The wedding’s in five weeks. How rotten that Pippa’s fiance has had to swallow a £370k pay cut
N o MAN wants to take a pay cut at the best of times. Particularly not when he is on the brink of marrying the woman of his dreams. And definitely not when she comes with a high-maintenance wardrobe and a penchant for travelling by private jet.
But a dramatically shrunken payslip is the painful indignity suffered by James Matthews, better known as Mr Pippa Middleton-to-be. He’s frequently billed as a financial whizzkid who makes millions as a hedge fund manager. Yet James, who became engaged to Her Royal Hotness last year, has been feeling the pinch.
He has been forced to slash his own earnings by a wince-making sum of almost £370,000 after profits fell at his hedge fund firm. It left him with just under £200,000 in his annual pay packet.
Now that might be a lot to most of us, but to the billionaire financiers who infest London’s Mayfair, where his office is situated, it’s just lunch money.
And for poor old James, it’s unlikely to have been enough even to pay for the astounding Art Deco style engagement ring he presented to Pippa, 33, last year.
The multi-faceted diamond knuckleduster is reputed to have cost around a quarter of a million, which would have left him about fifty grand short.
But perhaps a pay cut was inevitable sooner or later, given that the hedge fund he launched in 2001 lost £80,000 in 2015 when a Cayman Islands bank where it had deposited money went into liquidation after being accused by the U.S. authorities of being involved in a share scam.
Then there’s the £20 million it lost on a Hollywood film fund that went under in 2014.
So perhaps it’s not so surprising that the firm’s profits fell in 2015, the most recent year for which figures are available, and James’s annual share of profits from the partnership plunged to just over £190,500 from just under £560,000 the previous year.
And apart from the woes at his hedge fund firm, James has also been running up multi-million-pound losses on lodgings at his family’s grand Scottish estate.
How fortunate for James and his brideto-be that he still has plenty of family money to fall back on. As, indeed, does she.
James hails from entrepreneurial parentage. His 72-year-old dad David is a huge money-maker. Mr Matthews Senior began as a car mechanic in Rotherham, South Yorkshire, and made a fortune in the motor trade. He owns the exclusive Eden Rock hotel on the Caribbean island of St Barts with his second wife Jane.
But has James really inherited dad’s Midas gene? or does his public profile mean he is considered more successful than he really is? on that, the jury must remain out.
Pippa’s beau is often portrayed as being an enormously successful financier at the relatively young age of 41. In truth, though, he is nowhere near the City big league.
observers say that he’s unlikely to trouble the pages of the Financial Times or the Wall Street Journal with his business coups, however often he might grace the gossip columns. To his credit, though, James has not opted for a life of idle lounge lizardry. He has certainly pursued a more industrious route than his rascally younger brother Spencer, one of the stars of reality TV show Made In Chelsea.
Spencer is a self- proclaimed Casanova who admits to a trail of drug-fuelled debauchery and says that he has bedded more than 1,000 women.
James wants to be a serious businessman. He skipped university after leaving £34,000-ayear Uppingham public school and rejected a promising career as a racing driver to try his luck in the City.
He first worked as a trader at the firm of Spear, Leeds & Kellogg, which was later taken over by Goldman Sachs, and then spent three years at an outfit called Nordic options.
Aged just 26, he set up Eden Rock Capital Management — named after Mum and Dad’s hotel — in partnership with another socially well- connected financier, Ed Horner. His hedge funds at first seemed to be a great success and by 2007 were reported to have assets of more than £1 billion.
But things were difficult during the financial crisis the following year and, so far, the firm doesn’t seem to have fully recovered.
Its profits fell by around £31,000 to £1.55 million in 2015, the latest figures published. And there have beenbe other misadventures. TheseTh include losses of £80,000 incurredin because a large sum of money was placed with an obscureob finance house called CaledonianCa Bank, via a British Vi Virgin Islands subsidiary.
Caledonian, which was based in the well-known tax haven of the Cayman Islands, went into liquidationliq after being accused of making illegal profits on sharessha by U.S. regulators.
ThereT is no question of wrongdoingwro on James’s part in thisthi incident. Indeed, his firm waswa among the victims.
EdenE Rock Capital has min minimal tax bills, with a cor corporate charge of just under £2,500£2,5 in 2015, an effective rate of lessle than 1 per cent.
Fr Friends say this is because it is a partnership,pa so Matthews and his fellow partners pay income tax personally in the UK on their earningsearn from it.
Ja James has some interests offshoreshor including a shareholding in a company called Northstar Financial Services, based in the tax haven of Bermuda.
But sources say ‘definitively’ that he is domiciled for tax purposes in the UK and he pays all his personal taxes here.
That aside, the red ink on Caledonian is likely to be dwarfed by losses of up to £20 million due to Eden Rock’s ill-fated backing of a Hollywood film finance fund.
The fund lent money to make movies including The Edge of Love about drunken poet Dylan Thomas, starring Keira Knightley.
It went bust when borrowers failed to repay. Claims made in a New York bankruptcy court reveal Eden Rock’s fund had loaned £20 million, but whether James will get any of the money back is open to doubt.
In any case, he is no longer trying to become a Mr Big in the hedge fund business, but is investing in start-ups instead.
These include a company that makes sensors for shrimp farmers to detect how salty the water is, a racehorse data business and a fast food operation in London’s trendy Shoreditch.
He is also trying to cash in on the back of his parents’ hotel, and has recently launched a new luxury ‘ lifestyle brand’ called Eden Being.
It sells high- end fashion, homeware and watches at luxury hotels including his parents’ Caribbean retreat. Rather more prosaically, he is a director of the Sheffield Business Park, a home to small northern firms.
Whether these ventures will prove lucrative in the long run, only time will tell. But the company that runs lodgings on his family’s 10,000-acre Scottish estate ran up losses of more than £1.7 million in 2014 and nearly £2.3 million the following year.
This is despite charging large sums to rent out the magnificent Victorian hunting lodge, which provided the backdrop for an advert for Haig Club whisky starring David Beckham. James is the sole director of Beaufort Glen
He’s lost millions on lodgings at his family’s estate James is trying to cash in on his parents’ hotel
Affric, the company that manages the lodgings in Inverness-shire.
This firm is ultimately owned by a parent operation based in the tax haven of the Seychelles. Sources claim these losses are ‘neither here nor there’ as the Matthews family didn’t buy the estate to squeeze out maximum profits from it.
Indeed, one non-monetary benefit is that it puts James in line to inherit the title of Laird, at which point Pippa will become Lady Glen Affric. What a testament to the upward social mobility of each of their families.
Regardless of her fiance’s chequered fortunes, there is no prospect of hardship on the horizon for Pippa, thanks to the older generation of Middletons and Matthews.
Father-in-law David made enough from his car dealership empire to raise James and Spencer in Caunton Manor, a sprawling 18thcentury house in Lincolnshire.
A third son, Mike, tragically died in a climbing accident, and the boys have a halfsister, Nina, by David’s first wife.
At the age of 52, in 1995, David and Jane bought Eden Rock hotel, then in a state of dereliction. Having restored it to its former glories, they charge celebrity clientele £25,000 a night for a top-priced suite.
And notwithstanding glitches in his business, James has done very well out of the London property market. He has traded his way up to a townhouse on one of the swankiest streets in Chelsea, bought for £17 million in the spring of 2014 with a mortgage from HSBC Private Bank.
The property boasts a private cinema, lift, sunken courtyard and basement car stacker to maximise the number of vehicles that can be parked in the garage.
There was discontent among some of the neighbours when he submitted proposals for a large bathroom extension including his-and-hers vanity basins and two dressing rooms — possibly to accommodate Pippa’s collection of figure-hugging clothes. The plans were approved regardless.
James is said to be ‘straight as a die’ in his business dealings, though he may not have inherited his father’s flair for commerce.
And while her fiancé has had his ups and downs, business has not been plain sailing for the other James in Pippa’s life, her 29year-old brother. Setting aside his own mishaps, James Matthews found a spare £100,000 to bail out James Middleton’s personalised marshmallow business.
Young Mr Middleton has run up losses of more than £1 million in 2015 in his company Boomf, which sells boxes of the squashy sweets at £15 for nine — that’s £1.66 each.
PIPPA’S business, PXM Enterprises, set up for her income from books and magazine columns, has also gone down. Its assets shrank to just under £51,000 in 2015 from £115,000 the previous year.
What a contrast the siblings are with mum Carole’s online company Party Pieces, which has just celebrated its 30th anniversary.
Doubts have been raised as to whether this firm can really fully fund the Middleton family’s well-heeled lifestyle — and these can’t be resolved, as its finances are shrouded in secrecy.
But former air hostess Carole, 61, has transcended her humble upbringing in a council flat to build a successful business. City experts think that thanks to its royal connections, it could be worth tens of millions were she ever to sell up.
At the wedding, both clans will be able to reflect with pride on how far they have come, financially and socially.
As a Yorkshireman, though, David Matthews is probably familiar with the expression ‘clogs to clogs’. It describes the way families rise from rags to riches, only to lurch back again because younger generations lack the drive and brains of their forebears.
Thanks to her father-in-law’s hard work and her mother’s ambition, Pippa need not fear downward mobility. And if James does not turn out to be the next Rockefeller, so what?