The king of cruise control

Already established as a dealmaker in his home country of America, Andrew Farkas is fast becoming a rising star on Dubai’s shores.

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By  Andrew White Published  January 29, 2006

|~|farkas-200.jpg|~|EARLY START: Farkas was only 16 when he made his first foray into the business world, by launching a database company. Now still only 42, he is a tycoon with huge plans for Dubai.|~|Already established as a dealmaker in his home country of America, Andrew Farkas is fast becoming a rising star on Dubai’s shores. A well-connected tycoon and entrepreneur, Farkas has been welcomed by the property development company, Nakheel, as a prominent addition to its strategic alliances. Andrew White reports. For a man who sleeps only three hours a night, Andrew Farkas is unnervingly energetic. “I love the view,” he gushes. “It’s looking out over the Palm and the World, right on the water, so we can watch our projects get built — perfect!” For most office dwellers, a stunning view is a simple perk — a distraction from work, even. For Farkas, that vista is his work — stretching 40 floors below him are kilometres of coastland developments soon to receive a visionary transformation. Farkas is managing member, chairman and president of Island Capital Group (ICG) and its division, Island Global Yachting Ltd (IGY). Last month he announced a partnership with Nakheel, the Dubai-based property development firm, to design, develop and build up to 40,000 luxury marina facilities in the emirate. “We’re focused on developing luxury, world-class, mega-yacht orientated facilities on a global basis,” he says. “Our mandate is to become the luxury standard for marina venues worldwide.” Farkas is a self-confessed risk-taker who made his first foray into the business world at the age of 16, founding a database management company. He majored in economics at Harvard, and in 1984 — armed with a US$56,000 bank loan — founded a real estate investment bank called Metropolitan Asset Group. After a successful first couple of years, however, the financial climate conspired against him and he found himself in debt to the tune of US$10 million. He was 26. Working hard to bail out his partners, Farkas came out fighting and founded Insignia Financial Group, where he was chairman and chief executive officer. And 13 years later, in 2003, he successfully merged Insignia into CB Richard Ellis, creating the largest real estate services firm in the world. His next venture was ICG, founded in May 2003, and more recently its affiliate IGY. Farkas formed IGY in order to acquire, develop, manage and operate world-class marina facilities around the globe. Dubai is the fastest growing region of waterfront development in the world, and Nakheel leads the way with its signature developments — The Palm Islands, The World and Dubai Waterfront. As the exclusive provider of design, development and management services for all Nakheel marina properties, IGY is literally at the forefront of Dubai’s waterfront developments. “People need great venues to take their vessels, and what IGY is trying to do is create a global yacht club,” he says. “If you’re a member of the IGY family, then whatever part of the world you’re in, you will have a world-class facility that will have space for you.”||**|||~||~||~|Farkas, you sense, relishes the opportunities — and attendant hazards — presented by Dubai’s surging economy. “There is no growth without risks," he says. “Vision requires the ability to take risks, but intelligently. Having had the privilege of meeting Sheikh Mohammed and Sultan Bin Sulayem many times now, these men are true visionaries and have the ability to take a calculated risk. The success of Dubai is testament to that.” Farkas was introduced to representatives of the Dubai royal family on a visit to the Gulf in 2003. He worked with Istithmar and Dubai Islamic Bank to create the Emirates National Securitisation Corporation (ENSEC), intended to be Dubai’s equivalent of the US’ Fannie Mae (a finance company in the housing sector). Farkas is understandably proud of the UAE’s successful adoption of the secondary mortgage system. “Just a few months ago, we completed Dubai’s first ever fully rated asset-backed securitisation,” he says. “It received a triple-A credit reading and was sold in its entirety into the US and European capital markets — the first time anything like that had ever come through this region.” Since ENSEC’s inception, Farkas has also worked with Istithmar on real estate deals, including the acquisition of 230 Park Avenue in New York. Then there is the small matter of introducing billionaire tycoon Donald Trump to the Dubai dream. “I’ve been doing business with Donald in many different ways for decades,” he says, matter-of-factly. “Donald was interested in Dubai, and Dubai was interested in Donald, so I introduced Donald and Sultan bin Sulayem, and helped them to structure an agreement.” Separately, Istithmar — a subsidiary of Nakheel, and a founding partner of IGY — is also an investor in Yacht Haven Grande, IGY’s US$200 million project in St. Thomas, US Virgin Islands. Grande, IGY’s largest development so far, is expected to open in the autumn. “It will be the largest mega-yacht facility in the world,” enthuses Farkas. “It’ll offer 17,000 linear feet of state-of-the-art yacht dockage, 125,000 feet of luxury retail, a series of luxury condominiums, a boutique hotel, office space, a convention centre, a waterpark, six restaurants and a Balinese-style yacht club that extends on stilts into the sea. That’s the standard from now on — the flagship for these types of facilities. It’s a resort unto itself, but also a sustainable community.” As befits a man redrafting the world’s waterfronts, Farkas is a keen sailor. His passion is evident as he discusses IGY projects spanning the Gulf of Mexico, Caribbean, East Coast of the US and Western Atlantic, Mediterranean, and Persian Gulf. He has a concentrated enthusiasm, combining the cool calculation of a highly successful businessman with the infectious attention to detail of a yachting devotee. “It’s a fabulous business, and being a boater taught me to recognise what I needed to know — that there was a market niche. But make no mistake: this is not a hobby. We have billions of dollars invested in this; it’s very much a business”. He admits he spends at least half of his time working on IGY, ensuring that no sheet is left unsecured in the pursuit of shore side luxury. “Most people make the mistake that a marina is just the docks where you park the boat. It’s not,” he asserts. “The marina consists of docks and the support infrastructure that surrounds those docks: the yacht club, the provisioning, the shopping, entertainment, dining. Creating a world-class marina is really the creation of an environment and a community, rather than just a place you put your boat. “Having been in the boating business for as long as I was, it taught me the disciplines I needed to develop this business. I understand the requirements of the vessels, and what the habits of the owners and the guests are. I understand what a crew does when the owners and the guests aren’t there, and I understand their maintenance needs.” For the present, however, he is personally high and dry, after an unexpected “but impressive” offer persuaded him to sell his 126ft schooner last year. “I’m so busy right now that I don’t have time to get a new one,” he smiles. Farkas spends his time shuttling between New York, the Caribbean, and the new IGY headquarters in Dubai. “The wonderful thing about Dubai is that there are no rules. if you have a new idea, or if you have something to bring to the market which does not yet exist, or that provides support to the environment that Dubai is creating, then I think the opportunities are limitless.” Farkas’ fondness for the city extends beyond business boundaries. In the spring he, his wife and his two children will holiday in Dubai. Moreover, he is “very seriously” considering buying a family home in the city. One thing’s for sure, though — he'll never be far from the water’s edge.||**||

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