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OU S ARE IL N TH T E NE TS S U NEE EE. S OU S ARE Tiny competition: One wayward hedgie’s been investing with the wrong kind of happinessnegation industry of late... Find their AK-47 and win yourself a mystery prize. Email us with your answers to competition@ squareupmedia. com. Terms & conditions apply.

Editor’s Letter


Original cover image by Larry Downing / Reuters M






Square Up Media 4 Tun Yard Peardon Street London SW8 3HT Tel: +44 (0)20 7819 9999 Fax: +44 (0)20 7819 9840 EDITOR


Mark Hedley ART EDITOR





Monty Agarwal, Mike Baghdady, Lou Cooper, Bernadette Costello, Fiona Duncan, Gareth Groves, James Gurney, Jon Hawkins, Margaret Kemp, Jennifer McCormick, Simon Mills, Johan van Overtveldt, Sam Taylor, Wayne Weddington III ADVERTISING

Michael Berrett, Mark Edwards, Vicky Miller, Christian Morrow, Kevin Rudge, Alex Watson ACCOUNTS

Steve Cole, Natalie Jackson MANAGING DIRECTOR


Broglia Press


t’s been an interesting year for anyone who lays wagers on popularity stakes. If there was a market in public opprobrium it would have been a clever punt indeed to have successfully predicted the movements of the tabloid hatred index. Ever since Diana’s death in the Pont de l’Alma tunnel in 1997, I have become used to journalists being considered social pariahs, akin to the people whose job it is to burn the dead in Indian society, or wipe the bottoms of old people in Norwich. Confusing ‘scum bag paparazzi’ with ‘gentleman of the press’, has meant that, for a decade at least, answering “I’m a journalist,” to the “...and what do you do?” question at a dinner party has left people looking at you like they’re not sure whether to tell you their life story (“You know what you should write about?” “No.” “Me!”), or stone you to death, (“Journalist? Didn’t you kill our Queen of Hearts?”). So it has been with some schadenfreude that we hacks have watched the public hatred index swing dramatically over the course of the year, and never once touch us for a change. Earlier this year it was bankers (of course, because they caused the recession. And you’ll get no argument from me there). Then it was hedge fund managers (because you were shorting banks and making money while others lost their jobs. Boo. Hiss. Ker-ching!). Then, come spring, it was politicians (for managing to get the unemployed masses to pay for ‘flipping’ houses so many times they couldn’t remember what address to give the cab driver when they stumbled out of a Westminster brothel at 4am). And now, come the Autumn, it’s the bankers again (hoorah!) because of the really very stupid bonuses they’re planning to pay one another while benefitting from public money and reduced competition. So, we would think, that hedgies might have a clean run at things. A chance to, if not look good, at least not look like public shit numero uno. So, could everyone please stop getting busted and diverting their funds to terrorist organisations? [see p19] Thank you. That would help a lot. Martin Deeson - Editor

Contributors JOHAN VAN OVERTVELDT the director of the Belgium-based think tank VKW Metena, which works on a breadth of economicsrelated issues. He is the author of Bernanke’s Test. To read his final judgement on Alan Greenspan’s tenure as chairman of the US Federal Reserve, turn to p44.

WAYNE WEDDINGTON an investing professional with more then twenty years of experience in the financial industry. He is currently a senior portfolio manager on one of the world’s top hedge funds. Read about the day when he first realised that he was a small fish in a big pond on p47, ‘Swimming with Sharks’.

JENNIFER MCCORMICK the owner of the Helium Foundation. She has been working in the art world for the past 15 years, and is well respected among her peers for her canny acquisitions and ability to deliver exactly what her clients want and need. She is why Helium has become renowned as one of the best art dealerships.

MIKE BAGHDADY ...has worked as a commodities trader, stock trader, futures analyst, options trader and an instructor for both foreign currency exchange and equities markets. Now his web-based school, Spyglass (, gives traders a quantifiable edge for increasing their success.




A u d e m A r s P i g u e t u K L t d , Te l : + 4 4 ( 0 ) 2 0 7 6 5 9 7 3 0 0 - w w w. a u d e m a r s p i g u e t . c o m

44 ISSUE.10

32 28 13












Most funds of hedge funds lack the skills to understand a manager’s alpha generation process, says Monty Agarwal.

Simon Mills tracks down the men with a stranglehold on the market for the world’s biggest diamonds.

The Fed under Alan Greenspan is given its final judgement by author and think tank director Johan van Overtveldt.





Buried your head in the sand for the last couple of months? No matter, we’ve gathered all the important stuff in one place, including BA’s new route to Las Vegas, more crooked hedge fund managers and the world’s finest whisky.



Hedgie heaven at Hélène Darroze.


Having weathered the financial storm, the watchmaking industry has come out fighting with more exotic materials and innovative complications than ever.

47 50


The contemporary art scene is thriving. Helium Foundation’s Jennifer McCormick selects a few of her favourite works.


Mike Baghdady argues that a rules-based trading strategy is required to maximise profits and deliver them consistently.


There’s a pecking order among hedge fund managers: Wayne Weddington III says it’s directly derived from the old adage ‘size matters’.



75 71 58 76



“ Lack of 75


Hong Kong is weird, wonderful and full of hotels, but the Mandarin Oriental remains the best of them all, says Sam Taylor.

When Nicolàs Catena built his vineyard high up in the Andes he made a star of the humble malbec grape. Gareth Groves hails the man who revolutionised the Argentinian winemaking industry.







There’s no better way to see the African wilderness than through the eyes of Samburu and Masai tribesmen. Lou Cooper taps into her inner David Attenborough on safari in Kenya.

The UAE property market took an almighty dive in the first quarter of 2009. But Bernadette Costello has noticed a return to prosperity as a new air of optimism floats in on the breeze.




The Jumeirah Carlton’s Rib Room is a London institution, and Martin Deeson finds its melt-in-the-mouth beef to be the equal of only one...



money is the root of all evil ”


Britain’s hedge fund managers are lagging behind their US counterparts when it comes to talking to the press. Come on people! Why so shy?

Mark Twain

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A Fist Full of Funds MONTY AGARWAL argues that funds of hedge funds are guilty of masking their true

identity, and despite using big words, have little talent. The time for change is now...

A FUND OF hedge funds, as we all know, invests not in any underlying security but in a portfolio of hedge funds in order to minimise idiosyncratic risk. If you quiz the management team of a fund of funds on their investment process, you will hear very eloquently designed phrases, such as top-down, bottom-up approach; combination of qualitative and quantitative analyses; fluid and dynamic processes etc. While such scholarly phrases sound very impressive, they mask the truth that most funds of funds do not have the necessary skills to truly understand the trading strategies that they are invested in. Therefore, it is no surprise that most funds of funds have not been able to deliver the promised expertise to their investors and have also irked quite a few hedge fund managers as a result of their flawed approach at conducting due diligence on hedge funds. As I (and I am sure a lot of other hedge fund managers) have discovered, very few funds of hedge funds actually understand a manager’s alpha generation process, but instead rely entirely on a backward-looking data-

mining approach. A typical fund of funds will have monthly performance data of a hedge fund and will run statistical analysis on that data. It will apply efficient portfolio construction principles and pick a portfolio of hedge funds that have the highest returns with the lowest volatility. It is no surprise that the investment committees at the funds of funds comprise people who have extensive experience in statistical analysis, traditional asset management, relationship banking, marketing, legal, and other fine professions. But herein lies the fundamental problem with the funds of funds as well as the hedge fund allocation industry as a whole: the investment committees do not have professionals who have actually traded capital and managed traders. Imagine that a football franchise wants to recruit new talent. Instead of sending the coaches to scout the talent, the franchise sends stadium builders, groundskeepers, and concession stand employees to do the scouting. As crazy as it sounds, that is what the fund of funds investment process is akin to.

Investing in hedge funds is about investing in a group of traders. Most of us in the hedge fund industry have spent several years working as proprietary traders reporting to trading managers who understood our strategies, money making process, risk management methodology and who did not react adversely to every drawdown. In my opinion, the model of a fund of funds should be the same as that of a proprietary trading desk of a bank. Capital allocation decisions should be made by people who have significant experience in the markets as traders. These allocators would then have the capability of truly understanding the risk and return attributes of their hedge fund investments and therefore their capital allocation processes would be rational and information-driven rather than driven by backward-looking statistics, rumours, and herd mentality. A properly designed and staffed fund of funds will not only provide true expertise to its investors but also be a welcome investor at a hedge fund. H ‘The Future of Hedge Fund Investing’ by Monty Agarwal is out now. (£45, Wiley)



hedGe MAGAzine ISSuE 10



wine seller’s stellar cellar

flying the flag to sin city

The French auctioneer Piasa will offer a glimpse into one of the richest wine cellars in France when, on 7-8 December 2009, an exceptional selection of wines from the highly acclaimed caves of La Tour d’Argent (will be presented to the public. The selection of 18,000 bottles from the 450,000-strong cellar has been carefully chosen by head sommelier David Ridgway. Acquired directly from the Châteaux or producers and all carrying the La Tour d’Argent stamp, none of these bottles has ever been offered to the market in any other form than being part of the restaurant’s distinguished wine list. Estimates vary from several hundred to several thousand euros per lot with a total sale estimate in the region of €1m. Highlights include Château Latour (1975, 1982, 1985, 1988, 1989, 1990, 1994); Château Lafite Rothschild (1970, 1982, 1997); and Puligny Montrachet Referts Sauzet (1992). There’s also a spirits collection, which includes the oldest bottle in the sale, Fine Champagne Clos du Griffier from 1788.

These may be constrained times for BA and its beleaguered chief exec, the affable but sorely tested Willie Walsh – who has to turn around a £400m loss – but the flag carrier isn’t giving up the ghost without a fight. It is taking on its old nemesis Virgin – Moriarty to BA’s Sherlock Holmes – or ‘parking its tanks on Virgin’s lawns’ as one sector analyst put it to HEDGE. How so? Recognising that the lucrative business travel sector is one of the casualties of the crunch, it is taking on Virgin’s monopoly on some long-haul destinations. One of these is Las Vegas. Sin City needs BA as much as the other way round – local TV presenter Jeff Gillan says, “This city needs every visitor and every dollar it can get.” Gillan estimates that every BA flight that lands in the desert strip brings with it £160k of non-gaming revenue. Let’s hope the reverse is true for Walsh – if the gamble pays off, he can celebrate with a break to Jamaica’s Montego Bay, where he has also just launched against Virgin. And the new route from London City to New York makes three of a kind for BA. ▶

33(0)1 53 34 10 10;

G o i n G L o n G

selling shares in the bank”


a twist i invented: buying and

Reproductions of four of the legendary watch marque’s most iconic models over the past 50 years – and a Smythson leather box to keep them in. £18,800

“As a kid i played Monopoly with

George Soros


hedGe MAGAzine ISSuE 10


P oet’s Cor n er

I strolled down to Fifty for a glass of pink poo The barman quietly said, “We can’t serve you. Your company’s account is now closed down And it’s the same for firms throughout town.” Oh, it’s hedgie, this, and hedgie that, and hedgie go away; But it’s “Good evening, sir” when the bonuses begin to pay, – The bonuses begin to pay, my boys, the bonuses begin to pay, Yes, it’s “Good evening, sir” when the bonuses begin to pay.


by eugene costello

(after Tommy – apologies to any descendants of Rudyard Kipling)

I went to a dinner party in Camden Town And sat next to a beauty in a long silk gown, She smiled and purred all evening long. I still had it, I was on song. nAMe oF the PoeM For it’s all very pleasant when the wine flows bY fIRSTnAMe SuRnAMe And she’s admiring the cut of my clothes, She’s admiring the cut of my clothes, chaps, the cut of my clothes, Yes, it’s all very pleasant when the wine flows. Over the after-dinner cocaine, she asked, “What line are you in?” Tongue loosened by coke, I joked, “Fucking the yen. Crunch – what crunch? Being on two and twenty, When times is hard, I still rake in plenty. For it’s an ill wind that blows no one any good In fact, I’ve just bought a penthouse in St John’s Wood – A penthouse in St John’s Wood, love, in St John’s Wood, Yes, it’s an ill wind that blows no one any good.”


She stared at me aghast with a look of pure hate, Then told me she’d had a company called Britain is Grate That sold antique fireplaces to the Far East, But it had gone bust – to famine from feast. And the recession, it seemed, had all been my work, A typical hedgie, she said, I was a shallow jerk, – A know-the-cost-of-all, the-value-of-nowt jerk, Yes, the recession, it seemed, had all been my work. And now even the Tories are turning against us Baby-faced George and all his bonus-bashing fuss Though it wasn’t us who created this mess (Well, maybe a teeny bit, I confess). But they’ll be back kissing arse when the sun’s out to play And everything is rosy, and our funds start to pay, When everything is rosy, chaps, and our funds start to pay, Yes, they’ll be back kissing arse when the sun’s out to play.




10,000ft 1,000 16

The number of views that YouTube gets on average every day. That works out to 11,574 page views per second.

Price of a measure of limited edition Johnnie Walker 1805 at Gleneagles Hotel

Height from which a skydiver survived after parachute failure

Calories in Burger King’s Windows 7 Whopper

M Y M AY FA i r . # 3 ▶ leylanDii’s

latest w1 winner: hÉlÈne DarroZe

Mount Street has become one of the world’s most avant-garde retail destinations. It’s now home to Lanvin’s flagship store, London’s first Marc by Marc Jacobs and Goyard’s only outlet outside of Paris. But what really makes it a hedgie haven is where you can go to take the weight of your feet (and your wallet). Hélène Darroze at The Connaught is not just a Michelinstarred restaurant, but Mayfair’s most comfortable place to relax after a last-minute shopping session. The seats are bliss, falling somewhere between squidgy marshmallow and fluffy cumulus on the ‘soft scale’. The restaurant offers a very reasonably priced weekday all-inclusive menu, with three courses, two glasses of wine, water and coffee all included in the price of £42. But if you’re lucky enough to go on a Saturday, you’ll be party to a buffet par excellence. Forget fat Americans piling plates high with tuna pasta. This is a very French buffet. To start, highlights include cured meats, rustic pâtés and Bayonne ham and the finest seasonal cheeses from Bernard Antony’s famous cheese cellar in Alsace. For the main course, guests can choose from a number of dishes including Darroze’s signature blackand-creamy Acquarello rice with squid, chorizo, confit tomatoes and a parmesan foam. But the best is saved until last with a dessert buffet that includes warm waffles prepared table-side on an antique French waffle iron as well as exquisite, freshly made, French pastries from head pastry chef Johannes Bonin. Not bad for £29 all in. If the wife asks where you are, simples innit? Just explain that you’re shopping for her Christmas present. Hélène Darroze at The Connaught, Carlos Place, W1; 020 3147 7200; ▶



3 Burlington Gardens Mayfair, London, W1S 3EP T. 0800 011 2704

hedGe MAGAzine ISSuE 10



PUtting the ‘fUnD’ BacK into ‘fUnDaMentally DoDgy’

Sometimes confessing feels so good... Nicholas Levene, who is estimated to have spunked a cool £200m of the funds he managed for clients including Richard Caring (The Ivy, Le Caprice) and Brian and Anne Gloag (Stagecoach), told the Mail on Sunday that he was addicted to spread betting and estimates that he lost “between £50m and £70m” gambling. Then came Rajakumara Rajaratnam, Galleon’s billionaire founder, on $100m bail in the “largest hedge fund insider-trading case ever”. Not only do prosecutors say he was caught with his fingers in the till, he is also being sued by victims of violence in his native Sri Lanka after, so they say, giving $5m to the Tamil Tigers. So come on people – make a clean breast of it. A Ponzi scheme targeting pensioners? Billed a dinner ‘accidentally’ to clients? Had a crafty fag in the office when you worked late? Get it off your chest. Email us, with ‘I Confess’ to

sole traDer

Celebrating its 130th Anniversary this year, Northampton shoemaker Crockett & Jones continues to produce some of the finest quality ready-to-wear men’s shoes. The luxurious Hand Grade collection provides an exceptional range of fashionable yet sophisticated high quality men’s styles, including the Selborne, pictured here. This lean and elegant semi brogue oxford, has a straight cap, and subtle brogue punch patterning on the toe – prices start at £385. 0207 929 2111;

whisKy BUsiness

You may have noticed on p15 that Zenith is releasing reproductions of four of its most iconic watches from the past 50 years, along with a beautiful leather presentation case by Smithson (£18,800). Timeless, elegant and a collector’s dream. That said, if you’re more ‘time out’ than ‘time waits for no man’, this could be the one for you. Celebrate a big win by sinking into a Chesterfield in front of a roaring fire nursing a tumbler of what might be the finest usquebaugh (water of life) known to humanity. The Dalmore has assembled a unique and exceptional whisky, The Dalmore Oculus, to be sold at auction by Bonhams in Edinburgh on 18 November. It has been created by master-distiller Richard Paterson from a number of vintages. The first, from 1781, has traces of “dried fruits, ripe bananas, treacle toffee and almonds”. Other vintages in the heady mix come from 1782, 1868, 1878, 1922, 1926 and 1939, adding depth of flavour, with an “incredibly intense oak, spice and bitter dark chocolate” finish. Tasty. H

Subscribe If you’re involved in the hedge fund Industry and work in london, you are entitled to a Free subscription to hedge magazine.

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p22 . DIAMOND DONS . The men who hoard super stones p28 . HAUTE JOAILLERIE . The best from Bond Street and beyond p30 . NEW FACES . Six eye-catching watches for the Autumn p41 . WATCH MEN . The maverick makers behind Urwerk


“When you’ve constructed a mechanism as wonderfully elegant as that in the Masterpiece Le Chronographe Squelette, it seems a pity to hide it behind a dial” Jon Hawkins The ones to watch . p32


JEWEL PERSONALITIES Diamonds may be a girl’s best friend, but super stones such as the Cullinan behemoths are more likely to be hoarded by a secretive band of the world’s richest men. By Simon millS 22

DENSITY: 3.5–3.53 g/cm3



REFRACTIVE INDEX: 2.418 (at 500 nm)


CRYSTAL SYSTEM: Isometric-Hexoctahedral


bAck In 1957, Ian Fleming, already famous for his 007 novels, published a piece of investigative journalism titled The Diamond Smugglers. Though based on fact, first-hand derring-do experience and anecdotal evidence, the book read like one the of the author’s more famous spy thrillers. In true James Bond-style Fleming travelled to Johannesburg and Freetown, to Paris, Antwerp, Beirut and Moscow, following what he termed “the greatest smuggling racket in the world – the illicit passage of diamonds out of Africa, to the tune of $28m a year”. “The diamonds that glitter so brilliantly on a beautiful woman’s throat may very possibly conjure a whole spectrum of crime, from simple theft to murder and treason,” wrote Fleming. “No other precious stone is so closely identified with man’s love of luxury, his greed and his rapacity. The fascination felt for diamonds is undeniable and universal, and this intense interest and curiosity extends to those who deal in them… especially in an unlawful way.” Fifty-odd years later, things may be more scrupulous and strictly regulated than they were in 1957 (there’s now an official and globally recognised electronic market for diamonds – Dealers Organisation for Diamond Automated Quotes (Dodaq) – and many stones are etched with the name of their origin mine to prevent the trade in immorally acquired ‘blood’ diamonds from war zones). Financially speaking, trade has certainly revved up a bit with approximately $9bnworth of stones mined annually, but the trafficking of diamonds is arguably every bit as mysterious, labyrinthine, greedy and rapacious as it was half a century ago, and the universal curiosity that intrigued Fleming so much remains. Take the case of the 507ct stone found at the famous Cullinan mine in South Africa by the Petra Diamonds company back in September this year. This is one of the largest high-quality diamonds ever

“ No one outside the inner

sanctum of the notoriously secretive diamond business knows whether the super stone has been broken up or sold to a private customer ”

unearthed, and thought to be worth in excess of £12.5m. “Initial indications are that it is of exceptional colour and clarity, which suggest extraordinary potential for its polished yield,” said Petra’s chief executive Johan Dippenaar shortly after the rock’s discovery. And since then? Nothing. No one outside the inner sanctum of the notoriously secretive diamond business knows whether the super stone has been broken up or sold to a private customer, whether it remains in South Africa or has been shipped to the US, the UAE or Russia. It could be already mounted on a pendant and hanging off an oligarch’s wife’s neck. Or it could be stashed away in safe somewhere or just be stowed away in a jacket pocket. There is no suggestion of anything untoward having taken place. It is simply that a stone of this size could only feasibly have been purchased by a handful of the world’s richest collectors or traders. “This is a part of the business that has been shrouded in mystery in recent years,” admits Keith Gerrard, managing director at Leviev Diamonds, the world’s biggest cutter and polisher of diamonds. “The cutting and polishing of such a valuable piece would not be taken lightly,” continues Gerrard. “Often a considerable amount of time will pass before we decide what we are going to do.” Weighing up the most profitable and dramatic way to divide a diamond used to be done by eye. Now computers and lasers do all of this painstaking work, and only polishing is completed by hand. ▶


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Want to buy a diamond? Vartkess knadjian, Md, backes & Strauss Buying diamonds is a very difficult thing. People are always trying to commoditise the diamond business and there is a great deal of easily available information on the internet – with a bit of research you can convince yourself that you know everything necessary to become an expert. Unfortunately, it takes more than a few hours online. Knowledge is always embodied in the consumer partner and that has to be a retail jeweller of long standing repute. (Backes & Strauss has been trading since 1789.) Diamonds are a long-term investment. I would advise clients never to look at a diamond purchase in terms of buying and trading. Over a period of time, through the proper channels, it will appreciate. But unlike gold or silver there is no quick way of making money out of diamonds on an open market or and I wouldn’t suggest using them as a hedge against inflation either. When it comes to picking a diamond, take advice and choose a fine stone of high colour, extremely good clarity and purity, well cut, polished beautifully with proportion and symmetry. Those sorts of diamonds always retain value. As for the world market in diamonds? There is no doubt that it will pick up in time. There are tremendously encouraging signs from new markets in the Middle East, the Far East, China, India and Russia. There is a long way to go… but diamonds are a ten-to-fifteen year investment. And even after that period of time, we’d suggest handing them down rather than selling.

▶ “The biggest, cleanest and most flawless diamond, say 90-120cts, taken from the stone may go on show at somewhere like the Smithsonian Institute for a while,” says jeweller Stephen Webster. People in the industry may get to know who has bought it but ownership won’t be publicised. After that, it will disappear… forever.” Chances are, the recent Cullinan discovery was snapped up by either one of the world’s two biggest players in the diamond business; Uzbekistan-born billionaire Lev Leviev, formerly resident in Israel now living mostly in the UK, or London’s Laurence Graff, Britain’s 36th richest man, according to the Sunday Times, with an estimated fortune of £1.5bn. Clearly, if Leviev did buy it, it was without

the knowledge of Keith Gerrard. Or, suggests Stephen Webster, they could even have gone in on the deal together. “When the amount of money required is that huge they sometime put a consortium together.” Leaving aside their latent decorative qualities, rough, uncut diamonds are to-diefor desirable for a very simple reason; for something so very valuable they are so very, very small. The really alluring thing about a rough diamond is not just its potential for outstanding beauty but its convenient and stealthy portability. Unlike sprawling real estate, a classic car collection or a portfolio of oil fields, rough diamonds can be slipped into briefcases or squirrelled away in suit pockets. This is fabulous but unobtrusive wealth in compact form. So, if you happen to find yourself in a sticky position with local government officials (or worse) breathing down your neck and you need to have it on your Berlutis and vacate a country lickety-split, the expeditious liquidation of business assets might be a problem. Opening the safe and simply clearing out a few rocks, however, is a little less hassle. Situations like this are all too common during an economic downturn, so could it be that the global credit crunch has actually been good for the struggling diamond industry which saw drop in retail sales as steep as 20 per cent in its core American market in early 2009? Leviev’s Gerrard chooses his words carefully: “At a certain level of business, yes. I am aware that some people have liquidated their assets and looked at investing in the rare diamond market. We have seen a huge increase of this during the current economic uncertainty and an influx of clients showing interest in diamonds for that reason.” The portability aspect, he admits, “is a crucial element” of attraction, and the idea that a rare stone’s high value tends to hold even in times of trouble. Best of all, unlike large amounts of cash or bars of gold, rough diamonds waltz through airport security checks with the haughty immunity of a British blue blood. Hard to believe, but to most of the world’s Customs and Excise officials, a rough diamond currently has the same duty-free status as a handful of gravel or a souvenir seaside pebble. Not every one is happy about this. Indeed, the reimposition of a rough

RINGING TRUE: Leviev ring with 6.85ct purplishpink diamond and a 6.16ct ‘D’ colour diamond.

diamond export tax is probably the single hottest point of debate in the South African diamond industry today. Even during periods in the past when a tax was levied, many assumed that exports were being ‘under-invoiced’ as the market price for rough diamonds added to the export duty would have eroded any competitive edge that exporters had. The general feeling is that an export tax would only encourage even more diamond smuggling. Security is, of course, a massive issue. But burly manpower, CCTV and bombproof metals aren’t the only way. Cojones, confidence and guile also play a part, oddly especially at the silly-money end of things. When the original 3,106ct Cullinan diamond, aka the First Star of Africa or Cullinan I, was discovered in 1905, for instance, its safe passage to the UK where a part of it would eventually be incorporated into the crown jewels was a carefully planned procedure. Detectives from London were placed on a steamer ship that was rumoured to carry the stone, but the sea route proved to be a clever diversionary tactic. The ▶

“ Rough diamonds waltz through airport security checks with all the haughty immunity of a British blue blood ”




rocky trade by georgina Wilson-Powell

PROMISES, PROMISES: The Lesotho Promise – the 15th largest rough diamond in the world, transformed by Graff from a 603ct rough gem into 26 flawless diamonds weighing a total of 223.35cts

▶ diamond on the ship was a red herring, intended to attract the attention of would-be thieves while the actual diamond was – get this – sent to England in a plain box via parcel post. Registered mail, of course. Even now, Laurence Graff is said to frequently produce multimillion pound stones from the depths of nothing more armour-clad than his blazer pockets and Stephen Webster travels through Customs with a bag of jewels under his arm. “That said, I do tend to cause quite a stir at customs,” he admits. So, if you have the odd £10m or £20m lying around, should you invest in a super stone? Unfortunately, it isn’t just a price issue but more a matter of access. You don’t just march into the murky diamond


Investing in diamonds sounds like a great idea. They’re portable, almost impossible to break and hold their value. They act as an international currency and they’re forever right? David Warren, head of jewellery at Christie’s, has some advice. “Diamonds are valued against the Rapport list, produced in America every couple of weeks. It tracks the value of diamonds all over the world. Diamonds are valued in US dollars so always think per carat in dollars, no matter where you are.” There are four ‘C’s to assess diamonds against: cut, clarity, colour and carat. They’re also graded alphabetically from D-Z, D being the purest white diamond imaginable. Every diamond from D-K should come with a certificate detailing its origins, and after J the stone will have a touch of yellow-ish colour. Warren explains: “Diamonds come in every colour, a result of an accidental colouring agent in the ground, such as boron or nitrogen. The rarest is red; there aren’t many of these in the world. Blue and green are also very rare and fetch record prices. Yellow and brown stones are more frequently found so are less expensive.” Christie’s recently sold a blue diamond, the Wittelsbach diamond, for a record $24m at auction, making it the most expensive diamond ever sold at auction. To give you an idea of its size, you could fit 50 Wittelsbach diamonds in your shirt pocket. Price and profit are also affected by shape. Around 80 per cent of diamonds are cut in Antwerp, despite 50 per cent of the world’s diamonds originating from Africa.

market and go straight to the top of the buyers’ lists. Getting in on the purchase of the newest discoveries is more often than not a noncompetitive battle involving just one client – the Sultan of Brunei, still Laurence’s Graff’s number one customer. With his help, the Sultan owns what Graff calls “the most royal of royal pieces and major gems” including Les Coeurs d’Afrique, two heart-shaped diamonds from Conakry, Guinea of 70ct and 25ct. It goes without saying that it is worth watching the markets. Diamonds may be forever, but away from D Flawless super stones, at the entry level, engagement rock sector values can fluctuate wildly and recently the diamond industry has seen prices tumbling. During 2009, De Beers cut

“A round-cut diamond is worth about 25 per cent more than any other shape, as there’s more weight loss when you cut a round diamond,” says Warren. “Naturally, diamonds grow in an octahedron but you don’t find them in a perfect shape. They’re usually broken as the ground has moved and crushed them, so they often come out of the ground fractured. “It’s much easier with a fractured piece to follow the shape it’s found in when cutting it, such as a pear shape or a heart shape. But if you cut a round stone, you lose much more of the original crystal so it’s more expensive.” Despite diamonds’ value continuing to rise year on year, Warren warns against betting on making a vast profit from buying and selling at auction. “Diamonds sell for what their true value is perceived to be, much in the same way that a stock market works. If someone buys something in one sale and sells it in another a couple of months later, they may make a profit, they make a loss, but it will be quite marginal one way or the other, depending on the mood of the room that day. They’re not going to make a 50 per cent loss or anything gigantic.” No matter what they cost, diamonds are still a woman’s best friend. Just ask Mrs Robert Charlton, the wife of the late philandering businessman, who was bought diamonds every time he strayed. A couple of months ago her jewellery box sold for just shy of £300,000 – working out to £6,000 for each of the 43 flings.

production by 40 per cent in an attempt to rally prices, Belgium’s exports of polished diamonds fell 18 per cent and exports of Indian cut and polished diamonds fell 31 per cent in the last six months. India, which has a 55 per cent share of the world’s diamond-cutting business, has been particularly hard hit with 200,000 jobs lost. Keith Gerrard of Leviev Diamonds maintains that rare diamonds – coloured diamonds being the most fashionable since the early 1990s – will always be the smart girl’s best friend and the most reliable investment for the boys. “What is rare today stands a good chance of being even rarer in the future,” he says. “The intrinsic value remains because the diamond remains rare.” H

More than meets the eye.

Pontos Chronographe. Sportiness meets elegance. Find out more: ÂŁ2,400


3 Burlington Gardens, Mayfair, London, W1S 3EP Tel: 0800 011 2704 or buy online at


Harry Winston Reflection pendant 45 baguette and two square diamonds (total 5.33cts).

Boodles Vintage ring Three-carat oval-cut diamond with two rows of tiny natural fancy pink diamonds.

A Few of Our Favourite Things Times might have been tough for some, but the world of haute joaillerie has had a sparkling year. Here we’ve selected our favourites from the finest jewellers on Bond Street and beyond





Leviev Diamond earrings Two oval-shaped diamonds (total 6.07cts) mounted with pave diamonds (.32cts).

Aurora bracelet 89 white and golden South Sea pearls (between 6.2210.10mm); 2.9cts of diamonds; set in 18K white and yellow gold.

Hirsh Cognac ring Three cognac diamonds (2.21cts in total) with 24 white diamonds (0.34cts in total).

David Morris Amira emerald earrings Platinum fancy-cut emerald (total 47.8cts) chandelier earrings with white diamond (10.49 carats) micro-surround setting.




Watch Me Now Editor of QP Magazine, JAMES GURNEY, selects six of the most interesting faces to clock this Autumn

Backes & Strauss Regent Baguette This is hardly a time for us Lords of the Universe to be seen flaunting our wealth and rubbing our obscene (erm... I mean, well-deserved) commission in the faces of the unemployed and largely drunken proletariat. It’s time to show some wellconsidered restraint... So following this principle, I proffer for consideration the £118,000 Backes & Strauss Regent Baguette. A diamond watch that is so serious about being a diamond watch that the normal rule against men’s watches being so adorned simply fails to apply. Even to an inexpert eye, the diamonds that Backes & Strauss use have a quality all of their own and with the 10.9cts of ‘ideal cut’ baguettes matched to a Franck Muller movement underneath – the watches are essentially a joint venture – the Regent is a sober option, at least in horological terms, to say nothing of having a face that will launch a thousand chips (on the shoulder). And while not exactly quiet, the statement made by wearing a Regent is one that even the most myopic observer will be forced to admire.

Girard-Perregaux Greubel-Forsey Invention Piece 3 If you wish to establish impeccable credentials as a watch collector of knowledge and understanding, there are few more sure ways to do so than wearing a Greubel-Forsey. The master watchmakers are concerned both with creating amazing flights of horological invention and with solving more prosaic problems of series production for industry clients such as Richemont. The result is a series of watches that are linked in terms of the challenges they set out to conquer. In Greubel-Forsey’s watches, the priority has always been precision, an aim that is not exactly unique, but which they approach with an engagingly practical approach that takes into account the way watches are worn in everyday life, as well as microengineering advances. With the £170k Invention Piece 3 the intricate marvels of the Tourbillon 24 Secondes Incliné are matched with an architectural setting that has been developing over recent years, if perhaps at a slower pace than the movements. A surprising last detail is the philosophy of the watch’s design and construction spelt out on engraved plates visible through the back of the watch. Meaning that you need never be lost for words in explaining the watch in which you have invested a small fortune.

1966 Full Calendar Girard-Perregaux’s 1966 Full Calendar is the watch you’re going to wear when you’re really grown up, the watch you wear when the very biggest trades are yours to make and the buck stops on your desk (and in your wallet). Quite apart from the seniority of Girard-Perregaux as a watch house, the company’s owner, Gino Macaluso, is possibly the best connected (think Larry Ellison, Bernard Arnault, Jean Todt) and is certainly one of the most widely respected characters in the business. The watch is a faithful replica of a design reputedly owned by Ian Fleming and certainly matches the description in From Russia With Love. It is named the 1966 after the Neuchâtel Observatory Centenary Prize for precision chronometers that the company won in that year and is so disobedient of the fashion for massive exoticallymaterialled, multi-dimensional supernova watches as to be positively heroic. The modern watch is based around the excellent GP3300 automatic movement which gives the watch day, date and month as well as a Moonphase, all of which are presented in perfect balance against a white dial, pink gold index and hands and a pink gold case. Large enough for contemporary tastes, the watch is still slim enough to leave your shirt-cuff in one piece. Not to be worn with torn denim, teeshirts, replica football strips or synthetic breathable fabrics.

1 2 30




Breitling Chronomat B01 If you’re in the market for a chronograph that comes with serious horological credibility, a price that is substantial (£5k+) rather than scandalous and a name that the rest of the world might have heard of, then the choice narrows to just two: Omega’s Seamaster Broad Arrow and the Rolex Cosmograph Daytona. Until now. Breitling has now complicated that choice with the Chronomat B01, which features the new, in-house Calibre B01. Breitling is a serious volume maker of watches and has the muscle and will to make up the difference. Until the advent of the B01, Breitling could never quite be thought of as having quite the same credibility as either Omega or Rolex. The quality of the company’s watches were certainly the equal of these two, while recognition from professional pilots has been of real value, but however well finished and modified, ETA/Valjoux bases are simply not valued as highly as an in-house movement. The B01 will be made in upwards of 50,000 a year and seems the equal of both the 3313 and the 4130, being designed from first principles to be robust, precise and easy to maintain. The 70-hour running movement includes a new system for adjusting the chronograph control functions and is housed in a case that is water-resistant to 500m. With five years of development behind it, the B01 is not being released untested into the world. So not just a pick of the year, quite conceivably the watch of the next decade – we give you the Chronomat B01.

Speake-Marin Skulls concept watch One of the more interesting independent watchmakers is Englishman Peter Speake-Marin. After training in London, he made the almost inevitable move to Switzerland at an early age – despite this being the age of digital communications and cheap flights, there’s no substitute for attending the local watering-holes to learn and develop as a watchmaker. Speake-Marin was also lucky enough to get taken on at Renaud et Papi – watchmaking’s equivalent of getting your hands dirty at McLaren or Williams. This, combined with a period at Somlo Antiques in London, has seen Speake-Marin, as an independent, try to develop a style that brings together the best of traditional English watchmaking and the best of contemporary skills and techniques. From the look of the Piccadilly and, particularly, the SM2 calibre, it seems that he has succeeded. The SM2 is his in-house designed automatic movement that will underpin future creations, and is a rare feat for someone working on his scale. While the Piccadilly and most of Speake-Marin’s output is firmly in this English style, he’s not averse to stepping onto wilder shores. A client request (later withdrawn) led to the Skulls Concept watch, a one-off piece that would become part of his 1in20 pièce unique series that houses the first 20 SM2 movements. And as some of the wilder horological creations of recent years recede from the limelight, Speake-Marin’s take on watchmaking very much looks like it has a firm place in the future.

Concord C1 Quantum Gravity Some ten years ago a radical watch meant something like a daringly large Panerai or a watch with, shockingly, a see-through case-back. Traditionalists seemed to have an iron grip over their design departments and any aberrations from the tried and tested paths of haute horlogerie were to be abhorred. Concord’s C1 Quantum Gravity is a measure of just how much distance watchmakers have travelled over the past decade and, just perhaps, represents the high-water mark of a movement to take watchmaking beyond the mantra of ‘form from function’. With its tourbillon set uncomfortably far from the central movement and linked by a set of four gear wheels, the Quantum Gravity flouts not only tradition but also engineering convention. This is the first watch that I have ever seen that risks its ability to function in favour of creating a design effect. There are watches out there that test the limits of the possible, to run novel displays or timing functions, but never just for the sheer sake of it. When Concord claims that the cantilever wires are there simply to provide the stiffness required for the gear wheels linking the tourbillon to run true, it is all too easy to believe. And given the work put into making gear wheels run true, scarcely credible. But, required or not, the cantilever is utterly different. Concord will make (and sell) ten pieces – with such an extraordinary approach the former may be much harder than the latter...



5 31



Bell & Ross

Patek Philippe

BR01-94 Carbon Fibre Here at HEDGE we’re suckers for carbon fibre, so the BR 01-94, with its strap, case and dial all honed from the magical black weave, is right up our street. Taking its visual and technical cues from aeronautical construction techniques, the watch is ultra-light and comfortable yet incredibly strong and hardwearing. ■ £7,000

Calatrava Officer’s Watch The Patek story began 170 years ago, and the officer’s watch occupies a unique place in the brand’s history. 2010 promises to be an exciting year for the Swiss marque: “Patek Philippe will continue to strengthen its product range with the introduction of new innovative movements,” says Patek’s Adrian Lurshay. ■ £16,780

The Time Fantastic

Horological innovation is going stratospheric as we set our coordinates to 2010. JON HAWKINS picks out the watches that are shooting for the stars 32



Corum Admiral’s Cup Tides 48 Big, bold and nautical, the Admiral’s Cup Tides 48 will tell you everything you need to know about ocean tides no matter where you are in the world, so your gin palace need never run aground again. Later this year Corum launches the Black Hull Black Diamond; just 10 pieces will be made, each including 72 black diamonds. ■ £4,750

Breguet Minute Repeater The minute repeater remains the preserve of just a few master watchmakers, and Breguet has moved the bar yet further by reengineering the complication with new materials and innovative positions for the gongs, gong holders and hammers. Fittingly, then, the Minute Repeater watch is an elegant blend of classic and modernist style. ■ £132,500 RRP





Azimuth SP-1 Mecanique Twin Barrel Tourbillon (TBT) Drawing its inspiration from contemporary supercar design, Azimuth’s SP-1 Mecanique TBT is an avant-garde beauty limited to 25 pieces. 2010 will see the Swiss horologists launch the Xtreme-1 extreme sports collection and the military tank influenced SP-1 ‘Landship’ ■ £67,495 westportoflondon .com








Audemars Piguet Jules Audemars Selfwinding Chronograph Blending 1920s elegance with striking contemporary style, this is the first piece in the Jules Audemars line to feature AP’s in-house self-winding chronograph movement. Some 400 parts, which can be admired through the exhibition caseback, lie behind the watch’s handsome and purposeful face. ■ £23,300 audemarspiguet. com




BRM V6-44 Customiser The latest creation from watchmaker and devout petrolhead Bernard Richards is the V6 Customiser, a bold and masculine automatic you can tailor to your taste by choosing your own combination of case, dial, hands and strap. Next year’s BRM line-up will include a 24 hour pilot’s watch and a ‘trirotor’ piece. ■ From €2,100 brm-manufacture. com




TAG Heuer Grand Carrera Calibre 17RS Steel & Rose Gold Few watch brands boast links to motor racing as strong as those of TAG Heuer, and the Grand Carrera can trace its roots back to the Heuer Carrera of 1963, itself named after a 1950s Mexican road race. The Grand Carrera Calibre 17RS, however, with its distinctive cutaway chrono dials, is no posturing relic. ■ £5,350

Maurice Lacroix Masterpiece Le Chronographe Squelette When you’ve constructed a mechanism as wonderfully elegant as that in the Masterpiece Le Chronographe Squelette, it seems a pity to hide it behind a dial. So Maurice Lacroix hasn’t, choosing instead to let the ML 106-7 calibre movement speak for itself. Naturally we approve. ■ £12,750 mauricelacroix. com





The MBII is the latest automatic mechanical watch from Bremont which has been tested and designed in conjunction with the iconic British  aviation company Martin-Baker. Bremont’s unique rubberised anti-vibration mount absorbs extreme shocks and the Faraday cage protects  the movement against magnetic forces. This is the only watch ever to have been subjected to a live ejection testing program.

3 Burlington Gardens, Mayfair, London, W1S 3EP Tel: 0800 011 2704 or buy online at



The Time Machine DISCUSSING WATCHES WITH Urwerk’s Felix Baumgartner and Martin Frei is a throwback to the 1960s. All that was missing when I met the pair at Marcus was a hookah filled with Moroccan and a soundtrack by Earth Opera. Their Swiss-German accents added to the ‘vibe’: it was like a reading of a Hermann Hesse novel. Watchmaker Baumgartner, born in Schaffhausen and in his father’s footsteps, and Frei, the industrial designer who creates Urwerk’s visuals, do not treat watchmaking as anything that passes for ‘conventional’. As Baumgartner puts it: “All of the functions and complications of the past have been perfected. We want to make the complications of today.” For those with even the weakest grasp of horological history, it’s a challenge akin to reinventing the wheel. For the two, the manufacturing of limited production timepieces is – as Hesse would surely recognise – an intellectual game. Their ‘satellite’ watches have been around for just over a decade; while not quite familiar, their method of showing the time no longer strikes enthusiasts as bizarre. Rotating discs connected to a centrallypivoting trio or quartet of arms line up their numbers with an arced scale along the bottom. The number on the disc is the hour; the pointer below it indicates the minutes, as shown on the arc. Simple, clever and almost intuitive, it is still a break from either easyto-read hands or plain digits. If one points out that too many new watches are almost impossible to decipher, Felix admits that, “you see a lot of the new brands, and sure enough, they are very tough to read. With the satellites, we started 12 years ago – we are no longer a start-up – the system is actually a very comfortable way of

“ For those with even

the weakest grasp of horological history, what Urwerk is attempting is a challenge akin to reinventing the wheel ” 40


reading the time. With only one glance, you know immediately what time it is. And,” he adds, “you don’t have to turn your wrist to look at the dial.” Frei explains Urwerk’s approach to the display philosophy in terms that reinforce the Hesse-like fascination with intellectual complexity. “When you show time in a different way, you experience time in a different way – like speaking different languages.” If you let him, Frei can also illustrate how different cultures, during different eras, wouldn’t even recognise our linear approach to the passage of our lives. Then, it’s back to earth. Frei does offer a less-metaphysical justification for Urwerk’s battle against convention. “By changing the way we display time, we can also change the shape of the case.” And Urwerk’s cases owe nothing to anyone else. With one accidental exception: the new UR-CC1 King Cobra. Baumgartner cites the speedometers in early Volvos and “an old Dodge in Alfred Hitchcock’s The Birds”” as inspiration, and Frei reveals that, “when I first made the design, back in 1998, I was thinking of cars – I didn’t even know this piece existed.” He points to an image of the Cobra, a Louis Cottier/Gilbert Albert co-designed prototype watch from 1958, now housed in the Patek Philippe Museum. Both Cottier and Gilbert Albert had impeccable track records for innovative watches, and their concept, with a horizontal, linear readout, looked just like the speedometer format popular in the USA. Now, through a series of mechanical developments unavailable to Cottier and Albert, Urwerk has produced a perfectly functioning concoction of gears, rollers, racks and cams that put a 1961 Cadillac dashboard on your wrist. You read the time of day exactly as any character from Mad Men would read his speed. And if you speak to Martin or Felix, you’ll know it makes perfectly good sense. H Urwerk UR-CC1 King Cobra will be produced in 25 examples. Prices begin at £194,000. Available from Marcus, 170 Bond Street, W1S;

travels back in time to the 1960s to visit the inspiration – and meet the men – behind Urwerk’s latest horological creation, the UR-CC1 King Cobra



Official Timing Partner of the Formula One Team Handcrafted in switzerland.


3 Burlington Gardens, Mayfair, London, W1S 3EP Tel: 0800 011 2704

The Rock

3-Timer dark brown dial

Unique clip-on instrument system

413 Oxford Street | London | W1C 2PF | T : +44 (0)2074093555

p46 . SECOND THAT EMOTION . Trading systems can give you discipline p47 . SING WHEN YOU’RE WINNING . Confessions of a US hedgie p48 . FOR THE PAINT-HEARTED . Investing in art


“Greenspan’s policies contributed heavily to the housing bubble, the subprime mortgage crisis, the general financial crisis, and the recession that followed” Johan van Overtveldt You Could Have Called It, Al (p44)


When Greenspan Sneezed the World Caught a Cold argues that Alan Greenspan’s ideological commitment to laissezfaire economics seriously undermined his role as a chief regulator in the hour of greatest need




Curriculum Vitae Alan Greenspan 1926 Born in Manhattan 1945 Attended New York University – summa cum laude and MA in economics 1948 Joins NYC think-tank The Conference Board 1955 Becomes chairman and president of consultants Townsend-Greenspan 1987 Appointed chairman of the Federal Reserve by Reagan 2006 Retires, handing over to Ben Bernanke 2006 Takes honorary position with UK’s HM Treasury

through a fog thick with uncertainties and unforeseeable events. In the words of Harvard economist Benjamin Friedman: The fears of deflation, with prices falling throughout the economy and monetary policy thereby rendered important, as it was during the depression of the 1930s and in Japan in the 1990s, were not realised in the United States. It is all too easy, therefore, to say in retrospect that the Federal Reserve’s actions – reducing

“ Those who criticise the

Greenspan Fed’s interest rates policy say that it allowed several bubbles to develop, with disturbing effects on growth, jobs, and investment ”

the overnight interest rate all the way to one percent (in 2003) and then raising it only gradually (by mid-2005, it was still only three percent) – were excessively expansionary. As of 2003 the recovery was hardly firm, and crippling deflation was a real possibility.

Of course, many people were criticising Greenspan and the Fed long before the housing bubble imploded and the financial crisis exploded. The second observation relates to the development of the housing bubble and the subprime mortgage crisis that in August 2007 ignited the global financial crisis of 2008. Apart from interest rate policy, the Fed had the means at its disposal to do something about subprimes. The Nobel Prize-winning Princeton economist and New York Times columnist Paul Krugman, one of Greenspan’s earliest critics, said: “[Greenspan’s] rate cuts helped make the bubble possible, but I’m not sure there was an alternative. What Greenspan did not do was listen to warnings about subprime. The Fed had substantial regulatory and moralising power. They could have done a lot to limit the excesses.” For Martin Eakes, chief executive of the Centre for Responsible Lending, a nonprofit group based in North Carolina, there is no doubt: “The Federal Reserve could have stopped this problem dead in its tracks. If the Fed had done its job, we would not have [the] foreclosure crisis [that we have] in virtually every community across America.” Desmond Lachman, a resident fellow at the American Enterprise institute, argued that Alan Greenspan “chose to forego the regulatory authority vested in the Fed over the US financial system.


WHAT THEN, IS the final judgment of Alan Greenspan and his tenure at the Fed? Considering the dual mandate of maximum employment and price stability, it is hard not to give Greenspan’s Fed a cum laude. Despite rising income equality, Greenspan’s almost 20 years at the helm of the Fed were, overall, a period of rising prosperity for the United States characterised by low unemployment and low inflation rates. Of course, the monetary policy of the Fed is open to criticism, and many found fault with it after the crisis in the financial markets began in the autumn of 2007. It has also been suggested that the Greenspan Fed overreacted to the October 1987 stock market crash. The Fed also probably reacted too late to the recession of the early 1990s, and it probably remained too expansive during the second half of the 1990s. Furthermore, and more importantly, Greenspan’s Fed took insufficient action, so the critics argue, to do away with the liquidity overhang that followed the new-millennium scare, and it kept its policy interest rates too low for too long in the years 2002-2005. These policies contributed heavily to the housing bubble, the subprime mortgage crisis, the general financial crisis, and, hence, the recession that followed. The argument of those who criticise the interest rates policy of the Greenspan Fed is that its policy allowed several bubbles to develop, with disturbing effects on the real economy of growth, jobs, and investment. For now, I will address two points about the track record of the Greenspan Fed. First, those who actively criticise Greenspan’s Fed with hindsight are taking the easy way out. Criticising after the fact is a lot easier than steering the policy wheel


“In particular, he chose not to exercise his authority,” he adds, “under the Home Ownership Equity Protection Act to rein in non-bank mortgage loan originators, which were mainly responsible for originating and distributing subprime mortgages.” Inside the Fed, the most explicit signals warning that the subprime situation was getting out of hand came from Edward Gramlich, a member of the Fed’s Board of Governors during the period 1997-2005 and the man responsible for all consumer protection issues. A book containing Gramlich’s explicit warnings on the subprime crisis was published just before his death in September 2007. As early as 2004, Gramlich warned in a speech to the Financial Services Roundtable Annual Housing Policy Meeting that “fraud, abuse, and predatory lending problems have been a troublesome characteristic of the subprime market... For mortgage lenders the real challenge is to figure out how far to go… Pushing homeownership so far that all the gains are offset by higher foreclosures does no good.” By the autumn of 2007, Fed vice chairman Donald Kohn recognised that although factors like “emotions of excessive optimism” and “the complexity and opacity of the newer instruments for transforming and describing risk” played a crucial role in the development of the housing bubble, “the low policy interest rates early in [the] decade” and “the fragmentation of regulatory oversight for the market” were also responsible. Krugman, Gramlich, and several other analysts and economists, pointing to the Fed’s refusal to use the regulatory arms at its disposal, make quite convincing arguments. First of all, the 1968 Truth in Lending Act and related legislation, such as the Home Mortgage Disclosure Act and the Home Ownership and Equity Protection Act, give the Fed considerable power to intervene in the mortgage markets, should it choose to. The 1999 Gramm-Leach-Bliley Act also significantly enlarged the Fed’s regulatory power. This act designated the Fed as the “umbrella supervisor” of financial holding companies, a concept that allows the terms of the act to be interpreted very broadly. Calls by Gramlich (and others) to use this regulatory power to correct what was clearly becoming an untenable situation in the subprime mortgage market fell on deaf ears.

Greenspan showed no sympathy at all for the call for regulatory intervention. His belief in free markets was unconditional, as his lack of attention for other excesses in the financial markets attests – specifically the stampede-like development of the totally over-leveraged shadow banking sector. In his memoir Greenspan comments only briefly on subprimes: “I was aware that the loosening of mortgage credit terms for

“ Greenspan himself

provided journalists with evidence that Gramlich’s criticism of his lack of regulatory zeal should be taken with more than a grain of salt ”

subprime borrowers increased financial risk, and that subsidised home ownership initiatives distort market outcomes. But I believed then, as now, that the benefits of broadened home ownership are worth the risk. Protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support.” Greenspan provided evidence that Gramlich’s criticism of his lack of regulatory zeal should be taken with more than a grain of salt. In spring 2008 he would often show journalists a letter that Gramlich sent him just a few days before the latter’s death in September 2007. It read, in part, “You were a magnificent central banker and a great leader. I truly wish the press would stop kicking you around on this subprime supervision issue. What happened was a small incident.” H ‘Bernanke’s Test: Ben Bernanke, Alan Greenspan, and the Drama of the Central Banker’ by Johan van Overtveldt is out now (£16, Agate Publishing)




Cruise Control

Trading can mean irrational decisions. So let a rules-based trading system help take the strain, says MIKE BAGHDADY IN ADDITION TO trying to make correct trading decisions, new issues have arisen that we must attend to such as anonymity to protect our orders from negative selection and executing our orders with the least possible market impact. We also have to seek liquidity and have an algorithm to help us find that liquidity; and when we do find it, we must then have a quality execution. We need a complete understanding of the rules behind our trading systems; we must understand why they are giving us specific signals at all times, and the reasoning behind them. After all, what good is pulling an exceptional profit from a trade if you don’t understand the series of events that occurred to make it happen, or the ability to repeat the action consistently? While quantitative analysts and programmers begin with certain assumptions that they believe should work, when they are tested in real life they are quickly felled by variables that the analysts couldn’t have accounted for or anticipated. A good trader must be able to adjust their strategy to account for these variations and not only believe that the changes they have made to their strategy will stand up against a sudden change in volatility, they must also have the confidence to execute each trade with a high degree of certainty that they are more likely to win than lose. Practically everyone makes poor assessments of risk and event probabilities under duress, but fortunately in trading,

“ What good is pulling

an exceptional profit from a trade if you don’t understand the series of events that occurred to make it happen, or how to repeat it consistently? ” 46


human emotion represents a tremendous source of opportunity for us to profit from. The best trading systems can show you a map of human behaviour by identifying price points on their charts, flagging where traders have realised they have made errors in their judgment and are desperately seeking to act on those realisations and correct them, to limit their losses. Within all of these price points are opportunities that winning traders know how to profit from because they understand how the errors other traders have made manifest themselves in price action. They are making money by exploiting the consistently irrational behaviour patterns of other traders acting on base senses of hope, fear and greed. That is why understanding price behaviour works, and continues to work, because it is based on the market movements that result from this systematic and repeated irrationality that is embedded in every trader in the market. Strategies based on price behaviour allow a trader to identify points where other traders need to enter or exit trades and to have a good mechanical system that automates the entire process of trading. Such a system should provide answers to each of the decisions a trader has to make, and because there is a set of rules that defines what should be done in any circumstance, decisions are not left to the judgment of the traders themselves, but to their systems – reducing the risk of emotion interfering in an execution. A profitable trading system that adheres to the rules and principles of price behaviour contains five basics elements: optimum entry; optimum exit; risk control; automatic execution; and portfolio selection. It becomes far easier for a trader to be consistent in his trading if he sticks to a system he can rely on. If he understands the rules of his system, he can identify whether the market conditions are optimal under his strategy or whether they have changed sufficiently to keep him out of it.

When new variables come into the market such as volatility owing to a news event, or the unwinding of large positions to identify money-making opportunities, his system should tell him that the risks are too high under these conditions, and that either he shouldn’t trade or should dramatically cut his size. When the dust settles, he should similarly be able to identify the shortterm market directions based on reference points in the charts that, if executed with precision, can lead to far bigger winning trades; or in other instances, tell him to be patient and allow his trades sufficient time to develop into bigger wins. Knowing the rules behind automated systems and strategies and having the knowledge and confidence that they work most of the time makes it easier for the trader to recognise all the signals, and thereby trade according to the system, even during times of trading losses. It allows the trader to be consistent despite the inner emotional struggles that they must overcome after a confidence-shaking series of losses, or unrealistically large profits. Successful trading, whether by an individual at home or within a large-scale hedge fund, is like flying a plane: you can largely travel on auto pilot but in the unforeseen event of turbulence, you can immediately take manual control and bring your position back to safety. H Mike Baghdady is head trader at Spyglass;


Swimming with Sharks

When WAYNE WEDDINGTON III became a senior trader at a large fund, he felt pretty, pretty good. Then he caught sight of a colleague’s trading stats on his flatscreen… I AM HARDLY an insider. The fortunes of my fund, a long/short equity fund, have hovered in the lower end of the industry assets, with peak assets of about $200m. In relation to the rest of the industry, this makes me a pauper. I cannot really be considered a ‘player’ at that size. I am the Brad Gilbert of hedge funds. I have mostly been an independent manager, but I have also had long assignments inside other hedge funds, some of them quite large and ‘best of breed’. During my most recent experience in a large hedge fund, one of the things I noticed first was the lack of activity on the trading floor. It was one of the largest hedge funds in the world. The offices were spacious and comfortable – and really, really quiet. It was nothing like the trading floor caricatures you see in the movies. You could almost hear a pin drop on the trading floor. One reason is that there were a lot of empty seats. At any moment, 24 hours a day, the firm was actively throwing $40-$80bn (including leverage) around the markets globally, but you would hardly know it. The business has changed rapidly, facilitated by technology advances in telecom, data streams, and automation for high-velocity trade execution. Technology not only made it unnecessary to talk to each other, it also made it unnecessary to even show up. Everyone silently used Instant Messenger to make trades. Further, why sit in an office chair where the air-conditioning is too cold or uncomfortable when one could be sunning on the beaches of Bridgehampton or Miami, checking the market and making trades from specially fitted BlackBerries? There is a pecking order among hedge managers that derives directly from the maxim ‘size matters’. I got my first lesson in the pecking order in a humble

epiphany that made me think, “Gee, I wish I were bigger”. One day I needed the help of one of the IT guys who was working at the trading station of one of the senior traders. I was also a senior trader, but I learned that there is senior and there is SENIOR. The other senior trader was not more experienced or more capable than I was (I say this with all modesty), but he was running a lot more money than I was, about $3bn. Bored of standing, I sat down at the senior trader’s workstation. Innocently, I looked over at his day’s profit and loss statement (p&l). I admit I was curious because I had, in fact, done well that day, and I wanted to see how I stacked

“ On this slow summer

day his earnings were $4.8m. For just one day! And for performing only 80 basis points! Imagine being in a job where your daily variation is $5m… ”

up. My book was up around about 30 basis points, or 0.30 percent for the day, which is not bad for a day’s work. I made $300,000 for the firm. Yeah! In fact, I was proud of it – that was a pretty good day in the statistical arbitrage world. The senior trader was running a different strategy, a long-biased portfolio (mostly long positions, some short). I glanced sidelong at the performance stats on his flatscreen. I nearly cursed out loud; he was up more than I was, about 80 basis points. What astonished me next was not the magnitude of his earnings in percentage terms, but in absolute dollar terms both for himself and for the firm. He had made $24m for the firm that day, a slow day, a summer Friday. Jeez! But even more striking was his personal take of the profits. Right on the screen he tabulated (as he apparently did each day) his personal take in the profits. On this slow summer day his earnings were $4.8m. For just one day! And for performing only 80 basis points! Imagine being in a job where the daily variation in your personal account is $5m. If he made just ten per cent for the firm by the end of the year, his bonus would be $60m... every year. And he was just one of many traders at the firm. That is why everybody wants to be in the hedge fund industry. To make matters worse, the senior trader was a really nice guy. You would never have known that this was the scale of his daily remunerations. Sometimes, no doubt, he probably lost $5m personally, but I still doubt that the daily variation had a serious impact on his lunch money. He was one of the most humble, patient, nicest guys around. Yet after that day, for some reason, I did not like him very much anymore. H ‘Do-It-Yourself Hedge Funds’ by Wayne Weddington III is out now. (Grand Central Publishing, £17.99)





Painting a Brighter Picture for Art Sales After a year that saw blood on the carpet in the art world, The Helium Foundation’s JENNIFER MCCORMICK sees signs for optimism as private sales return to healthy levels



turned to the private advisors and dealers to broker deals. Additionally, buying at auction means that you will definitely have paid top price, with others in the room driving prices up (and a hefty commission to boot), buying from a dealer means there is room for negotiation. Everyone loves to barter. There is a serious shift in how people are investing, with the relationship with their dealer now being key. The weekend FT (19 September), as well as an earlier article

“ Many are unwilling to

be seen selling art works for fear of being perceived as offloading assets. And many that did well last year, did not want to be open about spending ”

‘Bankers Bone Up on Banksy’, discussed exactly that, and not only in terms of individual collectors. Banking institutions such as Société Générale are teaming up with art advisors to ensure they are making the right choices for long-term rewards. Just as with money markets, there are great opportunities to be had when prices fall. So it can be the ideal time to buy into an artist who has a sound past and a steady future. Often the reason the piece is available has little to do with the career of the artist, and everything to do with the owner’s liquidity. With the traditionally lazy summer coming to an end, canny collectors are bound to seize on these opportunities. October is synonymous with frenzied art buying as the world descends on Regent’s Park for the annual Frieze art fair. The recent auction figures achieved by many contemporary artists including Bridget Riley and Damien Hirst, indicate this year is bringing a calmer, more level-headed buyer who wants much more than just to jump on a bandwagon. If you were buying property or taking a chance on the stock market you would undoubtedly consult a specialist to maximise your chances of the best return possible. The art world has consistently given exceptional returns throughout the decades – but if you don’t absolutely know what you are doing then make sure you get the best advice you can. H Jennifer McCormick is the owner of The Helium Foundation and has 15 years experience in the art world with a wealth of knowledge on contemporary artists. She specialises in helping clients make the right choices and not to repeat the mistakes that have cost others dearly when investing in art. 020 7404 7667;;

PICTURE: DAMIEN HIRST: The Souls On Jacob’s Ladder Take Their Flight 5, 2007;

AFTER ALMOST TWO years of negative press, doom stories of people losing their shirts in the City and predictions that the world will implode, there is a strong feeling that recovery is well set in. Many expected the art world to encounter the same sharp decline and steered clear for some time, observing from the sidelines. Yet it seems faith has been restored and that it’s safe to enter the water again. Of course, it hasn’t been without its casualties, just like any other sector of the economy. Many of the young up-and-coming artists and galleries, who have been riding on the coattails of the success of artists such as Banksy, have bitten the dust. Collectors now want the confidence of knowing that any investment made has a sure record behind it. They are much less willing to take a risky bite into a pie that offers less well-known names, with an even less predictable future. Historically, the auction houses have been the place to look for some idea of how the art world is competing in the investment market. Of late, this indicator has made it look both astounding and bleak within quite a short period of time. The earlier booms had been replaced with collectors having to swallow prices well below what they would have accepted a year previous, when selling through the only avenue many knew. However, what hasn’t been recorded are the number of successful sales through private dealers. Recently, many people have been unwilling to be publicly seen selling art works, for fear of being perceived as offloading assets. On the other side of the coin, many in the financial world that did exceedingly well last year, did not want to be open about spending. As a result, they’ve

129 Fulham www.thewat

3 Bu 33

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Jura Watches Jura Jura Watches Watches Jura Watches Jura Watches 3 Burlington Mayfair, London, W1S 3EP W1S 3EP Burlington Gardens, Gardens, 3Gardens, Burlington Mayfair, Mayfair, Gardens, London, London, W1S Mayfair, W1S 3EP 3EP London, 33urlington Burlington Gardens, Mayfair, London, W1S 3EP Tel: 0800 011 2704 Tel:Tel: Tel: 0800 0800 011 011 2704 2704 Tel: 0800 011 2704 0800 011 2704


Straight from the Art of the Helium Foundation selects some of her favourite contemporary work – including the best of British talent, proving that the UK has an explosion of energy to rival the 1960s New York Pop Art movement...


Faile Happens Everyday, 2007 Acrylic & silk screen on paper Varied edition of 12 63.5 x 96.5 cm




Banksy Kate Moss, 2005 Screen print Available in a set of six matching prints Edition of 20 70 x 70 cm




Damien Hirst Flumequine, 2007 Signed etching on 350 gsm Hahnemuhle etching paper; 108 different colours on each of the different spots Edition of 75 54.25 x 43.5cm




Nick Walker White Panties Grey, 2006 Stencil and spray paint on canvas Signed original work Edition of three 90 x 90cm





Bruce Denny Enchantment Bronze sculpture Edition of six 40cm x 50cm x 30cm Suffolk-raised Bruce Denny, 42, had a fledgling career in the City before he retrained as a sculptor. Having studied biology and chemistry at university, Denny has a natural appreciation of the molecular make-up of living things. This can be seen in his beautiful evocations of the human form, seen here in his work Enchantment (ÂŁ6,500). His work is on offer at the Albemarle Gallery.







p64 . wild ThingS . On safari with Kenya’s tribesmen p71 . rib TicKling . we’ve found the best steak in town p72 . french dreSSing . Parisian dining at 114 faubourg p75 . graPe exPecTaTiOnS . Making malbec magical


“Choosing somewhere to stay in Hong Kong comes down to one thing: reputation. Oh, and waterfront. Why go there and deny yourself the harbour view?” Sam Taylor Hotel hunting in Hong Kong. p58


China – In Your Hands

Hong Kong is one of the world’s most vibrant, exciting cities – and the Mandarin Oriental is still the daddy, says sam taylor Additional reviews by’s fiona duncan

“ Superstitious punters

think nothing of spending upwards of HKD$1m (almost $200,000) for a fish who apparently gives them the ‘magic’ eye ” 58

or Hermès. And the rules are strict for the tai tais, or ladies who lunch – no accessory can be used for more than one season. Which is why the ten Milan Station consignment shops ( now do a roaring trade in recycling their (barely used) designer castoffs at less than a quarter of the original price. Choosing somewhere to stay in Hong Kong comes down to one thing: reputation. Oh, and waterfront. Why go there and deny yourself the harbour view? From the first junk leaving at dawn to the laser shows that start at sunset, this deep, watery haven more than pays homage to its corner of the South China Sea. The Mandarin Oriental sank its foundations here in the 1960s and has sat in pole position on the front ever since. It’s certainly not the cheapest in town but with a level of service to match its ▶

W HONG KONG Straining a little too hard, perhaps, to be cool, W Hong Kong nevertheless (and especially for a global brand hotel) hits all the right notes. Set high in the Cullinan building above the classy Elements shopping mall and Kowloon MTR, its spacious rooms, with floor-toceiling windows and great bathrooms, vary in price according to the panorama (Kowloon view or Harbour view). Breakfast in the atmospheric Kitchen makes a great start to the day, and here W’s signature Wet (pool), Sweat (gym) and Bliss (spa) are all crackers, the first being a fabulous 76th-floor rooftop infinity pool and Jacuzzi from where you dangle in the sky, surveying the city. ■ Price: Doubles from £195 ■ LOCATION: Kowloon ■ T: 00 852 3717 2222 ■ W:


For First timers or even those who have flown around the block a couple of times, the early evening approach to the dense, dazzling Hong Kong skyline, clinging precariously as it does to the edge of barely visible mountain, is a uniquely breathtaking experience. Small and perfectly formed, the whole place contrives to look and feel like a movie set; albeit one with a thousand different setups. Surprisingly home to the third largest film industry in the world, Hong Kong has become a master in the art of giving the public what they want. A whole street dedicated to selling goldfish? Weird, yes, but for the bettingcrazy Hong Kongers it makes perfect sense. For a people who bet over $10bn a year, where else to park their lucky koi carp sellers than alongside the off-course betting shop on Tung Choi street? These superstitious punters think nothing of spending upwards of HKD$1m (almost $200,000) for a fish who – apparently – gives them the ‘magic’ eye? A wife with a serious shopping habit? No problem. Paris may be the birthplace of couture, but Hong Kong is certainly the mother ship. Whole blocks cover the Central area with nothing to buy except micro outfits from Chanel, Gucci, Armani

HedGe Hubs HONg KONg

Four seasons Four Seasons’ Hong Kong flagship swiftly gained a reputation for top-notch service and facilities after its opening in 2005. The smallest of its 399 rooms and suites is an airy 45 square metres; the best overlook the harbour; and all are decorated in sleek Western style with Eastern touches. The spa is first-class, and infinity and lane pools grace the spectacular rooftop deck. Two of five restaurants are multi-Michelin-starred (Caprice and Lung King Heen), and the Lounge, off the dramatic marble foyer, features a pianist every afternoon and jazz in the evening. ■ Price: Doubles from HK$4,200 ■ CONTACT Central ■ T: (00 852 3196 8888 ■ W:




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HedGe Hubs HONg KONg


upper House

The Peninsula If the Mandarin Oriental is a hub, the meeting place of choice for businessmen and well-heeled Hong Kong residents alike, the equally famous Peninsula offers something quite different and very rare in today’s modern, sky-high, tumultuous city: an oasis of early 20th-century tradition and glamour, still intact. No other hotel can beat the views from the rooms and enormous

▶ stablemate, the Oriental in Bangkok, it is impossible to beat. Yes, it’s a favourite with US presidents, and yes, it has wooed Kate Moss, Kevin Costner and the Sultan of Brunei, but its real appeal is, at risk of repeating myself, the view. As I am sure they would all agree; it is simply priceless. With floor-to-ceiling glass windows in the rooms and suites, guests have arrived and done virtually nothing but sit and stare out of the windows. With Man Wah, the island’s leading Cantonese restaurant on the 25th floor and the Terence Conrandesigned Mandarin grill on the ground floor, it is unlikely they would starve. And with the top-floor M bar open to residents and non-residents, they could even risk meeting some locals without ever losing sight of, yep, the view.

suites facing Victoria Harbour. Afternoon tea attracts queues in the famous lobby, the marble-pillared pool and terrace make a perfect retreat from the madding crowd, and a Rolls-Royce Phantom whisks you to and from the airport. ■ Price: Doubles from £275 ■ LOCATION: Kowloon; ■ T: 00 852 2920 2888 ■ W:

In fact, virtually the only place at the Mandarin Oriental that doesn’t promote the view is the newly opened 2,500sq ft spa, where you are not just pummelled (standard stuff for most luxury hotels these days), but are actually given the once-over by professionals trained in traditional Chinese medicine. It is quite remarkable what someone can tell by looking at your spine and your tongue – and even more remarkable what they can then do to a creaky back in only 60 minutes. But even those staying at the MO occasionally feel compelled to get out there a bit, if only to try their luck with the thousands of restaurants. Eating is central to the Hong Kong experience and dim sum is everywhere, of course. The old-style places are still run on the principle that

Just opened, quite different and superbly designed. You enter, on Pacific Place, through a wall that looks like a curtain being pulled back. You ascend via an escalator that passes through a ‘tunnel’ of wood and slatted light. The feeling is one of almost Zen-like calm, except in the buzzing restaurant, and bar, enhanced by shapely artworks and the use of pale wood throughout. The bedrooms feel spacious, the bathrooms enormous and exceptional, each with a dressing area and sandstone ‘cocoon’ sculptures that are astonishingly smooth to the touch. Touch and feel are everything here, senses to the fore. André Fu, the young designer, has succeeded admirably in re-interpreting the concept of new luxury and creating a haven of calm and quiet good taste. ■ Price: Doubles from £210 ■ LOCATION: Admiralty ■ T: 00 852 2918 1838; ■ W:

the trolley paces up and down, you point, they hand it over, and somewhere along the line a bill arrives for not too much. It’s a lottery, and mildly stressful too, if all you really want is a relaxing experience washed down with some world-class dumplings. The current favourite for this crown is Ye Shanghai, 88 Queensway, Pacific Place. ▶

“ The old-style dim sum

places are still run on the principle that the trolley comes, you point, they hand it over, and a bill arrives for not too much ” 61

HedGe Hubs HONg KONg


Mandarin Oriental When the Mandarin Oriental closed in 2006 for a total renovation (taken back to the girders from the first floor up) the Hong Kong stock exchange held a two-minute silence. Once reopened, brokers and businessmen flooded back to the Captain’s Bar on the classic 1960s ground floor, their wives once more paraded their latest fashion buys in the Clipper Lounge and hotel guests found the Mandarin’s legendary service unchanged but its new, panelled bedrooms (“like being inside a luxury cigar box”) hugely improved. Wonderful restaurants, including a hidden gem of a chef’s table deep in the kitchens, plus world famous barber’s shop, cake maker and rose petal jam: just some of the touches that single out this superb hotel. ■ Price: Doubles from £268 ■ LOCATION: Central ■ T: 00 852 2820 4202 ■ W:

▶ The portions are designed for sharing, there is a menu (hurrah), and the ambience is laid-back, 1930s cool. Some people come to Hong Kong in search of what they think of as ‘the real thing’. This can range from eating unidentifiable blobs kept in buckets served almost live in tiny eateries with two tables and a man with no teeth as the only other diner, to going home with a fake Louis Vuitton suitcase stuffed full of trinkets. Both are worth trying, at least once. The former will usually help with any weight loss issues and the latter will cost you a crippling amount in excess baggage.

“ The locals use the ferry

all the time, though most seem to be deep in their FTs rather than on the lookout for a nice middleaged American actor ” 62

Langham Place When it opened in earthy, intensely Chinese, densely-packed Mongkok, eyebrows were raised, but its arrival, as part of the landmark Langham Place mall, has proved a great hit with both corporate and leisure guests. The colourful surrounding streets are packed with well-known markets, such as the Night Market and Ladies Market (free tours from the hotel each evening). And the hotel itself has a great atmosphere, as well as style, including an important collection of Chinese art. Opt for a Club Room for spoiling extras in the executive lounge, and don’t miss the Chuan spa, one of the best in town, or the fabulous rooftop pool. ■ Price: Doubles from £157 ■ LOCATION: Mongkok ■ T: 00 852 3552 3388 ■ W:

Still, both can be combined at the Temple Street night market on Kansau Street and Jordan road over on Kowloon. Although the HK authorities are trying to crack down on fakes, this tight stretch is covered in hundreds of very passable copies of designer watches and stalls selling murky bowls of shark-fin soup topped up with a portion of chicken feet. You can also get your fortune read by a face reader – and if you don’t like what he predicts for you, you can always try his avian colleague, the fortune-telling canary. Fans of the 1960s film The World Of Suzi Wong will know that it was on the Star Ferry back from Kowloon that William Holden first meets the eponymous heroine. Chugging back and forth since 1898, the ferry is still the cheapest and most regular way to commute from one side of the Victoria harbour to the other. The locals use it all the time, although most of them seem to be deep in their FTs these days rather than on the lookout for a nice, middle-aged American actor to save them from a world of bar-girl poverty.

At night the ferry takes people over for cocktails at the Philippe Starck-designed Felix bar on the top floor of the Peninsula Hotel ( The bar boasts a panoramic view back over the river, as well as a strange Perspex cube on the dance floor known as the ‘Crazy Box’. It’s possible this is where people end up after they have received their bill. Or in some cases after they’ve spent a penny – Starck’s gift to the male drinkers of Hong Kong was to suspend the clear-glass urinals directly over a sheer 28-storey drop. As one startled customer commented to me: “I know Batman leapt 88 storeys from the island’s tallest skyscraper – but at least he had his pants on.” H Mandarin Oriental, Hong Kong, double rooms, from £268 per night on a b&b basis;; 00 800 2828 3838; Air New Zealand, London Heathrow to Hong Kong direct; economy from £545, premium economy from £1,023, including taxes;; 0800 028 4149; additional hotel reviews courtesy of The Hotel Guru; for more reviews, or to book, visit the

May your days be merry and bright, and may all your Christmases be white Come in from the cold to celebrate at the Jumeirah Carlton Tower

Leave the cooking to us this Festive Season and head to the award-winning Rib Room Restaurant, where Executive Head Chef, Simon Young has created a tantalising Christmas lunch and a remarkable New Years Eve dinner for the whole family to enjoy. Time to get the crackers out! And if you are looking for a festive stay with all the trimmings, stay ‘Totally Christmas’ at Jumeirah Carlton Tower from only £263 per room per night. To book, please call +44 (0) 20 7235 1234 or email quoting ‘Hedge Magazine’ Subject to availability and conditions apply. Jumeirah Carlton Tower, On Cadogan Place, London SW1X 9PY.


Plain to See in the Cradle of Mankind A new initiative allows would-be safari-goers to learn bush craft from the tribespeople of the Great Rift Valley and Masai Mara. Lou cooper experiences shock and awe in Kenya Living and working in the sprawling metropolis that is London, the nearest most of us get to seeing wildlife up close is taking our children or godchildren to look at cramped, listless, clinically depressed specimens holed up in the Victorian menagerie that is the Regent’s Park zoo. And even then it turns out the elephants downsized years ago, swapping their swanky but overcrowded central London pad for a mansion and acres of space in the Home Counties. So a Kenyan safari should delight your inner David Attenborough and put a few of those survival skills garnered from Planet Earth to practical use at last. The Samburu region is located in the Rift Valley province of Northern Kenya. One of Africa’s last true wilderness areas, it is home to the semi-nomadic Samburu tribe, closely related to the Masai and easily identified by their red shukas and colourful, beaded jewellery. Strongly connected to their traditions and culture, many still live the simple life in lightly built settlements that are removed periodically and transported to other areas, following the cycle of wet and dry seasons. I am here as a guest of Saruni Samburu, a lodge located on the Kalama Wildlife Conservancy, about 7km from the Samburu National Reserve, to take part in their

“ The nearest most of us

get to seeing wildlife up close is taking our children to look at cramped, listless, clinically depressed specimens holed up in the Regent’s Park zoo ” 64

Walking With Warriors programme, ideal for the would-be student of red-in-toothand-claw nature. The inventive enterprise cuts to the heart of what fascinates us about safaris and delivers it in spades, allowing unfettered access to the most famous wildlife habitat in Africa – all within a luxurious, tailor-made, environmentallyfriendly setting, of course – experienced through the eyes of the most well known and culturally intact tribal cultures; the Samburu and the Masai. The Walking With Warriors programme aims to encourage dialogue between the tribes and a new breed of safari-goer. Rather than simply jumping into a hot-air balloon to gawp at a brief selection of carnivorous mammals, before heading back to a five-star hotel in Nairobi, would-be adventurers now have the chance to engage more authentically with these ancient, proud tribes of warriors. Learning the wonders of bush craft and surviving in the birthplace of mankind, it is an exchange of information that allows us to explore meaningfully a truly exceptional way of life. The design lodge we are staying in, perched on top of the Kalama mountains, is closer in terms of style and luxury to a penthouse – to describe the accommodation as basic would be a little like describing The Ritz as a b&b. All minimalist luxury and low-impact design, giant lanterns fringe the open-fronted bedroom, replete with majestic canopy bed, which boasts a 360° view of the surrounding plains, a view that does justice for once to the adjective ‘sublime’. The panoramic vista, vast, dramatic, truly wild and frighteningly desolate, extends for miles – on a good day you can see all the way to snow-covered Mount Kenya – and I feel like a god on top of my mountain, gazing down on the wondrous earth below.

Hedge Hideaways kenyan Safari

jump to it: (clockwise, from main pic) masai warriors taking part in a traditional dance teaching cultural awareness during the walking with warriors programme; watching zebras on a game drive in Samburu in specially modified jeeps for enhanced viewing; the view from the family cottage at Saruni Samburu at dusk

My safari experience – enjoyed from the comfort of a customised, fully opentop Land Rover – began at 6am, with an early-morning game drive. My guide, Chris Lmariamu Letur, a lean, lithe Samburu warrior with a cheery, floral headdress and an immovable smile, looks considerably younger than his thirtysomething years, thanks to a simple lifestyle and smog-free air. Accompanied by a strong, muscular tracker, Lepayon Lekoitip, who never went to school but can spot one of the ‘big five’ (lion, leopard, rhino, elephant and buffalo) a mile away, we descended from our mountain perch and onto the dusty, arid plains, just as the post-dawn light began spreading and the sounds of the wildlife started filling the air.

That first morning, I saw a pride of lions stalk their Grevy’s zebra prey. As we watched in morbid fascination, binoculars glued to our expectant faces, the practised pride split up, inching forward on empty belly with purposeful paw, concealing the approach in the assortment of shallow gullies, patchy grass and sparse undergrowth that stood between it and lunch. Progress was slow. The smallest slip and the game is up. After 20 minutes, still cheerfully oblivious to its impending doom, the black-and-white slap-up sniffed the air before trotting off; blissfully unaware of how close it had come to danger. Others were not so lucky. Later in the day we saw a satisfied leopard drag the bloody carcass of an impala into a tree, away from the hyenas who were looking to share it. Further on, and a decaying gerenuk (a type of gazelle) skull greets us, lying by the side of the road as scavenging, keenbeaked vultures systematically pick it clean. In an attempt to calm our racing, hitherto mollycoddled hearts, we ate our lunch by the river and were soon warmed by the infinitely more tranquil sight of an elephant mother and baby, digging holes in the riverbed with their long, languorous trunks, to search for water. As our eyes adjusted to the myriad shades of beige, we uncovered darting, fawn-coloured dik diks (small antelopes) who mate for life, precariously swinging bat’s nests that hung like so many Christmas baubles from the canopies of the stately acacia trees – and suddenly, out of nowhere, a family of lolloping, unhurried reticulated giraffe glided into view, the males sparring now and again in a comical clashing of bendy necks and stunted horns that looked more like flirting than fighting. The day ended with a gin and tonic at sundown, perched high on a hill, a profoundly awesome spectacle, rendering every one of us speechless. In our own contemplative worlds, we watched the joyful ochre that splashed the sky, as it melted into brooding burgundy before plunging into deep crimson, until the sun disappeared altogether. We suddenly felt woefully exposed – at once grateful for the steadfast warriors, standing vigilantly around us. On the second day we visited a Samburu village. The colourfully dressed native women stood in line as we pulled up, ▶


Hedge Hideaways kenyan Safari


▶ singing in welcome as dozens of barefoot children in an assortment of hand-medowns rushed to greet us; smiles all round, despite the basic conditions. Dim, cramped, smoke-filled huts housed silent, crouching families, forming a ring around the central camp, used for meetings and to accommodate the animals – the source of the Samburu livelihood – at night. Pungent dung covered the ground, the cracked earth and filthy clothes a testament to the lack of water. The reality of third-world living hit us like a punch in the face. From Samburu we headed southwest, our Cessna Caravan soaring off the dirt airstrip for a bumpy ride to Samburu’s sister lodge, Saruni Masai Mara, the scenery unfolding below us, one breathtaking vista at a time. In stark contrast to the dusty beige of Samburu, the Masai Mara was a burst of fresh air, verdant and fertile, with long, patterned necks, black and white stripes, bushy feathers and curling horns bobbing into view at every turn. The lodge here is peppered with personal touches; organic soaps and Persian carpets, assorted art and colonial furnishings, lovingly collected by the owner on his frequent foreign travels. Canvasfronted bedrooms (secured nightly for sleeping, of course) make you feel like you’re camping – albeit in unadulterated comfort – and a massage in the Wellbeing Space completes the feeling of being totally at one with nature. Five towering, statuesque Masai warriors in full tribal regalia came to collect us from camp to take us on one of their signature walks, a chance to educate tourists not only about the diverse, remarkable wildlife but how the Masai nurture and protect it. Intensely knowledgeable and bashfully proud, the youngest were eager to show us

“ Tentatively picking their way among the rocks, a few brave frontrunners broke away, failing to see the basking camouflaged crocodiles, vigilantly watching every move ” 66

Stripe it lucky: it’s the black-and-white mammal show again, this time in the masai mara

what they were capable of, throwing panga and spears that never missed their mark as we wandered the plains, thrillingly on foot for the first time. Conscientiously practising with bows and arrows and tending (or trying to tend) cattle from a nearby village, there was something infinitely refreshing about using our instincts in place of the studied knowledge of the City grind. Slowly, under diligent guidance, we learned to recognise which plants could be used as insect repellent, which to flavour soup, the peacekeeping tree, the leaves of which were waved like a white flag in times of unrest, and those that cured depression. No animal, from the heftiest hippo to even the tiniest termite was left unexplored, and we enjoyed every instructive minute of it. In our last remaining days, the wildebeest began building for the migration, 600,000 charged bodies, impatient to begin one of the most incredible journeys on earth. We watched, mesmerised, as a bold group attempted a river crossing. Tentatively picking their way among the rocks, a few brave frontrunners

broke away, failing to see the basking camouflaged crocodiles, vigilantly observing their every move, eagerly awaiting the right time to pounce. The tension was palpable, everything moving in slow motion, until jagged teeth connected with flesh and bone in a crazed flurry of movement. A cacophony of noise called for retreat as the frontrunners backed up and the herd surged forward to protect its own. This time they are lucky and the last wildebeest escapes, the stocky reptiles retreating into their watery world, happy in the knowledge that many more must make this crossing, on their way to greener pastures. H Walking With Warriors In Kenya costs from £2,880 per person for seven days (six nights). Price includes three nights’ accommodation at Saruni Samburu and three nights at Saruni Masai Mara (both full-board); one child under 16 can join in the experience for free. Price excludes international airfares. For bookings and information contact African & Indian Explorations 01993 822 443, or visit Flights from London Heathrow to Nairobi with Kenya Airways start at £490 return, all taxes included;

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restaurants the rib room & oySter bAr


Make Room for a Good Ribbing Dining at The Rib Room & Oyster Bar at London’s Jumeirah Carlton Tower is a lavish affair. Martin deeson plumped for the rib roast – and declared it as good as any he’s tasted Until yesterday the best piece of beef I’d ever eaten in my life was a steak the size of my head and as tender as a cloud with which I had the pleasure of joining battle in Buenos Aires, Argentina – the home of beef. Now, if anyone ever asks me, “What’s the best piece of beef you’ve ever eaten,” I will have to answer that there is a joint-first equal out there… but maybe I’m getting ahead of myself. The Jumeirah Carlton Tower hotel in Knightsbridge, close enough to Harvey Nicks to walk to even when laden with shopping, and with rooms overlooking Cadogan Square, has always been a favourite with visiting business travellers. In fact, those discerning readers of Conde Nast

“ To call beef ‘melt-in-

the-mouth’ is a cliché, but a cut as thick as a phone book dissolved as though it had been massaged by angels in kid gloves ”

Traveller voted it the ‘Best UK Business Hotel’ at their awards in 2008. The hotel’s Rib Room, too, has long been a London institution. Opened in 1961, and massively refurbed in 1999, first impressions are of a particularly luxurious dining room on an Edwardian cruise ship. The service is famously attentive, without being overbearing, and on this first visit we were greeted like old returning friends, quickly whisked to a table that managed both to overlook most of the room while being far enough from other tables to be ideal for sensitive business conversations – or even the imparting of salacious industry gossip. Perfect for business lunches (or their renowned business breakfasts) the room would also be an impressive setting for significant family occasions or a dinner to celebrate some especially lucrative trade. For even more privacy there is a private dining room, The Boardroom, which, as the name suggests, has hosted more than its fair share of hedge-fund celebrations. Some of the dishes for which chef de cuisine Donato Russo has become famous include twice-baked Stilton soufflé; salad of pears and watercress; baked halibut with mussel chowder and sautéed spinach; and lychee and passion fruit bavarois with exotic fruit salsa and coconut ice cream. Of course, given the restaurant’s name, the menu is heavily meat-oriented, but there is also a good counter-balance in the form of seafood. My starter of caramelised scallops with belly of pork was faultless, an exquisite dish well-executed – the scallops done to just the right side of seared perfection and the pork belly a deliciously fatty and crispy counterpoint to the clean, lean taste of the shellfish. My weight-conscious dining

looking pretty boeuf: Chef Donato russo cooks up a storm – though it would be rude to visit without sampling the signature dish, roast rib of Aberdeen Angus from the Scottish estate of the Duke of buccleuch served with yorkshire pudding

companion had a Rib Room Caesar salad to start, which was good enough to satisfy any visiting Manhattanite. But to the main event: it would have been churlish to visit the Rib Room without sampling the restaurant’s signature dish – roast rib of Aberdeen Angus from the Scottish estate of the Duke of Buccleuch served with Yorkshire pudding. And this is where the ‘best beef in the world’ accolade came into play. At £55 for the larger portion – not greedy, just thorough, you understand – the dish will not be for everyone, but it was worth every penny. To describe beef as ‘melt-in-the-mouth’ is a cliché, and almost always untrue but, just as in Buenos Aires, I found that this can, occasionally (in my case, twice in a lifetime) be true – a cut as thick as a phone directory dissolved as though it had been massaged by angels in kid gloves. With a superb wine list – we had an excellent premier cru chablis, then followed a superbly velvety Haut-Médoc – the Rib Room is the stuff of dreams. Whether for work, rest or play you’d be hard pushed to find a better British restaurant in London – or indeed the whole country. H From £60ph with wine; The Rib Room & Oyster Bar at the Jumeirah Carlton Tower, Cadogan Place, SW1; 020 7235 1234;


restaurants 114 fAubourg, pAriS


Dining – with a Little French Polish Under the great Eric Frechon’s nose at the Hotel Bristol, 114 Faubourg next door is a worthy sibling. By Margaret keMp there’s a three-week wait for a table at The Bristol, Paris, since super-chef Eric Frechon won his third Michelin star in the 2009 Guide, and was then crowned ‘Chef of the Year’ by 6,000 French chefs, organised by Le Chef (the catering trade’s Vogue). The trophy was awarded at a glittering bash in the Pavillon d’Armenonville, on the edge of the Bois de Boulogne. Giving Frechon a kiss on both cheeks (like they do, those cheeky scamps), was last year’s winner, Yannick Alléno of Le Meurice. “It’s a great moment for a cook to receive this famous trophy,” said Frechon. “When you see colleagues lining up to say, ‘Well done, boy’, that’s really something.” The 45-year old chef has been at The Hotel Bristol since 1999. His training grounds include La Tour d’Argent, Le Crillon (under Christian Constant), and his hip bistro in the 19th arrondissement, where it was impossible to snag a table. Featuring on Frechon’s winter menu, served in the stylish 18th-century dining room, are duck foie gras with figs, raisins and brioche. Sole stuffed with girolle mushrooms, fishbone essence creamed with vin jaune from the Jura region and iced liquorice with candied tobacco leaves from the Ardour. And, bien sur, President Sarko’s favourite – truffle-stuffed pasta. It’s rumoured that’s the reason Frechon was awarded the Legion d’Honneur last year. Quite right too.

“ Diners can have fish, say, sea-bass, seared or grilled one day, poached or fried the next, with classic or spicy world sauces ” 72

So, during the three-week wait for your table in The Bristol’s dining room, you can now entertain yourself at the newly opened 114 Faubourg next door. The 95-seater restaurant is on two levels, linked by a wrought-iron spiral staircase. Make sure you check out the new wing – 26 bedrooms and suites, decorated by Maja Oetker, owner Rudolf Oetker’s wife. The extension is created from five apartments, over seven stories, in an adjacent building. You could have Jessye Norman, Bruce Willis, Demi Moore or Claudia Schiffer in the next suite. “114 Faubourg’s a brasserie-rotisserie, but with a new concept offering diners the opportunity to choose from various cooking styles. They can have fish, say, sea-bass, seared or grilled one day, poached or fried the next, with classic or spicy world sauces,” explains 114 chef Eric Desbordes, MOF (Meilleur Ouvrier de France, a prestigious competition for craftsmen of all disciplines) 2004, previously at The George V, Pershing Hall and recently Eric Frechon next door. “Meat courses, say, beef-rib steak with French fries, can be seared or grilled, with a choice of sauces, and there are spit-roasted dishes from the rotisserie such as Szechuan pepper monkfish tail and wok vegetables.” Wash down with wines proposed by sommelier Marco Pelletier – the list includes interesting French and world wines, such as Yarra Valley chardonnay from Australia (€18 a glass) the excellent red Swartland, Lammershoek from South Africa (€14 a glass) Pic-Saint Loup L’Olivetto du Clos Marie 2007 (€35 a bottle) or a Chateau de Beaucastel Chateauneuf du Pape (€100 a bottle). Desbordes, who has worked with Frechon on the new restaurant, has a cooking style that’s young and creative, featuring starters such as baby vegetables with Provence herbs; smoked salmon

pillAr tAlk: the imposing two-level, 95-seater dining room at 114 faubourg is a joy to behold

and potato waffle; tempura of southern vegetables with garlic mayonnaise dressing; or hard-boiled egg and king crab with mayo dressing in truffle juice, a neat spin on the traditional oeuf-mayo. Mains include spicy honey-lacquered pork knuckle and turnip sauerkraut and rack of lamb with thyme and rosemary, sliced vegetables and parmesan. Fabulous desserts by Laurent Jeannin, Le Bristol’s talented pastry-chef, include definitely the best millefeuille in Paris with salty caramel ice cream. Don’t miss it. But what about the prices? Don’t ask, darling – off-the-chart expensive, you won’t get out for under €100 plus wine. Starters raise the curtain at €25-42, with mains weighing in bewteen €32-52. If you have capacity and funds, desserts tiptoe around the €20-mark. Desbordes promises they’re working on a menu formula. The project of the new wing and 114 Faubourg took about 20 years of town-planning heartache for the owners. Looking around the packed two-level space, the ‘beautiful pipple’ don’t seem remotely bothered by the prices. They know they’re worth it – and just as importantly, they’re not paid in sterling. 114 Faubourg is the chouchou de la rentrée – or in normal-speak, the talk of the town. H Le 114 Faubourg, 114 rue du Faubourg St-Honore 8th; + 33 (0)1 53 43 44 44;

wine malbec


Get High on Malbec

Nicolàs Catena tore up the rule book when he sited his vineyard 4,600ft up in the Andes. At the time, his critics scoffed; now they’re quaffing, and in droves, says garetH groves Most great New World wines are made from grapes that are also doing fantastic things in the Old World. Aussie shiraz is echoed by Rhone Valley wines, Kiwi sauvignon blanc by those of the Loire. However delicious, there are few unique styles. But there is one grape that has thrown off the old-country shackles, producing startling wines that don’t really have an Old World comparison. That grape is malbec, its new home is Argentina and the man who put it on the map is Nicolàs Catena. Catena is a pioneer, one of a handful of makers around the world who have broken new ground with their wines. Inspired by the work of Robert Mondavi in the US, Catena has lifted Argentina up from a bulk wine producer to the home of some of the world’s best wines, and he did it by going up in the world. His eureka moment was deciding to plant vineyards high up in the Andes mountains and in so doing he literally took Argentinian wines to new heights. He sited his new vineyard 4,600ft up in the Andes in 1993. No one thought that grapes would ripen that high up and even his vineyard manager disagreed with the project. However, the wines Catena subsequently produced would begin a Gold Rush among Argentinian wineries to plant higher and higher vineyards.

The grape that fuelled this trend was malbec. A largely forgotten grape in its native Gascony, malbec had been a workhorse grape in Argentina until Catena’s high-altitude vineyards turned it into something extraordinary – and crucially into a unique selling point for Argentinian wine. Having discovered that the unique climatic conditions up in the Andes produced outstanding fruit, Catena used a rigorous scientific approach to isolate the factors that were determining malbec’s success. Now, here comes the science bit. The high altitude has two main effects. First, it means much cooler night-time temperatures than daytime ones, which helps keep the grapes’ acidity and aromas intact, so the wine is racy and fresh rather than baked and cumbersome. Secondly, these altitudes enjoy intense UV light that produces the thickest,

“ Malbec had been a

workhorse grape in Argentina until Catena’s high-altitude vineyards turned it into something quite extraordinary ”

ripest grape skins on the planet. And thick, ripe grape skins produce wines stacked with colour, fruit flavour and cashmere soft tannins. The combination of floral aromatics, racy acidity and soft, juicy black fruit can be absolutely thrilling. Especially if there is a big slab of steak joining it. In a few years malbec went from bit-part player to one of the hottest properties in wine. Catena’s top malbecs are now generally regarded as among the world’s very best wines. He has a joint venture with Bordeaux First Growth Chateau Lafite and the big critics are full of praise for his wine. Robert Parker’s The Wine Advocate regularly showers Catena’s top wines with scores of 95 or more out of 100, while Jancis Robinson frequently praises them for their bordeauxlike freshness and elegance. His work was honoured this year when Decanter magazine made him the first South American to win their prestigious Man of the Year award. Excitingly, Catena believes that the best is yet to come. His wines may already be world beaters but he says that the best vineyard land has only been identified and planted recently. These vineyards still need to mature and won’t be producing their best wines for another decade or so. For Malbec lovers, the future is very bright indeed… H Find out for yourself at



Dubai – On the Up?

It’s been a rollercoaster year for the UAE property market – though the vertigo-inducing falls of the first quarter have been replaced with a return to stability, says BERNADETTE COSTELLO


“ Thankfully, the

magnitude of the decline in UAE property prices that occurred in the first three months of 2009 is now very unlikely to be repeated ”

months of 2009 is now very unlikely to be repeated,” says Colliers’ Ian Albert. A new air of optimism is now floating through the emirate along with some hefty lease reductions on many new buildings coming to market. Real estate analysts at CB Richard Ellis say this has benefited both corporate and residential tenants who are moving to higher-spec properties for the same rate as their existing units.

ILLuSTRATION by Jamel Akib

A STIckY SuMMER of predicted price falls left those in Dubai’s property industry feeling a little less hot under the collar once they saw the actual figures. Market specialist Colliers found that the 42 per cent drop in prices for 2009’s first three months was followed by nine per cent fall in Q2. New transactions had also taken place. “Thankfully, the magnitude of the decline that occurred in the first three


the Galleries

But inside the enormous, emblematic Burj Dubai tower it’s a different story. As the last panel of glass was fixed to the 800m structure, rentals for office, residential and Armani hotel space here soared. This is having an upward effect on retail, office and residential letting rates in the surrounding 500 acres of downtown Burj Dubai. Meanwhile properties at Arabian Ranches, the Palm Jumeirah and Dubai

tameer towers

Downtown Jebel Ali, Dubai

Al Reem Island, Abu Dhabi

Limitless is arguably the ‘greenest’ of Dubai’s master developers with its ‘human thread’ ethos running throughout downtown Jebel Ali. This 11km-stretch of the Sheikh Zayed Road will have 50 per cent gardens, pools and open spaces, and the developer will encourage a projected 200,000 residents to walk to work, dine, shop and be entertained here. Metro stations and a ‘People Mover’ will carry residents between four zones within Downtown Jebel Ali where Limitless has prepared 250 plots for other developers to build mixed-use projects. The green-minded developer is also nearing completion of its own project in Downtown Jebel Ali. This chic Zone 1 area called The Galleries includes eight mixed-use buildings set among terraced gardens, pools, plazas and shopping. New corporate tenants have leased through DTZ and include Ericsson, Kraft Foods, Citibank and Standard Chartered. Residential apartments are set to complete in early 2010. ■ Price: POA ■ Contact: Limitless ■ T:+971 4 332 9267 or +971 4 435 7812 ■ W:;

The Shams District occupies a quarter of Al Reem Island and is set for a growing population of skyscrapers and around 100,000 residents. The main focal point in Shams is Tameer Towers, an ultra-modern complex that will cover nine million sq ft when complete in 2011. Four residential towers will flank the 300m business tower – the tallest in Abu Dhabi. It will split at level 20 and straddle on two ‘legs’ the canal that runs between Central Park and the sea. The development is Tameer Holdings’ flagship project in Abu Dhabi and will also include a seven-star luxury hotel, private marina, retail and dining venues. Global architects Gensler, the creative brains behind Tameer Towers, have also designed a supporting glass wall to create a light-filled 175ft high atrium. Residential towers will reach a heady 745ft high and will offer both sea and canal views, while properties within the rest of the $6.9bn project will include a well-balanced mix of townhouses, penthouses and private villas. ■ Price: POA ■ CONTACT: Tameer ■ T: +971 4 601 0600 ■ W:

“ Urgent calls for wider mortgage availability, safer investment terms and ‘greener’ property developments are also giving consumers more buying power ”

Marina are reportedly among the top five places to invest in Dubai. According to CBRE, investors are now taking a longerterm view and are letting, rather than selling, their completed properties. Urgent calls for wider mortgage availability, safer investment terms and ‘greener’ property developments are also giving consumers more buying power and, consequentially value for money. ▶




Juniper Way Jumeirah Golf Estates, Dubai The Dubai World Championship, probably the world’s most talked about sports prize, teed off on 1 November at Jumeirah Golf Estates. The $10m prize fund is open to players numbered 1-60 on The Race to Dubai [formerly The European Tour Order of Merit] and players will be given the opportunity to compete for another $10m as a bonus fund. Fire, Earth, Water and Wind will be the themes of each golfing community living here, with 75 per cent of properties facing the golf courses. Jumeirah Golf Estates is home to courses designed by legends Sergio Garcia, Greg Norman and Pete Dye, and the official home to the European Tour International HQ. Villas and townhouses will offer both traditional and contemporary designs and will be set among spas, clubhouses, wellness centres, pools, shopping and dining experiences, as well as Metro stations. Even the new Arabian Canal will make an appearance. ■ Price: Villas from £1.2m ■ Contact: Jumeirah Golf Estates ■ T: +971 4 366 2908 ■ W:

▶ “For many property owners it is at least as much about managing their costs as reducing their carbon emissions,” says Chris Speller, group director of Cityscape – the largest annual property show taking place in the United Arab Emirates. “During the boom, developers had no financial incentive to go green. However, owing to changing market dynamics, developers now need a competitive edge.” But speculators still have their eyes on distressed property. Loxley McKenzie, founder of City-based property specialist

“ During the boom,

developers had no financial incentive to go green. However, owing to changing market dynamics, developers now need a competitive edge ” 78

Colordarcy, says: “We have been looking at a few distressed markets and our success in Florida has given us a proven model to follow for Dubai – from January 2010 we will be offering super deals. “We believe that prices will drop further in Dubai so we will be extremely selective with what we market, and we’ll work with developers to package deals in various formats [fractional, Sipp-able].” The UAE’s focus on sport continues to draw both investment and tourism – much of Dubai Sports City is open, and golf’s most expensive prize, the Dubai World Championship, took place this November at Jumeirah Golf Estates. And Abu Dhabi has also just hosted its first Formula One Grand Prix on the stunning Yas Island, where seven new hotels offer a total of 2,500 rooms. To prevent its economy from stalling, Abu Dhabi’s government pumped 16bn dirhams (£2.6bn) into five local banks earlier this year in an attempt to make them “strong and well-capitalised compared with their international peers”.

And to keep the UAE capital in the spotlight, Abu Dhabi invited a group of Hollywood producers there this summer to promote the benefits of filming future movies in the emirate. In other UAE states, Ras al Khaimah continues to ignite interest because property prices are up to 40 per cent lower than Dubai’s. Ajman has released a list of 24 approved developers including Sweet Homes, which is building Ajman Uptown – a project comprising a shopping mall, hotel, apartments, school, fire station, mosques, health club, markets and parks. Buying property in Sharjah, the third largest emirate of the UAE, isn’t so easy for foreign nationals. However, individuals can put the paperwork under someone else’s name, perfectly legally. Saudi developer Al Hanoo is leading the charge in investment into resorts in Sharjah with ten interconnecting Nujoom Islands – making it by far the largest commercial and tourism project in the state to date. Furthermore, a $4bn yachting marina is also set for Sharjah’s Al Khan peninsula. H

the last word the silence of the man

end play

Oi, Hedgies, Speak Up! Cat Got Your Tongue? eugene costello asks why UK multimillionaires are as shy as a virgin at her first disco. In the US, you can’t shut ’em up What is it with hedge fund managers and publicity? It seems to be about as welcome as chlamydia or Piers Morgan (not necessarily in that order). As associate editor of this august organ, I have on occasion tried to practise oldfashioned journalism by picking up the phone to speak to a hedge fund manager. But – with one or two notable exceptions – I have been made to feel about as welcome as a paediatrician in Portsmouth. So why is this? It’s been all too easy for the media to portray hedge fund managers as bogeymen who stalk the land, spoken of only by mothers in hushed tones as they warn their children not to stray. Pubs now have signs saying, ‘no football shirts, no work wear, no hedgies…’. Probably... But it could all be so different. Take a look across the Pond, where hedgies are out – and they’re proud. On p47 US fund manager Wayne Waddington III (no, not a film title) can barely contain his boyish excitement as he discusses career and trades: “On this slow summer day his earnings were $4.8m! For just one day! And for performing only 80 basis points! That’s what I’m talkin’ about you motherfuckers!” (OK, I made the last line up. But you get the picture.) And if you ever catch CNBC’s morning business show Squawk Box, it’s much the same story. Fresh-faced preppie hedgies

“ It’s been all too easy

for the media to portray hedge fund managers as bogeymen who stalk the land, spoken of only by mothers in hushed tones as they warn their kids… ” 80

who whoop and holler their trading figures in the cultural knowledge that viewers will admire them, rather than (as you all seem afraid would happen here) Googling them, cross-checking the electoral roll and going round to their house to kidnap their wife, kids and parrot for a hefty ransom. One happy exception to the rule is the laudable Hugh Hendry, who is candid, open and happy to talk to the press. But he is a goat among sheep. Why so shy, guys? Is it a cultural thing? I live in north-east London, not far from Stamford Hill. It’s the largest settlement of Hassidic Jews – frummers, as they are known to other Jews – in Europe. They’re like Jewish Amish, eschewing many of the trappings of modern society, unless we’re talking Volvos, and insisting on wearing medieval eastern European garb – frock coats, knee-length breeches and white stockings. For the sake of clarity, we mean the men. The women have to wear wigs (sheitels) to avoid sending menfolk other than their husbands into a psychotic rage of crazed lust. A bit like women’s ankles in the early days of Wimbledon. Frummers are like badgers – shy, nervous, crepuscular creatures that prefer to stay within their own sett and typically emerge self-consciously at dusk. And yet go to New York and you’ll find the frummers are as loud, chatty and opinionated as Cockney market traders are here. I called into an electrical store to buy myself a cheap radio (to listen to the BBC World Service, if you must know). B&H Photo Video is on 34th St – and here I discovered a modern-day miracle. Frummers are actually really friendly in Manhattan. The store is ‘kosher’ – the website will only process orders when shabbat ends on Saturday night – but the guys working there couldn’t be more pally. It was all, “Hey buddy, how ya doin’?” and “Jeez, you’re from London, England?”

I left the store an hour later armed with a radio, and a list of restaurants and sights to check out. The one time I went into a frummer shop in Stamford Hill for a pint of milk, I was met with a wall of silence, staff refusing to make eye contact until the mutual embarrassment became so awkward that I left. I decided there are worse things than black coffee. So is this what we’re talking about? A cultural gap between the UK and the US the size of Cheddar Gorge/the Grand Canyon (delete as appropriate)? As Winston Churchill said, we are “two nations divided by a common language”. And by a different outlook, I would add. In the States, it’s easy to imagine the boy that, seeing a shiny new Cadillac, thinks, “You know what? I’m gonna get a job in the pizza parlour. I’m gonna work double shifts and save enough money to have my own pizza parlour. Then I’m gonna have a chain of pizza parlours across the Midwest. Then I’m gonna buy myself a Cadillac.” In this country, it’s easy to imagine the boy that, seeing a shiny new Bentley Continental GT, thinks, “Cunt”. Then runs a key down the length of the car. Perhaps if you guys weren’t so shy and retiring and actually spoke about why making money can be a great thing, he might put his key away – and start dreaming of his first million. Over to you… H Eugene Costello is associate editor of HEDGE.

The Berkeley Baguette in rose gold

30 St James’s Street London SW1A 1HB Available from Asprey New Bond Street, Harrods Fine Jewellery and Watch Room, Selfridges Wonder Room, Weir & Sons Dublin

Hedge Magazine - Issue 10 - 'Greenspan in the Dock'  

Hedge Magazine - Issue 10 - 'Greenspan in the Dock. Plus: Watch and Jewellery Special'

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