Watch veteran keeps very little in cash, prefers to invest in RE

		Thu, Dec 31, 2009 The Straits Times

Keeping a watch on property deals

Swiss watch veteran keeps very little in cash, and prefers to invest in real estate

Swiss watch veteran and Parmigiani chiefexecutive Jean-Marc Jacot's first investment experience was in stocks.

He was 21 and a university student at Ipag, a business school in Paris. He set up an investment club for students at Ipag and decided to use the US $20,000 monetary gift from his grandmother to buy his first shares.He was lucky in his first few transactions and his investment doubled soon after.

'I thought the share market was a gold mine. It was only a few years later that I realised that to continue to do well in shares, you need to be a professional and spend time to monitor it daily,' said Mr Jacot, 60.

Some 15 years ago, he liquidated his share portfolio and concentrated entirely on real estate. Now, he owns 11 properties in Switzerland and France, eight of which are rented out, providing hima total monthly rental income of about US $30,000 (S $42,260).

Mr Jacot graduated from Ipag in 1972 and joined a United States watch firm in Germany as an assistant to the marketing director. Two years later,he crossed over to fashion house Cartier in Paris. In 1978, he partnered the founder of shoe firm Charles Jourdan to set up an accessories division.

He moved back to Switzerland in 1980 and worked for Omega as an international director for a year till he joined watch firm Ebel where he stayed till 1993.

On the side, in 1982, and with US $17,000, he set up a firm managing sports events and sportsmen. He would sell the business for US $10million two decades later.

In 1992, he set up his consulting firm JMJ & Partners with US $50,000. The firm now achieves an annual turnover of US $500,000.

He joined Gerald Genta in 1995, and in 2000, he moved to Sandoz Foundation, which owns Parmigiani.

MrJacot is married to Christine, 57,and they have two children: Geraldine, 31, and Alexis, 26.

Q: Are you a spender or saver?

I'm more of a spender. I enjoy buying things that I like, such as watches and paintings. It is difficult for me to resist. When I was in my 30s,I used to own cars like Bentley and Porsche. I save about 20 per cent of my income annually. I keep very little in cash, preferring to invest in properties.

Q: How much do you charge to your credit cards every month?

I don't know how much I charge to my credit cards every month. Too much,I suspect. I have six credit cards and some cash which I carry in my pockets. I do not have a wallet.

Q: What financial planning have you done for yourself?

My wealth comes from my income and good stock options. The bulk of my investments are now in properties.

I was interested in stocks in my younger days but later realised that the value of stocks may not have anything to do with the value of the firms. It depends on market sentiment. To make money, it is better to have control over what you invest in.

When I liquidated my stock portfolio, I lost half of the S $500,000 I had invested in stocks.

Q: Money wise, what were your growing-up years like?

My father worked as a chief executive in a machinery and tools business.My mother was a housewife. I have an older sister. We lived in a three-storey house in Neuchatel, Switzerland, and I had a wonderful childhood. My father was both a saver and a spender. He taught me that money is important but not the most important thing in life. I learnt from my parents not to judge people in terms of monetary value. Respect people for what they are and not what they have.

Q: How did you get interested in real estate investments?

My father advised me that the best long-term investments are in brick and mortar. The value of property goes up slowly but it always trends upwards due to limited space and increasing populations. In the short term, it may not be the best investment.

Q: What properties do you own?

I have two homes in France. Besides the family home in St Tropez, I have a three-storey house in a countryside village in the centre of France.The built-up area of the latter is 200 sq m and the land area is 2,000sq m. I bought it 16 years ago for US $500,000 and it is now worth US$2 million. I use it twice a year.

In Geneva, Switzerland, I have eight properties that I rent out, besides the condominium that I live in. The largest rental propertyis a 400 sq m penthouse with a terrace. I bought it in 1997 for US $1.9million, and it is valued at about US $3 million now. I'm renting it out for US $7,000 a month. The rest of the rental properties were bought in 1988, 2001 and 2002. They average about 150 sq m and they cost about US $7 million in all. My total rental income comes close to US $30,000.

Q: What's the most extravagant thing you have bought?

I bought a Parmigiani watch for US $30,000 six years ago. I have 80 watches now.

Q: What's your retirement plan?

I do not plan to retire. What I hope is to have good health and to be able to work in a different place every two to three months. I'm happy to do what I'm doing... developing brands and I don't wish to stop. My wife and I spend about US $30,000 a month.

Q: Home is now...

A three-bedroom 300 sq m condo in Neuchatel, Switzerland which I bought for US $1.5 million five years ago. The value would have risen by about10 per cent since.

Q: I drive...

A four-wheel drive, a black Volkswagen Touareg.

Best long-term investment

My father advised me that the best long-term investments are in brick and mortar. The value of property goes up slowly but it always trends upwards due to limited space and increasing populations. In the short term, it may not be the best investment.

Respect for others

My father was both a saver and a spender. He taught me that money is important but not the most important thing in life. I learnt not to judge people in terms of monetary value from my parents. Respect people for what they are and not what they have.

WORST AND BEST BETS

Q: My worst investment to date...

In1994, I created a watch firm which made watches for an external brand.I had to close the business in 2005 when the principal failed to renew its licence with us. I invested US $4 million in that firm and lost all of it.

I learnt that to succeed in investments, I need to be in control. In this case, I had no control over the licence.I could make the money again, so losing US $4 million was not so bad.What hurt me was letting go of the team in my firm which helped create the watches.

Q: My best investment to date...

It is my house in St Tropez. I bought it 20 years ago at US $800,000 and it is now worth between US $5 million and US $6 million. The house is divided into two units, on the land area of 6,000 sq m. The kids use one unit and my wife and I, the other. We use the house several times a year.

BY Lorna Tan, Senior Correspondent
The Straits Times, 27 Dec 2009