Our investigation of the small, but growing fractional yacht business led us to Dr. Loren Simkowitz, the founder and CEO of Monocle Yachts. His company currently has about 40 yachts under fractional ownership and management and expects that to grow to 100 yachts over the next few years.

First, let’s define a yacht from Monocle’s perspective: typically a 125 foot, 4-5 stateroom yacht, that would cost $4-6 million to buy, and another $500,000 per year to maintain. Boats will also include a jetski, tender and all knds of fishing, snorkeling and water sport gear.

At Monocle, owners will buy a 1/10th share of a specific yacht, usually for a four week period. An additional share adds another four weeks of time on the boat. A share would be in the $450,000 range, for a $4.5 million yacht and annual operating costs for one fractional owner would be about $35,000 per year (a quick way to calculate that would be $20 per foot of boat per month).

In October, owners select their 1st, 2nd and 3rd choices for one of twenty, two-week calendar periods and Monocle attempts to match these preferences to each yacht. Typically the yachts are in the Caribbean for the winter and either in the Mediterranean or New England for the summer.

Other aspects of the program: owners can swap their time for time on another similar boat and shares can be sold, usually by Monocle, who charges a 5% broker fee. According to Simkowitz, one of the advantages of using Monocle Yachts is that they are able to negotiate yacht purchases with fleet pricing and avoid some of the typical “dealer mark-up.” The owner (via Monocle if he chooses) can also lease or rent some of his time each year to a third-party.

Simkowitz described his firm as “managing the business of boating,” and in particular, insulating his owners from some of the less savory (and costly) aspects of buying and maintaining a very expensive asset. He provides a chef and captain, both of whom will call the owner two to four weeks prior to departure to discuss the trip plan, guests, dietary needs etc.

He also stressed their focus on caring for each yacht. They visit and inspect each one every year, and every yacht comes back to Fort Lauderdale twice a year for a full inspection and maintenance.

There are obvious drawbacks to sharing an asset with others – geting the boat when you want it all the time is not posible and, of course, you canot leave personal belongings on the boat. As others have noted, even owning a fraction of an asset that usually depreciates may not work for some. But for those that want to own at least a part of a luxury yacht, Monocle Yachts has six years of experience and is one of the veterans of the industry.