FT : The independent artisans changing the face of watchmaking

The independent artisans changing the face of watchmaking
Vanishingly few watchmakers have what it takes to make it on their own, so those who do are rightly revered

In July, Sotheby’s London brought the gavel down on a watch that went for £3.6m. Even these days, when seven-figure auction results for watches are far from uncommon, that is a sizeable chunk of cash. But what makes this result significant is that it was achieved neither by a Patek Philippe nor a Rolex – in fact, not by any established Swiss brand at all – but by a pocket watch made by an artisan in a workshop on the Isle of Man.

The timepiece was the George Daniels Space Traveller pocket watch – a decidedly up-to-date moniker for a decidedly 19th-century-looking specimen with dials showing equation of time, mean-solar time, sidereal time and the phases of the moon. The late George Daniels, who finished the watch in 1982, described it as “the kind of watch you would need on your package tour to Mars”.

Long before he died in 2011, Daniels was often described as one of the greatest – if not the greatest – watchmakers of the last century. I never drank as deeply of the Daniels Kool-Aid as did others, so I tend to see him rather as a wonderful anachronism, the greatest 18th-century watchmaker of the 20th century. But more than that, he was the prototypical independent in that he inspired a generation of watchmakers to set up workshops making just a handful of watches a year.

At the moment, “independent” is about the most desirable adjective you can put in front of the word “watchmaker”. In the past decade, interest in watch collecting has mushroomed, with a market centred around horological complications or steel sports watches by the big Swiss names. But over the past couple of years, a significant and informed minority of collectors has been attracted to the work of watchmakers who have chosen to follow Daniels’ path. These craftsmen are not dissimilar to the very best bespoke tailors or supercar constructors in that their output remains small and waiting lists long.


“In every watchmaker’s career, there comes a point where they look out of the manufacturer’s window and wonder if they have what it takes to make it on their own,” says Aurel Bacs, a senior consultant in the watch department at Phillips auctioneers, who has become the most high-profile of evangelists for the independents. “Independence can be a lonely adventure, and only a few find success. By signing their work, these makers put their reputations on the line with every watch they produce. They have given collectors the greatest of luxuries, the gift of choice. Their watches are atypical and that is why we love them.”

In fact, Phillips loves them so much that at the beginning of September it opened a showroom at its London HQ selling both vintage timepieces by big names and watches from modern independents. The idea originated with the house’s London-based watch expert, James Marks, a former financier who followed his passion for horology. While collecting watches by the great brands such as Rolex and Patek, he also craved variety – and as a result he bought his first FP Journe. “It was a Chronomètre Bleu in tantalum,” he says. “I like the idea of an unusual metal, and the dial with its off-centre sub-seconds was both intriguing and elegant. As for the movement, it was a dream.”

Journe produces just under 1,000 watches a year, which by general industry standards is tiny, but next to many independents is huge. Marks terms the highly regarded brand, helmed by its eponym François-Paul, an “industrial independent”.

By comparison, Laurent Ferrier, produces only around 100 pieces a year. Ferrier, the son and grandson of watchmakers, spent almost 40 years of his working life at Patek Philippe. Bearded, snowy-haired, self-effacing and speaking only French, he is exactly how you would expect the typical watchmaker to be. But beneath that Father Christmas-like exterior beats the heart of a maverick. In 1979 Ferrier entered the 24 Hours of Le Mans driving a Porsche 935 and finished in overall third place. In short, his technical ability is spiced with character and determination and as a result the watches he makes, such as the Galet Square, are, like their maker, discreet but unmistakable, with elegant lance-like hands and satin-finished dials.

Ferrier has turned away from gratuitous complications and towards the classic values of watchmaking. He describes these as precision, simplicity and uncluttered beauty. The same can equally be said of the man regarded by many as the cynosure of independents: Philippe Dufour. This pipe-smoking septuagenarian has been one of the most respected figures in watchmaking since 1992, when he presented a minute repeater with grande and petite sonnerie, the first time these complications had been mastered in a wristwatch. But he is most associated with the three-hand Simplicity, a grail watch for younger collectors.

But not all independents are white-haired old men. One of the most remarkable is 32-year-old Rexhep Rexhepi, who works with a small group of watchmakers in Geneva’s Old Town, creating around 25 watches a year. He was accepted by Patek Philippe’s school aged only 15 and launched his own brand, Akrivia, seven years later, where he began making complicated watches in an idiom redolent of fellow independent De Bethune.

Last year, he launched the Rexhep Rexhepi Chronomètre Contemporain, a discreet 38mm hours, minutes and seconds wristwatch whose only goal is accurate chronometry. Such mechanical refinements as it has – zero-reset function and 100-hour power reserve – are at the service of precision timekeeping. It is a quietly impressive tour de force of Genevan restraint (though the watchmaker himself hails from the Balkans – Rexhepi’s family emigrated from Kosovo to Geneva when he was 12 years old).

That is another thing about independent watchmaking: skill, passion and ingenuity count for more than Helvetian origins. Ludovic Ballouard, whose eccentric Upside Down and Half Time watches display the hours and minutes with simplicity and whimsy in equal measure, was born in Brittany. Christophe Claret, known for his minute repeaters and chiming watches, is from Lyon, while Kari Voutilainen, as famous for his bewitching dials as his exigent complications, is of Finnish origin. And although they and others have made their way to Switzerland, some, including Hajime Asaoka and Roger Smith – the latter perceived as the heir to George Daniels – prefer to follow the horological muse from elsewhere in the world: in this case Tokyo and the Isle of Man, respectively.


There are plenty of other interesting independent watchmakers, too many to mention in this article. However, even if their entire annual output were aggregated, it would be easily eclipsed within a week, if not a day, by one or other of the big industrial brands. And yet their influence is almost in direct inverse to their output. In 2016, the annual Geneva watch fair, the Salon International de la Haute Horlogerie, created a salon within a salon called the Carré des Horlogers, showing the work of small brands and independent artisans. Three years ago, there were nine exhibitors in the Carré. This year, there were 17, including Ferdinand Berthoud, a maker of a handful of precision‑focused watches.

Berthoud is, in fact, an 18th-century marine chronometer maker, relaunched as an elite watch brand with limited production by Karl-Friedrich Scheufele, co-president of Chopard. Scheufele has, in effect, created an independent, motivated by the same goals, that just happens to be within the structure of one of the industry’s major players. A watch lover as well as a watch boss, Scheufele opened a boutique on Monaco’s Place du Casino in March 2019 called Art In Time. It offers watches not just by his own brands but other independent watchmakers. Further such boutiques are planned.

Also exhibiting at the Carré this year was Romain Gauthier. He founded his brand in 2005 and it is now part-owned by Chanel. “At Baselworld a few years ago a friend told me I should meet this guy,” says Nicolas Beau, director of international business development for watches and fine jewellery at Chanel. “He was alone on his booth, showing one watch. He’s one of those few watchmakers who can create a movement, a case, a logo, a company. And when we saw his know-how in components of haute horlogerie, we decided to acquire the company to secure them for Chanel.”

Even more interesting was the announcement towards the end of last year that Chanel had bought 20 per cent of FP Journe. “It’s a totally different story. I think it’s a pure history of a friendship between our owners and François-Paul,” says Beau.

Or, to paraphrase the late Victor Kiam, some people are so keen on independent watchmakers that they don’t just buy the timepieces, they buy the company.

>>> EU Chief negotiator Barnier said to have told EU27 that latest proposals are

EU Chief negotiator Barnier said to have told EU27 that latest proposals are not enough - financial press
- Needs agreement on legal text by the end of Tuesday to recommend to member states on Wednesday that EU leaders approve deal at Thursday-Friday Summits
- If there is no agreement by the end of today (Tuesday, Oct 15th) then Barnier may recommend to EU Leaders that more negotiations are needed afterwards

efinancials : Pay at Brevan Howard vs. pay at Eisler Capital Management by Sarah

Pay at Brevan Howard vs. pay at Eisler Capital Management

by Sarah Butcher 48 minutes ago
The hedge funds Brevan Howard and Eisler Capital Management have both just published accounts for 2018. As ever with hedge fund accounts, they're slightly obfuscated by a mass of related materials, but they still provide an indication of how much London's two big macro funds pay.
Brevan Howard has in fact filed an entire array of accounts with the UK's Companies House for various operating companies. These include Brevan Howard Asset Management LLP, Brevan Howard Asset Management Services, and Brevan Howard Company Secretarial Services, among others.

The core parternship, Brevan Howard Asset Management LLP, had a good year in the year ending March 2019. Revenues rose from £66m to £141m and profits available for distribution between members (partners) rose from £17m one year earlier to £64m. Brevan Howard doesn't say how many partners it had last year, but right now it has 18. All things being equal, they got £3.5m each. A separate regulatory filing on Brevan Howard's website says it had 16 code staff during the year ending March 2019 and that they were paid a total of £59m (£3.7m each).
How about the non-partners at Brevan Howard? Brevan Howard Services paid its 51 employees and secondees a total of £7.4m in 2018, or £145k each. No accounts have been filed (sadly) for Brevan Howard's secretaries.
Eisler Capital Management also had a good year in 2018. Accounts filed for Eisler Capital Management Limited show revenues doubling (to £48m) and profits tripling (to £16m). The company employed 48 people last year, up from 26 in 2017, and paid them a total of £25m - so, an average of £511k each. The highest paid director (likely Edward Eisler himself) earned £700k for the year.
The implication is that Brevan Howard's partners are far better remunerated than Eisler Capital's directors, but obviously it's not that straightforward. Brevan Howard's partner pay figures are flattered by the fact that they only pertain to the fund's highest paid people. Eisler's best performing portfolio managers may be paid even more than its directors and the £25m Eisler paid staff will be skewed towards top performers.
Either way, 2018 seems to have been a good time to work for either Brevan or Eisler - even though macro funds as a whole were down 3.21% last year. 2019 may be better still. After a difficult start to the year, Brevan Howard reportedly had its best first half in a decade.

FT : Natural gas lending faces boot from European Investment Bank

Natural gas lending faces boot from European Investment Bank
Vote to stop funding projects would extend clampdown on fossil fuel use

The European Investment Bank faces a knife-edge vote on Tuesday on a proposal that would ban it from channelling billions of euros towards natural gas projects, extending a clampdown on fossil fuels by multilateral lenders.

The board of the world’s largest multilateral development bank is poised to vote on whether to halt all new loans to fossil fuel projects from the end of 2020, despite pushback from members including Germany and the European Commission.

The EIB — whose shareholders are the EU’s member states — would be the first multilateral bank to boot natural gas out of its portfolio for new loans. It has already halted all coal lending.

Ursula von der Leyen, the incoming European Commission president, has pledged to make tackling climate change a priority, and talked about making the EIB a “climate bank” that can fund the transition to a low-carbon economy.

However, some big EU member states including Germany and Poland oppose the proposed changes to lending policy, while the existing commission has also expressed reservations.

“Natural gas will remain an important component in the EU’s energy mix in the near future, as we move toward cleaner sources of energy, ” commission spokeswoman Annika Breidhardt said in a press conference on Monday.

Environmental advocates say the vote could be a turning point for natural gas. “This is a test for whether the EU and its member states are serious about climate action,” said Alex Doukas, analyst at Oil Change International. “If you look at the rate at which Europe needs to decarbonise to meet its new climate targets, there is not room for new gas.”

Werner Hoyer, the EIB president, wants more than half of the bank’s lending to be climate-related and sustainability-related by 2025. The EIB is also targeting $1tn in total climate-related funding in the decade from 2020 to 2030, which would represent a significant acceleration.

“We have just over ten years to turn the tide on the climate and environmental emergency,” Mr Hoyer said last month in New York. “The world is heading in the right direction, but it is behind schedule.”

Since 2013 the bank has lent €13.4bn to fossil fuel infrastructure, of which more than €9bn went to natural gas pipelines and distribution networks.

Industry campaigners argue that natural gas should be part of a transition to cleaner energy, because natural gas plants can be used to balance intermittent power from renewable sources such as wind and solar.

Proponents also point out that building less gas infrastructure could keep existing coal stations in operation for longer.

Last week Bob Dudley, BP’s chief executive, complained that natural gas was getting “demonised” by the anti-fossil fuel movement, arguing that it has a “vital role” to play in the transition toward cleaner fuels.

Some EIB board members have asked to water down the proposal by pushing back the suggested 2020 implementation date.

The proposal would also apply only to “unabated” fossil fuel projects — those that emit carbon dioxide — leaving a potential opening for funding infrastructure that use technology such as carbon capture and storage.

A majority is needed to pass the proposal, and votes are weighted according to how much each country contributes to the EIB.

FT : Bill Gross warns of slow growth and sluggish markets

Bill Gross warns of slow growth and sluggish markets
One-time ‘bond king’ recommends dividend-paying stocks over negative-yielding debt

Bill Gross, the one-time “bond king” who co-founded Pimco in 1971 and built it into a $2tn asset manager, is warning investors to brace for slow economic growth globally and an end to double-digit annual stock market gains.

In his first investment outlook since retiring in March, Mr Gross said on Tuesday that with trillions of dollars in debt offering negative yields, investors should be holding stocks that promise secure dividend payouts.

Mr Gross, 75, whose letters to investors are as famous for their quirky asides and analogies as for their economic and market analysis, employed a 1980s pop music reference to discuss the impact ultra-low interest rates have had on asset prices.

Financial markets, he said, “have been ‘Saved by Zero’ as the rock group The Fixx rather ironically sang way back in 1983”.

Low rates boost stock valuations relative to bonds while stimulating the economy. Mr Gross estimated that stock prices in 2019 have risen by roughly 15 per cent because real 10-year Treasury rates declined by 80 basis points during the year.

“Since 2009, perhaps one quarter of the 200 per cent rise in the US market can be attributed to the 200-basis point decline in real Treasury rates over the same period,” Mr Gross said. “Bull markets in equities are born by lower real rates and the historic run of the past decade has been fertilised by the journey to zero.”

Mr Gross said further upside in equity markets is limited, because central bankers were “becoming wise to the negative effects of rates at zero (or less) that literally rob small savers and larger financial institutions such as banks, insurance companies and pension funds of their ability to earn historically ‘guaranteed’ carry”.

In the absence of “substantial fiscal stimulation”, he said, the boost from negative interest rate yields may have reached an end after years of double-digit gains in equities, he said.

Mr Gross, who turned to investing after serving as a US naval officer, co-founded Pacific Investment Management Co in 1971, attaining rock-star status in investing circles as he attracted hundreds of billions of dollars in assets. His tenure at Pimco ended abruptly and acrimoniously in September 2014, when he was ousted.

Mr Gross then joined Janus Henderson Group in October 2014 but endured a rocky four years of performance.

Mr Gross, whose net worth Forbes magazine said on Monday had declined to $1.5bn from $2.5bn as recently as June 2018, featured his latest investment outlook on his new website, www.williamhgross.com, where investors can view an archive of some of his market commentaries from the past 40 years.

“My best ones, in my opinion, were mentally framed during quiet moments in a shower or after a hard workout at the gym when endorphins open the brain to subconscious thoughts and feelings,” Mr Gross said. 

“They are as much as an autobiography as I could have written, but framed in a monthly series of essays, compiled over four decades that show a maturation or perhaps a moulting of my life’s philosophy. They represent who I was, who I am and who I expect to become. I hope that in certain ways, they connect with your own experience.”

The website will also feature the philanthropic activities of The William, Jeff, and Jennifer Gross Family Foundation, which has more than $390m in assets under management.

>>> Europe : Brokers Upgrades & Downgrades - 15th of October 2019 V2 (+)


>>> Up
* Bouygues Raised to Buy at HSBC; PT 43 euros
* Brunello Cucinelli Raised to Buy at Goldman (+)
* Dunelm Raised to Sector Perform at RBC; PT 850 pence
* Duni Raised to Buy at Handelsbanken; PT 135 kronor
* Fugro GDRs Raised to Hold at ABN Amro Bank
* Hilton Food Raised to Buy at Peel Hunt
* Worldline Raised to Buy at Citi
* Zealand Pharma Raised to Buy at Goldman (+)

>>> Down
* Commerzbank Cut to Underweight at Morgan Stanley; PT 4.90 euros
* Elisa Oyj Cut to Underweight at Barclays; PT 38 euros
* Gofore Cut to Reduce at Inderes; PT 7.80 euros
* Hermes International Cut to Sell at Goldman (+)
* Iberdrola Cut to Neutral at Citi
* Magseis Fairfield ASA Cut to Hold at ABG; PT 7 kroner
* MTU Aero Cut to Hold at Hauck & Aufhaeuser; PT 250 euros (+)
* Pandora Cut to Sell at Goldman (+)
* Publicis Cut to Hold at Berenberg
* Remy Cointreau Cut to Hold at Berenberg
* Rheinmetall Cut to Neutral at MainFirst; PT 119 euros
* Sophos Cut to Hold at Jefferies; PT 583 pence
* Vinci Cut to Hold at HSBC; PT 103 euros

>>> Initiation
* Flutter Reinstated Sell at Shore Capital (+)

>>> Call
* Goldman Favors Luxury Mega Brands, Downgrades Hermes and Pandora
* Commerzbank Rated Underweight on Earnings Risk: Morgan Stanley (+)
* Dunelm Upgraded at RBC on ‘Reasonable’ Valuation, Market Share
* Iberdrola Cut After Strong Run, Value Is in Subsidiaries: Citi
* Publicis ‘For the Brave and Patient,’ Cut to Hold: Berenberg
* Remy Cut at Berenberg on Slower Cognac Growth in Mainland China (+)
* Worldline Shares at Attractive Entry Point, Citi Upgrades to Buy
* Hilton Food Up to Buy, Tesco Deal Brings Confidence: Peel Hunt (+)