Friday, February 18, 2011

Alternatives in Investment - Iconic Car Fund - Pink Floyd's Nick Mason is fund spokesman

Classic-car sales are on the rise (National Post)

David Grainger, National Post · Friday, Feb. 18, 2011
A few of weeks ago, I wrote regarding the profit potential that can be reached by savvy investors who purchase good quality collector cars. Since then, there have been several events that have proven the point.
The first was an announcement by the IGA Management Fund in the U.K. that it was creating a new fund called the Iconic Car Fund. This new fund has Nick Mason of Pink Floyd fame as its spokesman.
Mason has long been a car enthusiast and amateur race driver. The fund plans on using up to $150-million to purchase high-quality, important cars around the world and then re-sell them at an appropriate time. It is being touted as a car fund for people who don't like or know anything about cars. The hook is a forecasted 15% return. You can get in for an initial investment of around $500,000. I guess a 15% return is pretty good in the investment world these days, but I wouldn't be happy with it. Here's why:
Five years ago, a fully restored Mercedes Gullwing Coupe with Rudge wheels and a good history could sell for as much as $600,000. Many sold for considerably less. A few years ago, when I was locating one for Conrad Black to replace a Gullwing he had regretfully sold, I found one -- an original silver car with red interior exactly to his order in the U.S. Midwest for $310,000. That was cheap even then. Still, it was not cheap enough for Lord Black and he passed.
He should have bought it.

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