Owners' guide to yacht management companies
by Kenny Wooten
If a management company does not have on-staff expertise in a specific area, it often has relationships with specialists who do.
For regulatory compliance, it may go to someone like Ken Argent of Water’s Edge Consulting Ltd., who specializes in ISM and ISPS (International Safety Management Code/International Ship and Port Facility Security Code) management and MLC (Maritime Labor Convention) compliance.
Argent’s business provides shore-based regulatory compliance services to yachts over 500GT that are engaged in trade (charter in the case of yachts) as required by the various codes, regulations and conventions.
Most broad-brush brokerage companies offer regulatory compliance services, but, says Argent, ‘Some owners prefer to deal with people who have no connection to a brokerage house.’
Other firms offer a wide range of services, but specialize in a narrower branch of management. Isle of Man-based I-Cap Marine Ltd., is an example of a larger company that focuses on a speciality slice of the management pie. I-Cap Director Stephen Brew described his company as a ‘corporate and statutory manager’.
‘A yacht manager will undertake technical management, day-to-day crew management, and day-to-day operational management of the yacht, in close co-ordination with the captain and crew,’ says Brew. ‘The corporate and statutory management of the yacht, which is what we undertake at I-Cap Marine Ltd., is in very simple terms, the management of the corporate ownership structure.
‘At the same time, we work with nearly all of the major yacht managers for yachts of all shapes and sizes. [When there is a] yacht manager involved, we tend to look after the ownership structure, accounting and VAT compliance, while the yacht managers handle all day-to-day, operational oversight of the yacht.’
Managing private yachts
By some estimates, there are more than 7,000 yachts 24m and above worldwide, but only a small percentage of their owners retain the services of a management company. Those who don’t are likely owners of private yachts that do not engage in commercial activity such as charter. So who’s coordinating all the details if not a management company?
Often captains serve as the lead management executive, hiring crew, keeping books and managing the technical aspects of the yacht. But an owner moving up in class may find the added layers of regulation and compliance strain the resources and time of his captain.
Some owners use accountants or managers within their businesses and software such as Marine CFO or Manage My Vessel to coordinate those activities in conjunction with the captain. The owner of the 85m Cakewalk, launched in the US in 2010, established a separate entity to handle the management details of his yachts.
‘We started our own management company, Yacht Logistics Inc., in 2000, after the launch of the 62m Cakewalk [the owner’s previous yacht],’ says the owner’s long-time captain, William Zinser.
‘We sent a former crew member to school to learn the safety management program required to manage our vessel. We set up our own payroll, insurance, immigration lawyer, accountant and our own safety management program,’ continues Zinser, ‘which ended up being less expensive than the alternatives. We use a shoreside engineering company and pay them as we go.
‘I initiate and oversee all of the SMS [Safety Management System] on board Cakewalk and delegate its implementation to the necessary crew to make sure it is adhered to.’
Zinser, who is a partner in Yacht Logistics, says the company now handles safety management, payroll, mail and other services for four other vessels. He thinks a management company is a good choice for novice large yacht owners.
‘A person who has never been a yacht owner before could definitely benefit from a large management company, unless he or she can put all this together himself or herself before purchasing a large yacht,’ he says.