawa offers things that one can experience only in Narisawa on that day,” says the chef. “In Japan there are 12 seasons. It is a long country from the north to the south so we have diverse ingredients. The ingredients that Narisawa uses are safe, secure and organic. One can try them only in Japan. They are seasonal ingredients that can be taken only for one week.”

At the heart of Narisawa’s concept is sustainability and responsibility for the natural environment so while the food is not cheap, it does not cost the earth. But as well as responsibility for the planet, chefs also have a responsibility to their customers, according to Danish chef Christian Puglisi. His Relae restaurant in Copenhagen adheres to a “no muss, no fuss” policy of minimalism, which allows the certified organic food to sparkle even if the dining environment doesn’t and helps make customers’ money go further.

43

FOOD FOR THOUGHT

“Ever y restaurant has a responsibility to deliver value for money,” says Puglisi, whose Scandinavian-Sicilian heritage can be found in dishes such as his pizza with hoost (hay cheese). “[It] is about lining up expectations and ambitions and whether you meet those or not. To successfully do so you have to have a price point in mind. I have often had greater culinary experiences in smaller venues at lower price points because they exceed expectations.”

Responsibility is something chef Rodrigo Oliveira doesn’t take lightly. His Mocotó restaurant in an unfashionable part of São Paulo, Brazil, is an example of what he calls “democratic gastronomy”. His philosophy enables ordinary people to eat award-winning Michelin Bib Gourmand standard food at ordinary prices.

The signature dish mocotó is a hearty stew of cow’s feet with beans and vegetables, which has been refined from a recipe made famous in São Paulo by Oliveira’s father. Its simplicity and accessibility ensures his customers keep coming back for more.

“We focus on the essential part of a great experience,” says Oliveira. “We don’t have fancy furniture or linen napkins or exotic ingredients. We offer a comfortable place with warm hospitality and try to make ordinary produce look extraordinary through care, creativity and passion. And it’s working. We are serving nearly 20,000 people a month, which is another factor that helps us to keep prices low. To have lower margins and make higher volumes is also effective.”

From left: Danish chef Christian Puglisi, Mocoto in São Paulo and food being plated in Copenhagen’s Relae

“Being successful in restaurants is about lining up expectations and ambitions and whether you meet those or not”

So what makes Oliveira’s customers feel their money has been well spent? “Good value for money in the restaurant business means that you have great food, hospitality and ambience for a reasonable amount of money. Value is all about perception and it is the reason that sometimes a regular $20 meal can seem more expensive than a great one for $50.”

If value is about perception and perception is subjective, simple food and decor at a low price surely offers an inclusive experience that almost everyone can appreciate. But what about those who demand exclusivity, not defined by price but by concept – food that is experimental, avantgarde and cutting edge? Mugaritz, on a tiny hilltop near San Sebastian in Northern Spain, offers diners what chef Andoni Luis Aduriz calls “techno-emotional cuisine” in a stunning wood-panelled haven of innovation. Hailed by GQ magazine as “the most adventurous restaurant in the world”, its unflinching creativity is legendary.

An alumnus of Ferran Adria’s El Bulli restaurant, Aduriz recognises that the question of value goes far beyond price, quality and expectation.

“From here onwards, we enter into an intricate spiral where personal arguments and perceptions intersperse beyond objective data,” he says. “We could extend the same question to wine, a clock or a sculpture. We will perceive the approach and configuration of an observer as extraordinary, unique and personal. His perception will be conditioned by the value he gives to what is in front of him and its price, which is very different from what he would be willing to pay.”

45

FOOD FOR THOUGHT

46

With dishes like edible river stones made from potato and apples encased in mould resembling white velvet, Mugaritz confounds its guests with a kind of culinary trompe l’oeil that defies objective judgment. So does it offer value for money?

“We try to do this with pedagogy and sincerity but it is not always achieved,” says Aduriz. “This is because what one customer perceives as extraordinary, another finds detestable. There are those who think that a dish with sprouts, vegetables and herbs – even if they are wild and exclusive – is food for cows and others perceive a steak as a piece of corpse.

“For some people, the importance of the organic, local, cultural, ecological, sustainable or handicraft, comes at a higher cost if you calculate the invoice. Mugaritz offers all of that as well as creativity and risk, which not only has a cost but also requires the effort in order to be appreciated and this is always controversial.”

Mugaritz is a restaurant where everything is topend, from the highly conceptual food to the beautifully serene setting. But how about a restaurant that offers none of the above? Is it still possible to get value for money at a place that, well, isn’t very good?

Step forward, Birmingham’s Mr Egg. These days Birmingham is a culinary destination with six Michelin star restaurants (more than any British city outside London) and a vibrant street food scene. But once upon a time it was famous only for its balti cur-

Andoni Luis Aduriz checks the food bought at the market in the southern French village of Saint-Jean-de-Luz

“We enter an intricate spiral where personal arguments and perceptions intersperse beyond objective data”

ries and Mr Egg, a bog standard greasy spoon with a giant silk fried egg nailed to the ceiling.

“Many moons ago Birmingham had a restaurant – if you could call it that – that centred its entire menu around the humble fried egg,” says Tom Cullen of lifestyle and culture magazine I Choose Birmingham. “Its tagline? Eat Like A King For £1.This was seriously good value for perfectly runny egg and crispy chips. It was, by and large, an incredibly friendly atmosphere aided, surely, by the insanely jovial offering. People seemed to warm to the weirdness of the venue and you would catch yourself chatting to strangers on the neighbouring table for an hour longer than you had planned to be there.”

Despite capturing the hearts and stomachs of a city, everyone’s favourite greasy spoon changed.

New ownership and a move away from its fried egg roots saw Mr Egg enter a downward spiral and finally crack. Its closure last month prompted the broadcaster and BBC Radio 6 Music DJ Lauren Laverne to tweet “Just heard about Mr Egg. Gutted for you, #Birmingham.”

What made the original Mr Egg such an institution was not fancy, innovative food or garish decor.

There was no wholesome family recipe or high concept. But it had charm - and charm goes a long way. Which, surely, is a lesson even the most expensive Paris gastro palace might learn?

Lauren Razavi takes the temperature of the high-end London property market and discovers there might still be bargains to be had

CAPITAL

GAINS

CAPITAL GAINS

T

50

he inner London borough of Kensington and Chelsea first captured the attention of elite property buyers in the early 17th century. Its green fields, clean air and proximity to the capital made it an appealing location for a nobleman to build a stately home and some 400 years later, Kensington and Chelsea’s aristocratic character is very much intact.

Eaton Square, in the borough’s Belgravia district, was declared the most expensive street in England in December last year. Buyers hoping to acquire one of its white stucco-fronted mansions or apartments should be prepared to part with an average of $ 22 million. Away from Eaton Square, the average price of a home in Kensington and Chelsea is nearly $ 1.8 million with larger, semi-detached properties fetching $8 million.

Kensington and Chelsea is no longer an oasis on the fringes of the capital, although anyone walking its streets at night could be forgiven for thinking they had stumbled into a sleepy suburb.

Silent roads and darkened windows are a familiar sight across some of the priciest neighbourhoods. But homeowners here are not simply heading to bed early or working late. Many live abroad and are watching from afar as their London assets gather value.

Nearly 20,000 London homes went unoccupied for more than six months last year, according to figures from the Department for Communities and Local Government. And the borough with the greatest number of ‘ghost homes’ is none other than Kensington and Chelsea. About 1,400 dwellings in the soughtafter area are either second homes or ‘buy-to-leave’ properties purchased purely as investments.

Research by Lloyds Bank found the average house price in Kensington and Chelsea skyrocketed from $386,000 in 1996 to more than $2.3 million last year. Similar increases were recorded in the capital’s other high-end boroughs: Westminster and Camden saw increases of $1.5 million and $1.1 million respectively. It is little wonder then that foreign and domestic buyers were eager to get their hands on the city’s premium properties,

London’s most expensive areas, such as Eaton Square and Knightsbridge, see transactions in the tens of millions of pounds

particularly as the UK pre-Brexit offered a stable political and economic climate. Investors in the capital felt comfortable leaving their fortunes in a historic townhouse or a luxury apartment.

“London has always been seen as a safe haven, both in terms of its politics and rule of law,” says Nicholas Finn, executive director at Garrington, a UK property search consultancy with offices in London’s Mayfair district. “There has always been that natural safety and comfort with London property and the fairly easy process of purchasing has also made it attractive.”

But London’s air of stability was somewhat harmed when the UK voted to leave the European Union last June. In the year since the referendum, the volume of transactions in London’s property market has dropped considerably and property firms are feeling the strain. Foxtons, which operates in some of the capital’s premium postcodes, reported an 11.4 per cent fall in revenues last year, blaming the Brexit vote for having “brought transactional activity in London to a halt.”

The capital’s luxury property market had already begun to stagnate before the referendum, however. Buyers of second homes and investment properties were faced with a three per cent increase in the stamp duty land tax from April of last year. The tax affects anyone buying land or property at a cost of more than $162,000 for residential properties and $194,000 for non-residential homes.

There was a rush to complete transactions before the higher rate went into effect, with residential property advisory firm

CAPITAL GAINS

Almost 20,000 homes went unoccupied for more than six months last year in London

51

CAPITAL GAINS

52

CAPITAL GAINS

Luxury house prices in some of London’s most expensive districts are down more than 10 per cent this year and land values are also dropping

London Central Portfolio estimating that 25 per cent of all sales during 2016 took place in March. Despite the surge in activity, though, sales in prime central neighbourhoods were down 21 per cent in the 12 months from December 2015 to December last year.

“Transactions above $6 million are pretty rare today,” says Tim Mycock, development director at Reditum Capital, a finance provider for property transactions in the UK. “The people who would have traditionally bought these types of assets would have been high net worth individuals from around the world. Having access to the EU and the markets there is of interest to these buyers. At the moment they are waiting to see what sort of deal is agreed between the UK and the EU.” In the meantime, sellers are having to entice hesitant investors with lower prices to offset Brexit fears and the impact of increased stamp duty. In the year up to April, the average price of a London home dropped 1.5 per cent according to Rightmove, an online property portal. The decline has been felt most sharply in the inner boroughs, where average house prices fell year-on-year by 4.2 per cent. But if the capital’s central high-end neighbourhoods aren’t delivering swift price appreciation, buyers looking for income or capital gains can look elsewhere: the city’s up-and-coming outer boroughs.

53

CAPITAL GAINS

Belgravia is one of the wealthiest districts in the world

54

In the mid-19th century, when many of London’s grand terraced mansions were built, construction work was also taking place in the city’s Royal Docks. Located in what is now the eastern borough of Newham, the docks were once a major hub for trade and global commerce. But time wasn’t as kind to the docks as it was to the housing stock in Belgravia and the advent of container cargo forced them to close in 1981. Soaring unemployment and poverty followed, and a 2010 government report named Newham as one of England’s 20 most deprived districts.

Strange, then, that in 2016 the borough was, in terms of house prices, England’s fastest-growing local authority area. But thanks to an extensive regeneration programme, which included a successful bid to bring the primary venue for the 2012 Olympics to Newham’s Stratford district, the borough is on the up. What is more, investors hoping to get a foothold in London’s buy-to-let property market should note east London has some of the UK’s best rental returns. In April, Newham and nearby Barking and Dagenham were estimated to yield the highest returns in the city at 4.9 and 5.5 per cent respectively.

But speed is of the essence. Buyers looking to cash in on regeneration should identify potential hotspots before markets become overheated. Thankfully, it does not take a crystal ball to spot areas where property is likely to appreciate in value or which will have high rental demand. Good public transport links, for example, will make a neighbourhood attractive to London’s many commuters.

The Crossrail line, which will connect London’s western suburbs to their eastern counterparts via the city centre, is currently under construction and due to open next year. Commercial property and investment management firm JLL has estimated residential prices around Crossrail stations could rise by up to 16 per cent by 2020.

Investors should also pay attention to the movements of young businesses in the tech and creative industries. Start-ups often cannot afford commercial rent in London’s inner boroughs and will look to less expensive areas. The prime example is Shoreditch, a now-hip neighbourhood in the east London borough of Hackney, which saw 15,620 new businesses set up between 2013 and 2014.

CAPITAL GAINS

IN NUMBERS Residential prices around Crossrail stations could rise by

16 per cent by 2020

Post-Brexit London is a buyer’s market with prices

9 per cent lower than at the start of the year

And where businesses go, residential buyers and renters follow. Shoreditch saw a 46 per cent increase in house prices between 2012 and 2015, according to property consultancy firm Knight Frank. Keeping an eye on the commercial rental habits of the capital’s young innovators is a good way to foresee the next major growth area in residential property. In today’s terms, one key indicator is the appearance of co-working spaces, open-plan or shared offices with flexible rental agreements that make them ideal for freelancers and young companies.

“Co-working is increasing in popularity with a range of businesses, from start-ups to more established firms, requiring the flexibility to expand or retract their occupational space and overheads at short notice,” says Toby Bidwell, operational director of TCN UK, a commercial property developer which regenerates disused buildings as office space. “Location is key and with the cost of renting in zone one [in central London] reaching record heights, we find our locations in [outlying] zones two and three increasingly popular, due to great transport links into central London.”

Do expanding investment opportunities across London spell the death of buy-to-leave purchases in the city’s prime central areas? Value in historically desirable neighbourhoods isn’t going to vanish overnight, especially as the pound falls in currency markets. Foreign buyers dreaming of a home in central London could well find currency fluctuations mean a property that was once outof-bounds is now well within budget. For example, an American buyer moving to prime central London would have received a discount of 21 per cent between the EU referendum and February this year, thanks to the falling value of sterling, according to Knight Frank figures. Buyers from China would have seen a 17 per cent saving while Russians would have saved 28 per cent.

“Property forecasts are notoriously tricky to get right in the current climate,” says Camilla Dell, managing partner at Black Brick, an independent property buying agency. “Most forecasters, however, are predicting London property prices will remain flat over the next two years while the UK negotiates its exit with the EU. We think the lower end of the market under $1.2 million will

55

CAPITAL GAINS

56

increase more than properties above $2.5 million, due to more holding their breath but a small majority are not hanging on favourable stamp duty and supply-and-demand dynamics.” to their cash. A survey by online estate agency eMoov found Post-Brexit London is quickly becoming a buyer’s market. that 57 per cent of property sellers and 59 per cent of propProperties in the city’s prime central postcodes were selling at erty buyers still intended to go ahead with planned transacan average of 9.1 per cent lower than their listed asking price in tions ahead of the general election. The British prime minister the first quarter of this year, according to property data tracker Theresa May called the election with just eight weeks’ notice LonRes. Foreign investors looking to cash in on the low-value so any election-related uncertainty that does shake property pound could also find sellers are more willing to reduce prices to markets should be shortlived. shift homes as transaction volumes cool. Given these favourable “Having a snap election means any hesitancy from property conditions, foreign buyers should assess their property require- buyers or vendors will have much less of an impact,” says Penny ments and look to London. In a city of nine million, there are Mosgrove, chief executive at Quintessentially Estates, a global many options for investment. property search service headquartered in Belgravia. “It could be a While price growth cools and the number of transactions positive decision for the property market in that it will bring some drops in prime neighbourhoods, opportunities open up else- certainty ahead of the Brexit negotiations.” where. “There’s always value in Regardless of the terms of the UK’s the medium to long term within exit from the EU, London will remain the London property market in all an important city on the global stage. areas,” says Ben Wilson, director of Even a ‘hard’ Brexit (in which the UK Residence One, a luxury properreaches no agreement with the EU on ty development firm. “London proissues such as free trade and the free vides property at all price points, from movement of people) will not dimin$125,000 studios in Stratford to $100 ish the grandeur of properties in its million houses in super-prime locaprime central districts. Investors contions. It depends on an individual’s cerned about the long-term impact requirements and whether the focus of current political turbulence should is on income or capital gain but there rest assured: London’s reputation as a really is something for every investor.” world class property hub wasn’t built As the UK prepares to go to the Top: Crossrail will change the dynamics of the central city in a day. And it won’t be demolished property market Above: properties for sale in Chelsea polls on June 8, property buyers are in a hurry.

H E N L E Y

A PA RT M E N T S

ENJOY THE RIVER’S PANORAMIC SCENERY Henley Apartments Now Launched On one of the most dramatic stretches of the River Thames lies Fulham Reach, a thriving development set within beautifully landscaped gardens and riverside walkways offering you a selection of on-site cafés, restaurants and exceptional leisure facilities.

The Henley Apartments feature a premier collection of 2 and 3 bedroom apartments with open plan living areas and floor to ceiling windows which allow you to enjoy the panoramic views over the River Thames.

Discover more at www.fulhamreach.co.uk

Prices from £2,225,000* Tel: +44 (0)20 8003 6770 Email : enquiries@fulhamreach.co.uk

Proud to be a member of the Berkeley Group of companies

Photography and CGIs are of Fulham Reach and indicative only *Price correct at time of going to print.

ADAPT OR HOW WILL CONSULTANCY GIANTS FIT INTO A DIGITAL FUTURE?

DIE: With billions of dollars at stake, how will the world’s largest management consultancy firms fare over the next decade as the business landscape undergoes a dramatic transformation?

Hannah Smith investigates

ADAPT OR DIE

T

60

he origins of management consultancy can be traced as far back as the late 19th century but growth took off in the 1930s and during the period of globalisation that followed the Second World War. By the 1960s, this American export had landed on Europe’s shores.

Booz Allen Hamilton and McKinsey were the frontrunners and in the 1970s and 1980s, the big accountancy firms began launching their own consultancy arms, taking growth in the sector to the next level.

Today, the global management consulting industry is estimated at about $130 billion, representing just over half of the total global consulting market. The three biggest global markets are the US, accounting for 43 per cent of the total, the UK and Germany. Growth is concentrated in the socalled ‘big four’ – Deloitte, EY, KPMG and PWC – although other major players such as McKinsey, Boston Consulting Group and Accenture are also growing strongly. Source Global Research found the big four outperformed the market to grow nearly 12 per cent last year. Fiona Czerniawska, co-founder of Source, explains that a stronger global economy has been a tailwind as consulting tends to do well when GDP is growing. “The second reason is that there has been a huge wave of interest in technology – digital tech and latterly around AI and robotics – and all of that drives change and certainly drives work for consultants.

Thirdly, senior executives in many businesses just think this is a normal way of doing business.”

What value do consultants bring to a business to justify the exorbitant fees they are rumoured to charge? Ask a consultant and they will tell you they offer objective expertise clients simply don’t have inhouse. But why pay all that money just for a fresh pair of eyes? Dr Joe O’Mahoney, associate professor of management consulting at Cardiff Business School, says it can help companies get a handle on complex problems, launch a new product or con-

quer a new market. “You need a good brain on that because it can make or break a company,” he says.

Another useful tool to management consultancy is that chief executives can use them to do their dirty work, adding legitimacy to tough decisions.

“Clients might get management consultants in to tell the company something it already knows but that sounds better coming from an outside source.

For example, if you are closing a department, it looks better if McKinsey said to do it,” says O’Mahoney.

They can also get things done quicker. Whether it is expanding, cutting costs, investing in new technology or navigating regulation, people at the top of companies are spinning a lot of plates. “Management consultants become a very important source of help when companies need to get something done quickly,” says Czerniawska.

Above: A café for Deloitte employees Right: Ian Bremmer, president and founder of Eurasia Group (left) and Dominic Barton, global managing director of McKinsey and Co

ADAPT OR DIE

Consulting companies have been forced to widen the net when looking for staff due to the fierce competition from technology companies such as Google and Facebook

“If you are a CEO facing an immediate crisis or a long, slow war of attrition, you need to be able to act and consultants can help make things happen in a way organisations cannot always do for themselves.”

Big consultancy firms have a reputation as being quite mysterious. Many are not public companies, nor are they known for being media-friendly and there are stories of top secret projects and using code words for clients. Are they really as secretive as all that? O’Mahoney used to be a consultant and says the answer is “yes and no”. “There were always secret squirrel projects. Even the consultant wasn’t allowed to talk about who the client was. Sometimes it was military or maybe there was just a non-disclosure agreement if they were doing a deal or launching a new project. My experience is that client confidentiality is very important. Clients don’t want you to blab about their secrets but equally, people come to you because you know client secrets.”

Of course if your client is, say, a government department, the last thing they want is to be lambasted in the papers when the details of their spending on consultants is revealed. But another reason for the secrecy is the use of mystique as a marketing tool.

“With the top management consultancies, it is like a relationship. There is something quite sexy when you meet someone and there is a mystique about them, it makes them alluring,” says O’Mahoney. “McKinsey and others have that. They never talk to the press and they are a partnership, not public, so it is impossible to find out how decisions are made. They cultivate this on purpose as it is very attractive.”

When you think about management consultants’ hiring practices, the first thing that comes to mind might be the university milkround, where companies set up stalls to try to entice hungry young graduates through their doors. But clients are no longer so happy to take business advice from 20-something MBA graduates with no real world experience. Hiring graduates is still important to consultancies – global business school Insead

61

ADAPT OR DIE

reported the industry snapped up 46 per cent of its MBA students last year – but they are increasingly looking for people with tangible experience in business. This includes senior people from financial regulators, former civil servants and technology experts. They are also casting the net more widely geographically, looking to emerging markets, for example, rather than just the Ivy League universities in the US. But there is fierce competition for the brightest from start-ups, tech giants like Apple and Google and investment banks.

Don Leslie is founder of Career s and Consultancy, which offers independent careers advice to business schools and universities.

Previously he worked as a recruiter for the management consultancy industry. He says the milkround still matters but a different trend is also emerging. “Within the last 12 to 18 months some of the larger firms have been turning their attention to school-leavers. There is a war in trying to attract talent so the sooner companies can get their claws in, the better.”

But they are not paying more money to attract the top talent, instead the focus is on selling the benefits, such as the variety of the work and the client base. “The thing consultancies say is: ‘Wouldn’t it be really cool to work on the issues that keep the CEO of an organisation awake at night?’ It’s a great learning experience so that’s really the sell.”

62

The old cliche goes that management consultants steal your watch and tell you the time

Apple’s chief executive Tim Cook.

Tech companies such as Apple are proving more lucrative than consultants for many MBA graduates

Research suggests millennials might be harder to keep on the payroll in future – they are idealistic, not given to employer loyalty and will move on after two or three years in a job. Will this cause a skills shortage for consultancies? Leslie says no.

“Consultancies tend to lose people anyway in a three-to-five-year period because of lifestyle issues.

We talk about work-life balance but it is all work and no life. Consultants can expect to travel maybe 70 per cent of the time. From the outside, staying in nice hotels and flying business class might seem attractive but it gets a bit wearing, as does working 60 to 70 hours a week, so there has always been a relatively high turnover.”

The old cliche goes that management consultants steal your watch and tell you the time. Perhaps that was the case once but these days a fancy PowerPoint presentation and a few buzzwords are not enough to make a client write you a blank cheque. They are demanding more, procurement departments are scrutinising spending ever more closely and competition in the consulting space has never been more intense. All this adds up to a big squeeze on fees.

“If you ask partners what keeps them awake at night, it is fees,” says O’Mahoney. “The collapse in consultancy fees has been a big issue for the industry. If you have a trendy angle like disaster recovery or big data, there are still opportunities to charge decent fees. There’s still good money in the really wicked problems but the rest is under pressure.”

As a result, there has been a very gradual shift away from the traditional time-and-materials-based pricing model toward performance-based and fixed fee pricing. But Source has worked out only two per cent of consulting fees are actually paid based on the performance delivered because it is difficult to measure the success of many projects. “How do you decide who is responsible without creating a cottage industry of reporting and metrics and so on? It is harder than you might expect. Some projects lend themselves to quantifiable benefits better than others,” says Czerniawska.

The most lucrative business line in the near future is digital transformation and firms are jostling for a slice of this pie, which Source says is worth about $20 billion, or 15 per cent of the entire market. Alan Leaman, chief executive of UK trade body the Management Consultancies Association (MCA) says this is the fastest growing area. “It is not traditional tech consulting, it is about business planning and conduct for the digital age.

Management consultancy is delivering huge value at the moment. What you need is not just technically expert people but advisors who really understand how businesses and customers work.”

ADAPT OR DIE Insead students in Singapore. Forty-six per cent of its MBA students moved to consultancies in 2016

63

ADAPT OR DIE

64

Other major growth areas are navigating regulation and political uncertainty that affects businesses, with events such as Brexit presenting a lot of new angles for consultants to work. Meanwhile the end of unfettered globalisation and higher barriers to international trade could prompt a restructuring of global supply chains, a change that would keep consultants busy.

Consulting is a client-driven industry and clients’ needs are evolving. As businesses innovate and become more nimble, especially in the technology space, will the consulting behemoths adapt to serve this new generation of clients? There are already several indications that big consulting is willing to go outside its comfort zone to keep winning business.

Multi-sourcing is a good example. This is when consultants join forces with competitor firms, academics, digital agencies, or whoever can offer the specialist expertise needed for a project.

“Someone once told me it was like getting hedgehogs to mate – prickly and they make a lot of noise,” says Czerniawska. “These are not necessarily organisations that feel comfortable working with their competitors but if you look at some of the very big projects that happened over the last 10 to 15 years, a lot of them have been done as a consortium of different firms, so they have been getting to grips with this for a while.” Leaman adds that the MCA’s member firms have been talking a lot about collaboration lately, recognising the world is changing and they

Mitt Romney and William Bain Jr at Bain’s offices in Boston

need to change too. “We are in a new world because of the financial crash and the rapid advance of digital technology and this means what is being asked for is new, original, difficult and uncertain. Really skilful consulting firms are prepared to admit they cannot do everything and they should not try.”

Consulting firms were designed for a different era so will they still dominate a decade from now?

Source is predicting seven per cent growth for the industry this year but it remains to be seen whether it can sustain this growth rate with several forces of disruption on the horizon. One of these is the ‘Uberisation’ of consultants, where clients treat them more like freelancers, hiring them on a short-term basis rather than forming long-term partnerships.

There could also be a threat from crowdsourced consultancy, which is a way of getting many different brains working on a problem in real time. We are already seeing firms investing in this themselves, such as Deloitte with its Pixel platform, as it spots potential.

But as O’Mahoney says: “Big group dominance has not been shaken at all over the years. If anything, it is entrenched.” The power of these companies’ alumni networks, the influence they wield, and the high barriers to entry means they have little to fear from competitors. If they lack the specialism of a minnow in the sector, they can simply snap them up. “If a small firm has a great team that knows about 4G products or big data strategies, they will be very valuable and clients will go to them but within a year they will have been bought up by a McKinsey,” he adds.

Skilful firms are prepared to admit that they can’t do everything and they shouldn’t try Leaman notes that as business becomes ever more sophisticated, the things consultants are doing today will look run of the mill in five years’ time and everything will have moved on. “The story of the last 60 years is how extraordinarily good this industry is at regenerating itself in response to changing conditions,” he says. “The prizes will go to the fresh thinkers, the innovators, the people who spot the trends before anybody else.”

THE UNDERGROUND ELITE

THE UNDERG

66

THE UNDERGROUND ELITE

ROUND ELITE

With tech billionaires and the rest of the super-rich buying underground bunkers and getaway islands, David Whelan investigates the elite’s doomsday options

67

THE UNDERGROUND ELITE

T

he super-rich are just as scared as anyone. It’s true. Imagine for a moment the most luxurious penthouse you can – floor upon floor of luxurious, state-of-the-ar t apar tments, gyms, swimming pools and cocktail bars. Now, flip it upside and drive it into the Earth, like a cork into the open maw of a wine bottle, so that the lobby is at the surface level and the top-floor restaurant about 20 floors into the Earth.

This is the future – where the finest living arrangements are not cast high into the skyline but, rather, are burrowed away beneath our feet. If you think this is fanciful, you are wrong.

In a recent interview with The New Yorker, Reddit chief executive Steve Huffman suggested 50 per cent of tech billionaires are buying bunkers or islands. Perhaps for some, the clearest icon of the hideaway home is Richard Branson, chairman of the Virgin Group and sole lord of Necker island, a 30-hectare retreat that can be rented out to anyone – for the princely sum of $80,000 a night. The Obamas were the most recent high-profile residents, presumably to celebrate no longer having the fate of the world in their hands. But there is surely a reason for this upswing: a secret bunker or a secret getaway island is becoming the ultimate covetable item. Traditionally, of course, the height of luxury was just that: the height. It seems baffling to go deep when the sky is the limit – almost as if this new movement is driven less by desire to show off wealth and more to hide. But from what?

It should come as no surprise that the world is in turmoil. Currency values yoyo, political parties drift further apart, countries continue to settle their disputes with guns rather than words. The icecaps are melting, the waters are rising; cities such as Boston and Miami look out onto their shorelines with increased worry. Environmental migrants continue to move outward from the danger zones in Africa and Asia. Governments interfere in each other’s business, with invisible, digital hands while every day people take to the streets to protest, to show their anger. The one per cent is blamed for a multitude of issues – from inequality to bureaucratic corruption.

There is, in short, clearly a lot to be worried about and it is only natural to be more worried when there is even more to lose.

68

The bunker is accessed through a hidden tunnel within the town and guarded by nuclear-grade doors

Bill Gates (above) is investing millions in a seed bank (right) on the Barents Sea near the Arctic Ocean, some 1,100 kilometres from the North Pole

In 2008, property developer Larry Hall purchased an abandoned missile silo roughly 70 miles west of Kansas City for the sum of $ 300,000. He then went to work converting it into 15 luxury, self-contained units – which he has sold off for $3 million a piece. In an interview with CNN, Hall described the survival condo as a “mini cruise ship”, and in some respects, he was right. There are climbing walls, gyms, a movie theatre, swimming pools, entertainment spaces. But in others, he was not. A cruise ship is appealing for its mobility. we go on cruises because they transport us. This silo is rooted in place, like a splinter under the thumb. It isn’t a luxury trip but a last refuge; you don’t hop on and hop off, you enter and you never leave.

It creates a “semblance of normal when things outside are anything but normal”, according to Hall. This doesn’t ring necessarily true. According to reports, owners of these units actually end up coming two or three times a year, which sounds like a holiday. They are being used not for a sense of normal – because whose conception of normal is a bowling alley 30ft under? Instead, these are places to escape to. It’s a natural urge: when the world gets too much, we long for a safe, secure space. Think of all the movies and television shows that feature one of its characters miserable and locked within a bathroom, refusing to come out. These last-chance bunkers – because that is what they are – are the ultimate childhood safety fantasy, a great pillow fort filled with all your favourite toys, and only those with the password can enter.

These properties function as investments, insurance policies. When the inevitable happens – global war, civilian uprising, alien invasion, digital

THE UNDERGROUND ELITE

69

THE UNDERGROUND ELITE

70

hacking – these bunkers represent a place to go and to hide. The issue, however, is how viable these properties would be in a post-apocalypse world. There is always the ideal of the property run by generator, with endless food from aerogardens. This is fundamentally flawed thinking. When the world ends, fighting against it by hiding in a hole seems absurd. Perhaps it is more preferable to actively work toward preventing whatever great screenwipe is coming. The idea of supporting one or two people for the duration of a lifetime for no particular end, other than to sustain those lives, seems ridiculous, especially when one recalls these bunkers cost upwards of $3 million. Hiding under the ground is a cowardly way to preserve wealth. Then there is the issue of arrival. Kansas is not the most connected place on the planet and yet it is also not that isolated – making driving or flying a slightly difficult conundrum. Luckily, Hall provides long-range armoured vehicles that can cover almost all of America in one trip and are immune to bullets.

Perhaps a better alternative would be to use the financial clout to help work against whatever entrop-

Necker Island, Richard Branson’s Caribbean getaway, is a typical billionaire escape from the rat race

THE UNDERGROUND ELITE

ic forces are planning on destroying the status quo?

What is the point of being rich and alive if you are stuck underground? There’s a strange irony to all this. Billionaires did not become billionaires without a canny ability to manipulate the future by predicting it and trading on it – so this new obsession with last-resort housing suggests they may know something we do not.

Perhaps it is simply that the super-rich are reverting to a time of great stress and anxiety. With the period after the Cold War dominated by a vision of progress and healthy unity – think the Spice Girls, Michael Jordan and the International Space Station – military bunkers disappeared from the consciousness. They were empty vessels, memories of a time where fear loomed large. Well, those old terrors are now the new terrors – and it makes some sense that those with the means to protect themselves would do everything in their power.

What is more concerning is that it is the tech and finance billionaires who are furnishing their underground nests. These are the precise people who have designed the algorithms that unify policies and markets. We have seen recently, with Russia’s supposed intervention in Brexit, the American election and the French election, that chaos is easy to stir up and how easily the dream of globalisation and a world brought closer by the internet can be torn apart. It seems both worrying and quaint that this certain set of people are driving the revival of holes in the ground. The pioneers of the future are the first ones, when it all gets a little tough, to plunge back into the past.

The survivalist movement – called preppers – is not a new one. There are myriad ways the world could end. It might be starting right now, the game-over, off in some far-flung Russian laboratory or American missile base. Our world continues to exist in a relative state of harmony primarily because of a continued agreement to fulfil obligations: go to work, be kind, feed your family. But when, or if, we stop following the contract, it is best to be prepared.

In England, the government maintains a London resilience guide for residents in the case of a worstcase-scenario; in America, a man was discovered to be keeping 5,000 gallons of his own saliva, due to its antibiological qualities.

The silo is rooted in place.

It isn’t a luxury trip but a last refuge; you don’t hop on and off, you enter and never leave

New owner Gary Pipes tours his missile silo complex in Lone Jack, Missouri, including one of three huge underground bunkers. Other buyers have converted similar facilities into a home, a scuba diving pool, even classrooms

The online world is rife with prepper information and forums and shops. You can buy, in bulk, Mountain House 24-hour ration packs at a single click or have 500 bottles of water delivered to your secret hideaway for as little as $400. Crossbows are also a prepper favourite – reusable and easy to maintain, they represent another return to the past, something more natural.

Nature is the key here, for while traditional preppers seem keen to either hunker down or set loose on the land, this new breed of super-rich techno-preppers are instead hoping to replicate or keep alive precisely the sort of lifestyle that presumably ended the world in the first place. Private cinemas, bars, bowling alleys – these are the symbols of capitalism and wealth, which, if maintained into the apocalypse, will surely only profligate the very same issues that caused it in the first place. Within Hall’s survival condo, residents can have any vista they would like projected on the LED screens that line the walls: wouldn’t it be lovely to pretend you live on a Bahama beachfront as the world falls apart?

If, however, there is interest in buying a luxury bunker, the options are varied and wide. For Londoners, it is not out of this world to suggest that you might be stepping over one of them as you cross the street for a coffee.

Then there is the ancient Burlington Bunker in Corsham, Wiltshire, which is up for sale by the British government. Boasting an area of 35 acres, its 22 divisions are connected by a whopping 10 miles of tunnels, which you can navigate by the handily provided battery-powered buggies. Amenities – albeit slightly outdated – include an infirmary, a bakery, office space, two large living rooms and a variety of workshops. Originally conceived as a hideout for the British government in case of nuclear

71

THE UNDERGROUND ELITE

72

war, it has sat unguarded for the past 13 years (and had been a government secret for the previous 50). Supposedly the bunker can fit up to 4,000 inhabitants, although it is ranked as “at risk” due to a severe issue with damp. A brief inspection of the photographs released by the government tell you all you need to know – this is more 28 Days Later than La Grand Bellleza. Regardless, it is surely only a matter of time until an investor buys it and transforms it into an underground super-city.

The Oppidum, located in a secret valley in the Czech Republic, is a ready-made home for any potential doomsday survivor. From the air, it is a 323,000sq ft patch of grassland defined by soaring walls and a set of buildings.

But dig beneath the surface and you will discover the most exclusive hideout in the world. Even their website is locked by a password. The Oppidum’s vision is a simple one: provide the wealthiest with an above-ground town, with access to a secure bunker world beneath in times of desperate need. The bunker is accessed through a hidden tunnel within the town and the huge, nuclear-grade doors seal within a minute. Comprised of just seven residences, the bunker offers a state-of-the-art underground garden, a library (if you’re in there for the long haul) and a variety of surgical and medical facilities. The entire compound is controlled from a single underground compound centre – heat, power and crucially, communication with the outside world, all run through this tiny kernel.

What makes The Oppidum so special is its secrecy. The exact location of the site is known only to investors and those employed by the company. The setting of the Czech Republic is down to its mountainous, difficult terrain, as well as the country’s relatively pacifist reputation. Whether or not this will stop cyber-war or nuclear bombs is unclear, but the concept feels relatively sound. Naturally, the bunker was originally constructed by the Soviet Union, in collaboration with the Czechs, during the Cold War. Another such example is Vivos Europa One in Germany and, again, built by the Soviets. Vivos functions on an invitation-only basis but plans to offer extra incentives such as zoological attractions, an archive of the world’s greatest pieces of art and a DNA vault containing the genomes of thousands of donors.

For the smaller investor, Vivos also offer up to 575 private bunkers in South Dakota for just $25,000 a pop.

Converted from a crop of Army Corps weapon store hous-

The main blast door is closed at a nuclear bunker site on the Woodside Road industrial estate on February 4, 2016, in Ballymena, Northern Ireland

Credit: terravivos.com

Techno-preppers don’t just want to exist after the apocalypse, they want to live in the same style that they are accustomed to

Vivos bills itself as the largest survival community on Earth

es, these bunkers can fit up to 10 people and boast 24-hour surveillance but the money only provides you with the shell – there are no swimming pools or roaming zebras here.

It is telling, ultimately, that every single one of these new worst-case-scenario homes were built during a time of great international fear and tension, a period when everyone was turning against the centre and looking outward, anxious that their neighbour was about to betray them. It seems that this mindset is creeping back into fashion but driven by a new world government – the financiers, the tech developers, the overseers of algorithm. If, then, there is a repeating pattern, it is not out of this world to suggest a conclusion: just as the Cold War ended without the explosion of bombs, perhaps this current period of turbulence will also fizzle out with a satisfying whimper. And maybe we can sit back and enjoy the irony of it all: that the great minds of the future are now looking to hide themselves in the bunkers of the past.

MOH VY51217 - 01/07/2017

Capital charm Budapest is one of Europe's most beautiful cities and the Boscolo hotel a magnificent nod to its past

JUNE ISSUE 138

75

LIVING / HOTEL

BOSCOLO HOTEL, BUDAPEST

WHERE TO STAY

Budapest

PRICE From $400 per night

budapest. boscolohotels.com

 BUD

76

B

udapest is a city of grandeur and nothing illustrates that more than the Boscolo Hotel, located in an ornate palace more than a century old. The adjoining New York Cafe has been a mainstay of the Hungarian literary scene since it opened and gives the hotel a vivid connection to the past.

The Boscolo has a cocktail room and, of course, a spa, resplendent with natural stone and Swarovski crystals.

The rooms are huge and many of them overlook the Grand Boulevard, Budapest’s main thoroughfare.

The highlight for many, though, is the aforementioned cafe, which is resplendent in brass, marble, silk and velvet, a living memory of turn-of-thecentury Budapest.

Budapest is one of Europe’s great cities, divided in two by the mighty Danube, which is criss-crossed by huge, ornate bridges. The city is a splendid mix of art nouveau architecture, romantic side streets, a vibrant nightlife and a burgeoning food scene. It’s a city that wears its history on its sleeve, from the still visible bullet holes from the Second World War and

JUNE ISSUE 138

the 1956 uprising to the memorials that remember the Soviet occupation.

It is also a forward-looking city with buzzing food, fashion and design industries, a young, creative population and an energy that puts most other European capitals to shame.

While it has been compared to Paris and Vienna, Budapest – which was added to the Unesco World Heritage List in 1987 – has a magic all of its own and is a beautiful place to visit at any time of the year.

FROM THE CONCIERGE

SEE

The Royal Palace Located on the Buda side of the river, the Royal Palace offers spectacular views across the city.

Home to the Castle Museum, the Hungarian National Gallery and the National Széchenyi Library, it’s one of the city’s cultural and historic highlights.

EAT

Local dishes Hungarian food has come to prominence of late with Budapest showing promise as a foodie destination.

Try the gulyás, a thick meat and potato broth. Also recommended is the Gundel palacsinta, a crepe filled with chocolate, rum, raisin and walnuts.

DO

Rent a bike A great way to see the city, the Bubi public bike system allows users to pick up and drop off their bikes at the myriad bike stations across the city.

77

JUNE LIVING / INVESTMENT

ISSUE 138

OEM X TRIUMPH Custom motorbike manufacturer OEM has turned a standard Triumph model into a stunning piece of machinery

3

1

Mobile dash display with Bluetooth capability

Built from layers of different density foam and topped with grained brown leather, the seat is comfortable and beautiful

2

Customised risers, Renthal Fatbars and a set of new control units with integrated levers

4

T120 black wrapped in Metzler Sahara tyres

L

ocated in the county of Norfolk, England, OEM has established itself as one of the best custom bike builders in Europe.

Its growing popularity has seen a number of big brands looking to collaborate – this was a Triumph Bonneville T120 that was given to the firm. The team wanted to create something with a nod to Steve McQueen’s off-road Triumph racers with a back-to-basics vibe. After stripping the bike down, the team added new forks, brake calliper fins, risers, Renthal Fatbars and seat. One of the highlights is the new mobile dash display, which uses the Torque app and connects to a Bluetooth sender unit plugged into the ECU. Information such as speed, revs and temperature is transmitted to OEM’s own custom dash display, complete with Smiths-style ‘chrono clocks’. The result is a stunning piece of machinery, classy but with a powerful punch. oldempiremotorcycles.com

79

LIVING / STYLE

What to pack ...for summer weather in Sydney and beyond

Average temp

15°c

London Johannesburg Buenos Aires Brasilia

ALSO WEAR IN...

17°C 16°C 15°C 19°C

JUNE

SYDNEY

Chance of rain: 25%

WHAT TO SEE

80

THE ART GALLERY OF NSW With more than 30,000 works in its collection, the Art Gallery of NSW is one of Australia’s cultural highlights. With galleries devoted to Aboriginal and Asian work, as well as a huge photography collection, it showcases new and old work throughout its huge space. With

more than 40 temporary exhibitions and free admission, it’s a must-see for any visitor to Sydney. There is also a restaurant and cafe, which offer views of Potts Point and the Garden Island naval base. Located next to the Royal Botanic Garden, it is only a short and very pleasant walk to the Sydney Opera House.

JUNE

ACCESSORIES

ISSUE 138

Barton Perreira sunglasses $408

James Perse tote bag $340

Gucci stainless steel and rubber watch $925

1

2

4

5

3

81 1. Simon Miller hoodie $315 2. Dasher wool cardigan by Acne Studios $245 3. Outerknown tee shirt $170 4. Stüssy field jacket $163 5. Mélange jersey T-shirt $391

LIVING / STYLE

What to pack ...for summer weather in Madrid and beyond

Average temp

21°c

Lisbon Venice San Francisco Athens

ALSO WEAR IN...

21°C 20°C 19°C 23°C

JUNE

MADRID

Chance of rain: 10%

WHAT TO SEE

82

THE BERNABÉU One of Europe’s great stadia, the Santiago Bernabéu Stadium holds more than 81,000 people and has seen plenty of historic football over the past few decades. From Di Stefano’s Real Madrid in the 1950s to the current Champions League holders, the stadium is a byword

for continental glamour. There is no better way to see the stadium than by taking the official tour, which offers glimpses of the spectacular trophy room, a wander through the tunnel onto the pitch and a visit to the dressing room. The best time to go is on the morning of a match so you can catch a game after the tour.

JUNE ISSUE 138

ACCESSORIES

1

2

Gucci leather tote $2,600

3

Sachajuan colour protect shampoo $115

4

5

Annie Costello Brown earrings $272

83 1. Roland Mouret wool crepe dress $1,588 2. Figue safari embellished jacket $1,844 3. Vanessa Seward voile shirt $370 4. Haider Ackermann cotton shirt $669 5. Gucci satin pumps $968

LIVING / FOOD

Top table Buenos Aires’ culinary landscape, long the home of steak, is changing.

Allie Lazar explores the Argentinian capital’s burgeoning restaurant scene

BUENOS AIRES, ARGENTINA

A

thick hunk of steak, a plump grilled sausage, French fries, malbec wine and dulce de leche for dessert – the meat dens of Buenos Aires have served this same fare for decades. Parrillas, Argentinian steakhouses, have dominated the steakcentric dining scene for generations, grilling every part of the cow imaginable.

But in recent years Argentinian food has undergone a dramatic epicurean shift.

This year Buenos Aires was named IberoAmerican Capital of Gastronomy and for the first time ever, an Argentine restaurant won a spot on the World’s 50 best list.

Now more than ever locals are beginning to broaden their conservative meat-andpotato palates and young chefs are taking centre stage to honour regional food legacies in an innovative and contemporary way. Culinary travellers, it is time to eat your way around Buenos Aires.

La Carnicería (Thames 2317, Palermo), which translates to butcher shop in Spanish, was the first restaurant to rewrite the rules on Argentine barbecue. In 2014 Pedro Peña and Germán Sitz looked to redefine what a steakhouse in Buenos Aires was supposed to be and came up with an entirely new concept. “Meat is Argentina’s national icon but there are so many ways to cook it than just the traditional way,” says Peña.



84

EZE

Chori

La Carnicería puts a creative twist on standard meat dishes, which are customarily cooked on the grill over hot coals and presented alone on a platter. Instead of preparing mollejas (sweetbreads) with lemon and salt seasonings, La Carnicería caramelises the sweetbreads in molasses and cumin and places them on top of a corn cake with black garlic purée and yoghurt sauce. Provoleta, a typical cheese dish repeated on every steakhouse menu, is topped with a poached pear and diced tomato, pepper and onion while the homemade morcilla (blood sausage) is plated alongside a bright apple sauce and fennel slaw. Vegetables don’t see a lot of action in most parrillas but here the lone veggie plate, grilled pickled cabbage and broccoli salad, might be one of the best dishes on the entire menu. La Carnicería’s fast food sister restaurant, Chori (Thames 1653, Palermo), is just a few blocks away and puts a chef’s rendition on Argentina’s iconic street food sandwich, the choripán.

Choripán means sausage on bread and usually consists of just that – non-spicy Argentine chorizo sausage on a crusty bread roll. At Chori, diners can gorge on a handful of gourmet sausage sandwiches, including flavours like cerdo ahumado, a smoked sausage with sauteed mushrooms, lettuce, orange zest and garlic on cheeseencrusted fresh bread.

Even some of the city’s most timehonoured parrillas find ways for a reinvention. For over a decade Don Julio (Guatemala 4699, Palermo) has been a popular destination for fantastic grassfed beef grilled to perfection. Located on an unassuming corner in Palermo, the restaurant design takes its inspiration from Argentina’s gaucho countryside featuring wagon-wheel light fixtures, cowhide tablecloths and a traditional iron grill with V-shaped grooves. Acclaimed chef Guido Tassi joined the Don Julio team two years ago to redesign its line of sausages, dry

La Carniceria

JUNE ISSUE 138

Elena

Don Julio steak

85

La Carniceria

Don Julio Steak

LIVING / FOOD

86

aged meats and side dishes that go beyond the typical cuts, fried potatoes and simple lettuce with tomato salads. Hundreds of empty wine bottles signed by diners line the interior walls and the restaurant specialises in fine Argentinian wines, boasting one of the best curated lists in the entire city.

Open fire cooking is a major component in Argentinian cuisine and at Proper (Aráoz 1676, Palermo), rising star chefs Augusto Mayer and Leo Lanussol trade in the Argentine grill for a custombuilt wood-fired oven. Tucked inside an unmarked ex-mechanic shop, Proper became an instant underground hit amongst the city’s biggest foodies and top chefs. It is hard not to order everything on the seasonal menu, which features Argentinian-Mediterranean fusion small plates and changes depending on which ingredients are freshest in the market. Hits like smoked sweet potato with crunchy kale and blue cheese, handmade Sicilian sausage with pickled fennel and spicy chile dressing and roasted leg of lamb have the crowds queuing for hours. No trip to Proper is complete without trying its take on flan, an Argentinian dessert favourite made with dulce de leche and a dollop of vanilla cream – considered by many to be the best in the city.

Classic Argentine flavours shine at Elena restaurant (Posada 1086, Recoleta) in the Four Seasons hotel. Lush leather and wood decor, a wide spiral staircase and a large marble butcher’s table make the grand two-storey space the ideal setting for a celebratory feast of elegant porteño dishes. Inspired both by Argentina’s love for steak and its influence from Italian migrants, chefs Juan Gaffuri and Nicolás Díaz Rosáenz prepare refined house specialities like pumpkin and ricotta ravioli, beetroot orecchiette and a porterhouse made from prime Argentine kobe beef. Secluded in the hotel’s secret greenhouse garden, Nuestro Secreto shows diners what asado (barbecue) culture is all about. High quality ingredients are all sourced locally, like 800 grams of grass-fed short ribs slow-cooked over flaming barbecue pits and smothered in chimichurri sauce, Patagonian trout dressed with capers and pasta dishes like swiss chard gnocchi with tomato fondant.

After Argentina’s economic crash in

Elena

Young Argentinian chefs are honouring their culinary traditions while broadening the nation’s tastebuds 2001, a number of cooks turned to various supper club models as an alternative to opening a restaurant. The result: restaurantes a puerta cerrada, also known as closed door restaurants, a trend of unique dining experiences inside private homes, storefronts or other unconventional makeshift restaurant spaces. I Latina (Murillo 725, Villa Crespo) is a reservation-only puerta cerrada inside a beautiful refurbished home in residential Villa Crespo. Colombian native Santiago Macías brings a much-welcomed beef alternative with a deluxe eight-course tasting menu of Caribbean and Latin American flavours. The menu presents dishes like nikkei ceviche with smoked shrimp, sole and caramelised octopus,

braised beef shoulder lacquered in coffee and cane sugar and an Ecuadorian cacao truffle with sea salt and olive oil, with each course perfectly paired with boutique Argentinian wines.

Although not technically considered a closed door restaurant, Tegui (Costa Rica 5852, Palermo) hides behind a graffiticovered facade and an unmarked black door. “I wanted to be under the radar so I created a place that was a secret, not visible to the public,” says celebrity chef Germán Martitegui. When Tegui first opened in 2009, it was not advertised and only marketed through word of mouth.

Since then the restaurant has awed locals and travellers alike with its avant garde tasting menu, showing diners a collection of rare native ingredients Martitegui finds on his travels around the country. This year Tegui took the 49th spot in the World’s 50 Best Restaurants list – the first Argentinian restaurant ever to make the annual list, an accolade which is helping to put the country on the map as an internationally acclaimed culinary destination.

JUNE ISSUE 138

Nuestro Secreto

FIVE TO TRY 1. La Carnicería and Chori La Carnicería is the first restaurant in Buenos Aires to put a contemporary spin on steakhouse fare.

The massive meat portions will make any carnivore weep for joy, although don’t forget to make room for appetisers like caramelised sweetbreads and grilled cabbage salad. It has only two dozen seats and fills up fast so secure a reservation in advance.

La Carniceria

2. Proper Located inside an unmarked mechanic shop, Proper quickly became BA’s hottest restaurant opening of 2016. Chefs Leo Lanussol and Augusto Mayer traded in a conventional Argentinian grill for a wood-fired oven, which stands at the heart of the Mediterranean-influenced kitchen. Groups should order everything off the small plate menu.

3. Don Julio It would be a crime not to sample the famed beef and wine. Don Julio is known for giving the traditional Argentine parrilla experience, serving steaks with a stellar wine list.

Acclaimed chef Guido Tassi recently joined the team, honing every detail – from the exact number of days to age the meat to perfecting the housemade sausages.

4. Elena and Nuestro Secreto The Four Seasons’ awardwinning restaurants honour high quality local ingredients in an elegant way. In Elena, the soaring ceilings, lush furnishings and chequered tile flooring sets the tone for a celebratory meal while Nuestro Secreto pays tribute to the country’s barbecue traditions.

5. I Latina Even the biggest carnivore needs a break from eating meat.

Fortunately, I Latina serves an alternative with an eight-course tasting menu featuring seafood, poultry and seasonal vegetables. Set inside a refurbished casona in the residential Villa Crespo neighbourhood, this offers a regional flavour.

Buenos Aires Dining Tips: • Locals eat dinner late, typically between 9pm and 11pm.

Restaurants generally open for dinner service around 8pm.

• Grills tend to overcook steaks. If you usually order your steak medium to medium rare, ask for it jugoso.

• Always bring cash along just in case as many local restaurants do not accept credit cards.

• Making a reservation far in advance is usually not necessary.

87

LIVING / CONSUME

Photo realism The World Press Photo 2017 contest reveals the world as it is

88

T

he world’s best press photos will be showcased in the Centre de Cultura Contemporania de Barcelona (CCCB) until June 5 with a spectacular array of images on offer.

This is photojournalism at its finest and will feature work from around the world, including Jonathan Bachman’s Taking A

Stand in Baton Rouge, which saw Ieshia Evans standing her ground against riot police. Equally compelling is Daniel Etter’s The Libyan Migrant Trap, which shows two Nigerian refugees crying in a detention centre in Libya. One a lighter note, Ami Vitale’s work for National Geographic shows keepers dressed as pandas while Jaime Rojo’s stunning photo

reveals a carpet of monarch butterflies covering a forest floor in Mexico. While much of the work on show is harrowing, the World Press Photo Foundation contest aims to highlight the importance of quality visual journalism. If you are in Barcelona, this is a must-see.

Centre de Cultura Contemporania de Barcelona cccb.org/en/

JUNE ISSUE 138

Clockwise from opposite: Jaime Rojo’s photo of butterflies on a forest floor; Robin Hammond’s photo of a woman in South Sudan; Jonathan Bachman’s iconic shot of a protester in Baton Rouge and Ami Vitale’s photo of panda bear trainers in China

89

JUNE ISSUE 138

LIVING / COLUMN

Everybody Lies

By Seth Stephens-Davidowitz

A

t 6am on a particular Friday of every month, the streets of most of Manhattan will be largely desolate. The stores lining these streets will be closed, their facades covered by steel security gates, the apartments above dark and silent. The floors of Goldman Sachs, the global investment banking institution in lower Manhattan, on the other hand, will be brightly lit, its elevators taking thousands of workers to their desks. By 7am, most of these desks will be occupied.

On this day, information that will massively impact the stock market is set to arrive. Much of the real action in finance these days happens in milliseconds.

Goldman Sachs and other financial firms pay tens of millions of dollars to get access to fibre-optic cables that reduced the time information travels from Chicago to New Jersey by just four milliseconds (from 17 to 13). Financial firms have algorithms in place to read the information and trade based on it – all in a matter of milliseconds. So, what is this crucial data that is so valuable to Goldman Sachs and numerous other financial institutions? The monthly unemployment rate.

The rate is from a phone survey that the Bureau of Labor Statistics (BLS) conducts and the information is three weeks (or two billion milliseconds) old by the time it is released.

When firms are spending millions of dollars to chip a millisecond off the flow of information, it might strike you as strange that the government spends so long to calculate the unemployment rate. Indeed, getting these critical numbers out sooner was one of the Alan Krueger’s primary goals when he took over as chairman for former president Barack Obama’s Council

of Economic Advisors in 2011. He was unsuccessful. “Either the BLS doesn’t have the resources,” he concluded, “or they are stuck in 20th-century thinking.”

With the government not picking up the pace, is there a way to get at least a rough measure of the unemployment statistics at a faster rate? In this hi-tech era, do we really have to wait weeks to find out how many people are out of work? One potential solution was inspired by the work of a former Google engineer, Jeremy Ginsberg. Ginsberg noticed that health data, like unemployment data, was released with a delay by the government. Ginsberg suspected that people sick with the flu are likely to make flu-related searches. These searches, he thought, could give a reasonably accurate measure of the current influenza rate.

Indeed searches such as ‘flu symptoms’ have proven important indicators of how fast the flu is spreading.

Meanwhile Google engineers created a service, Google Correlate, that gives outside researchers the means to experiment with the same types of analyses across a wide range of fields. Researchers can take any data series that they are tracking and see what Google searches correlate most with that dataset.

I put the US employment rate from 2004 to 2011 into Google Correlate. One of the highest searches was [the game] Spider Solitaire. Now, I am not arguing that Spider Solitaire is the best way to predict the unemployment rate but I have found that a mix of diversion-related searches can track the unemployment rate – and would be part of the best model predicting it. The value of big data is not its size – it is that it can offer new types of information to study, information that has never been collected.

“The value of big data is not its size – it is that it can offer new types of information to study, information that has never been collected”

90 From Everybody Lies by Seth Stephens-Davidowitz © 2017. Reprinted courtesy of Harper, an imprint of HarperCollins Publishers