Nick Mason Car investment fund
Discussion
http://www.igafunds.com
http://www.carsthatmatter.com/indexes/#1
Bloomberg:
Pink Floyd drummer Nick Mason is helping an investment group that aims to buy $150 million worth of classic cars and make annual returns of 15 percent.
Mason is an auto enthusiast who has competed five times in the Le Mans 24 Hours race. He is on the advisory board of IGA Automobile LP, which plans to buy the finest models by top marques of the type he collects. Mason’s garage houses cars by Aston Martin, Bentley, Bugatti, Jaguar, Ferrari, such as a 250 GTO, and Porsches including the 962.
“This is the first classic-car fund that’s purely for financial returns, rather than passion,” said Nick Lancaster, a director of the Guernsey-registered fund that began canvassing investors on Jan. 2. “We’re looking for a straightforward in- and-out return on our assets.”
Exceptional sports cars are making record prices, encouraging wealthy individuals to buy or sell physical objects while they assess the performance of financial markets, said dealers. Still, some are watching to see if a car fund can avoid the pitfalls of other investment groups such as those that invest in art, wine and whisky, not all of which have succeeded.
The Hagerty’s Cars That Matter “Blue Chip” Index, based on the values of the 25 most collectable postwar vehicles, has increased 67 percent from September 2006 to the end of 2010, according to the index’s compiler, auto appraiser David Kinney of Great Falls, Virginia. Over the same period, the Standard & Poor’s 500 Index fell 5.9 percent.
Selective Buyers
IGA enters the market at a time when buyers of collectors’ vehicles have become more selective. The Historic Automobile Group International (HAGI) Top 50 index of exceptional classic- car prices was up 6.6 percent in 2010, lower than its average annual growth of more than 12 percent from 2003 to 2008.
“This is an indicator that the market for rare cars has cooled off somewhat after a decade of sustained growth,” Dietrich Hatlapa, founder and managing director of the London- based research company said in an e-mail.
The IGA fund, chaired by the U.K.-based classic car collector and racer Ray Bellm, will be a closed-end partnership planned for seven years from the first closing date, set for March or April.
Investors will be asked for a minimum commitment of $500,000, Lancaster, a former chief executive of the auto dealers H.R. Owen Plc, said in an interview.
During a three-year investment period, the fund will aim to acquire a collection of between 20 and 40 trophy marque vehicles with distinguished race or ownership histories.
McLaren, Ferrari
The Ferrari 250 GTO, Aston Martin DB4 Zagato, Ford GT40, McLaren F1, Shelby Daytona Coupe and Porsche 917 are among the models identified in IGA’s promotional brochure as potential “acquisition targets.”
Last year, a Ferrari GTO -- one of only 36 produced -- sold privately for $26 million, double the 1960s Le Mans racer’s price in 2005, IGA said.
“We feel confident about this subsection because of its rarity value,” Lancaster said. “We’re looking for iconic cars with low series production that have been prepared for competition. These are in private collections and rarely come up for sale.”
Nonetheless, IGA acknowledges that the market for classic cars can disappoint. Bellm included a Ford GT40 from his collection in Bonhams’s auction at the Goodwood Festival of Speed in July last year. The car, of the same type that won the Le Mans for four straight years in the 1960s, failed to sell at the auction against an estimate of 900,000 pounds to 1.1 million pounds.
Risk Warning
“An investment in the fund involves a high degree of risk,” the IGA prospectus said, “and is suitable only for those investors of substantial means who have no immediate need for liquidity of the amount invested, and who can afford a risk of loss of all or a substantial part of their investment.”
IGA has a management structure of 11 named members, including the collectors Bellm and Mason. Cars will be bought by a group of unnamed experts through a mix of private and auction transactions, Lancaster said.
The cars will be regularly displayed, though not raced, at events such as the Pebble Beach Concours d’Elegance and the Grand Prix de Monaco Historique. IGA also plans to display the collection in Asia.
“Though China and India aren’t big players in the classic car sales at the moment, we see these markets opening up during the life of the fund,” Lancaster said.
Management Fees
Participants will be charged a placement fee of as much as 3 percent on their investment, plus annual management fees of as much as 1.5 percent based on aggregate commitments during the investment period and on the collection’s net asset value for the remainder of the duration.
The fund has a minimum target amount of $50 million, according to IGA’s prospectus, dated Dec. 8, 2010. So far, IGA has secured verbal commitments of about $15 million from potential investors, Lancaster said.
The fund is not aimed at U.S. investors.
“At IGA when initially establishing the fund,” Lancaster said, “a decision was made that the potential cost and regulatory issues for both covering the SEC and tax authorities would be far too great for the new fund, especially as we are trying to establish a new asset class as a financial investment.”
U.S. Future
IGA intends to offer a similar product to U.S. citizens in the future, possibly by the creation of a separate fund.
“There’s an awful lot of money out there,” said John Collins of the Ascot, U.K., dealership Talacrest, which this month sold a 1963 Ferrari 330 LMB for $8.5 million to a European buyer.
“It could be difficult for a fund if there are a lot of people involved,” Collins said in an interview. “Car traders are a bit like art dealers. If they see a great profit in something, they’re not going to want to pass it on to the investors.”
Collins is currently courting investors for his own fund, devoted solely to the “best of the best” Ferraris. It has a target capitalization of 100 million pounds and will be formally announced within the next two months.
“I’m giving up dealing as soon as I start buying for the fund,” Collins said. “It’s too much of a conflict of interest.”
IGA information for investors (not accessible from U.S. servers): http://www.igafunds.com
http://www.bloomberg.com/news/2011-01-19/pink-floy...
http://www.carsthatmatter.com/indexes/#1
Bloomberg:
Pink Floyd drummer Nick Mason is helping an investment group that aims to buy $150 million worth of classic cars and make annual returns of 15 percent.
Mason is an auto enthusiast who has competed five times in the Le Mans 24 Hours race. He is on the advisory board of IGA Automobile LP, which plans to buy the finest models by top marques of the type he collects. Mason’s garage houses cars by Aston Martin, Bentley, Bugatti, Jaguar, Ferrari, such as a 250 GTO, and Porsches including the 962.
“This is the first classic-car fund that’s purely for financial returns, rather than passion,” said Nick Lancaster, a director of the Guernsey-registered fund that began canvassing investors on Jan. 2. “We’re looking for a straightforward in- and-out return on our assets.”
Exceptional sports cars are making record prices, encouraging wealthy individuals to buy or sell physical objects while they assess the performance of financial markets, said dealers. Still, some are watching to see if a car fund can avoid the pitfalls of other investment groups such as those that invest in art, wine and whisky, not all of which have succeeded.
The Hagerty’s Cars That Matter “Blue Chip” Index, based on the values of the 25 most collectable postwar vehicles, has increased 67 percent from September 2006 to the end of 2010, according to the index’s compiler, auto appraiser David Kinney of Great Falls, Virginia. Over the same period, the Standard & Poor’s 500 Index fell 5.9 percent.
Selective Buyers
IGA enters the market at a time when buyers of collectors’ vehicles have become more selective. The Historic Automobile Group International (HAGI) Top 50 index of exceptional classic- car prices was up 6.6 percent in 2010, lower than its average annual growth of more than 12 percent from 2003 to 2008.
“This is an indicator that the market for rare cars has cooled off somewhat after a decade of sustained growth,” Dietrich Hatlapa, founder and managing director of the London- based research company said in an e-mail.
The IGA fund, chaired by the U.K.-based classic car collector and racer Ray Bellm, will be a closed-end partnership planned for seven years from the first closing date, set for March or April.
Investors will be asked for a minimum commitment of $500,000, Lancaster, a former chief executive of the auto dealers H.R. Owen Plc, said in an interview.
During a three-year investment period, the fund will aim to acquire a collection of between 20 and 40 trophy marque vehicles with distinguished race or ownership histories.
McLaren, Ferrari
The Ferrari 250 GTO, Aston Martin DB4 Zagato, Ford GT40, McLaren F1, Shelby Daytona Coupe and Porsche 917 are among the models identified in IGA’s promotional brochure as potential “acquisition targets.”
Last year, a Ferrari GTO -- one of only 36 produced -- sold privately for $26 million, double the 1960s Le Mans racer’s price in 2005, IGA said.
“We feel confident about this subsection because of its rarity value,” Lancaster said. “We’re looking for iconic cars with low series production that have been prepared for competition. These are in private collections and rarely come up for sale.”
Nonetheless, IGA acknowledges that the market for classic cars can disappoint. Bellm included a Ford GT40 from his collection in Bonhams’s auction at the Goodwood Festival of Speed in July last year. The car, of the same type that won the Le Mans for four straight years in the 1960s, failed to sell at the auction against an estimate of 900,000 pounds to 1.1 million pounds.
Risk Warning
“An investment in the fund involves a high degree of risk,” the IGA prospectus said, “and is suitable only for those investors of substantial means who have no immediate need for liquidity of the amount invested, and who can afford a risk of loss of all or a substantial part of their investment.”
IGA has a management structure of 11 named members, including the collectors Bellm and Mason. Cars will be bought by a group of unnamed experts through a mix of private and auction transactions, Lancaster said.
The cars will be regularly displayed, though not raced, at events such as the Pebble Beach Concours d’Elegance and the Grand Prix de Monaco Historique. IGA also plans to display the collection in Asia.
“Though China and India aren’t big players in the classic car sales at the moment, we see these markets opening up during the life of the fund,” Lancaster said.
Management Fees
Participants will be charged a placement fee of as much as 3 percent on their investment, plus annual management fees of as much as 1.5 percent based on aggregate commitments during the investment period and on the collection’s net asset value for the remainder of the duration.
The fund has a minimum target amount of $50 million, according to IGA’s prospectus, dated Dec. 8, 2010. So far, IGA has secured verbal commitments of about $15 million from potential investors, Lancaster said.
The fund is not aimed at U.S. investors.
“At IGA when initially establishing the fund,” Lancaster said, “a decision was made that the potential cost and regulatory issues for both covering the SEC and tax authorities would be far too great for the new fund, especially as we are trying to establish a new asset class as a financial investment.”
U.S. Future
IGA intends to offer a similar product to U.S. citizens in the future, possibly by the creation of a separate fund.
“There’s an awful lot of money out there,” said John Collins of the Ascot, U.K., dealership Talacrest, which this month sold a 1963 Ferrari 330 LMB for $8.5 million to a European buyer.
“It could be difficult for a fund if there are a lot of people involved,” Collins said in an interview. “Car traders are a bit like art dealers. If they see a great profit in something, they’re not going to want to pass it on to the investors.”
Collins is currently courting investors for his own fund, devoted solely to the “best of the best” Ferraris. It has a target capitalization of 100 million pounds and will be formally announced within the next two months.
“I’m giving up dealing as soon as I start buying for the fund,” Collins said. “It’s too much of a conflict of interest.”
IGA information for investors (not accessible from U.S. servers): http://www.igafunds.com
http://www.bloomberg.com/news/2011-01-19/pink-floy...
Edited by nsa on Wednesday 19th January 10:11
Alfa numeric said:
article said:
“This is the first classic-car fund that’s purely for financial returns, rather than passion,” said Nick Lancaster
That could possibly be the single most depressing thing I've ever read.Rather a suprise from Nick Mason too.
He's always seemed a genuine enthusiast - I remember parking my Marcos up alongside his GTO once in the petrol station on the Hogs Back and he was happy to chat with all and sundry who expressed interest in the car.
Maybe the money mill that's Pink Floyd's back catalogue is suffering from a down turn in fortunes.
M.
PS on the other hand, I'd love to be getting 15% return on my savings! Pity they don't run to $500,000!
He's always seemed a genuine enthusiast - I remember parking my Marcos up alongside his GTO once in the petrol station on the Hogs Back and he was happy to chat with all and sundry who expressed interest in the car.
Maybe the money mill that's Pink Floyd's back catalogue is suffering from a down turn in fortunes.
M.
PS on the other hand, I'd love to be getting 15% return on my savings! Pity they don't run to $500,000!
Edited by marcosgt on Wednesday 19th January 10:16
My only concern for things like this is the impact it will have on events like the Revival. Half the most valuable cars in the world line up on the grid for the TT, precisely the stuff they want to snap up and show, rather than race. Going outside the TT, can you image if they got hold of certain famous ERAs?
I have no problem with viewing cars as investments and financial tools, an asset is an asset after all, but the appeal in racing cars is that they are racing cars! I think in today's world there is a viable argument that the values of something like DBR1s increase by a grand every time Pete Hardman puts one sideways at Woodcote and the Goldsmiths probably add value to the Project Cars everytime they smash them up and rebuild them because it becomes part of the racing history of the cars. Hell, the damn things are probably more well known now thanks to the Goldsmiths having to rebuilt them than they were for their racing, er...success.
To any of our more specialised dealers out there, can you say whether there was a price spike in 330LMs after Hardman and Pirro (correct me if Im wrong someone, its by memory only) finally won the TT in it?
I have no problem with viewing cars as investments and financial tools, an asset is an asset after all, but the appeal in racing cars is that they are racing cars! I think in today's world there is a viable argument that the values of something like DBR1s increase by a grand every time Pete Hardman puts one sideways at Woodcote and the Goldsmiths probably add value to the Project Cars everytime they smash them up and rebuild them because it becomes part of the racing history of the cars. Hell, the damn things are probably more well known now thanks to the Goldsmiths having to rebuilt them than they were for their racing, er...success.
To any of our more specialised dealers out there, can you say whether there was a price spike in 330LMs after Hardman and Pirro (correct me if Im wrong someone, its by memory only) finally won the TT in it?
What an a
hole, I used to really like Nick Mason.
This sort of thing is inevitable and he may say he's only interested in investing in the top 250 cars but high prices at the top level filter down to more everyday classics.
Cars will become like wine in that complete nobs invest in expensive st with zero intention of ever driking and in this case driving the things.
Great days out like Goodwood, the Monaco historic, classic silverstone will fall very short of what they are today as all the great cars will be locked away in a vault rather then out on track where they belong.
hole, I used to really like Nick Mason. This sort of thing is inevitable and he may say he's only interested in investing in the top 250 cars but high prices at the top level filter down to more everyday classics.
Cars will become like wine in that complete nobs invest in expensive s
t with zero intention of ever driking and in this case driving the things. Great days out like Goodwood, the Monaco historic, classic silverstone will fall very short of what they are today as all the great cars will be locked away in a vault rather then out on track where they belong.
Presuming Ed said:
What an ahole, I used to really like Nick Mason.
This sort of thing is inevitable and he may say he's only interested in investing in the top 250 cars but high prices at the top level filter down to more everyday classics.
Cars will become like wine in that complete nobs invest in expensive st with zero intention of ever driking and in this case driving the things.
Great days out like Goodwood, the Monaco historic, classic silverstone will fall very short of what they are today as all the great cars will be locked away in a vault rather then out on track where they belong.
Calm down dear.hole, I used to really like Nick Mason. This sort of thing is inevitable and he may say he's only interested in investing in the top 250 cars but high prices at the top level filter down to more everyday classics.
Cars will become like wine in that complete nobs invest in expensive s
t with zero intention of ever driking and in this case driving the things. Great days out like Goodwood, the Monaco historic, classic silverstone will fall very short of what they are today as all the great cars will be locked away in a vault rather then out on track where they belong.
I doubt this fund will buy more than a few cars so its not going to have any impact on the historic racing events.
Davey S2 said:
Calm down dear.
I doubt this fund will buy more than a few cars so its not going to have any impact on the historic racing events.
Are you serious. Do you not think other investors will look at a successful investment pot and not want to do something similar themselves. Soon all the investment banks will have a similar product on offer.I doubt this fund will buy more than a few cars so its not going to have any impact on the historic racing events.
Sounds like a wonderful idea and I hope he starts a trend . . . . . . . . . . and it goes the same way that it did in the late 80's early 90's, where a killing was made restoring the cars and then another one once the market bubble had popped and the investment gurus were left with dozens of cars in storage that were worth a fraction of the amount they paid for them!
Does rather make a mockery of Masons previous comments about preferring people thought of him as an odd bod with an old racing car rather than an investment genius.
Does rather make a mockery of Masons previous comments about preferring people thought of him as an odd bod with an old racing car rather than an investment genius.
Presuming Ed said:
Davey S2 said:
Calm down dear.
I doubt this fund will buy more than a few cars so its not going to have any impact on the historic racing events.
Are you serious. Do you not think other investors will look at a successful investment pot and not want to do something similar themselves. Soon all the investment banks will have a similar product on offer.I doubt this fund will buy more than a few cars so its not going to have any impact on the historic racing events.
If its such a brilliant plan why has no one done this before?
I know someone who looked into doing this very thing 2 years ago but it never got off the ground and I doubt this will either.
DJC said:
To any of our more specialised dealers out there, can you say whether there was a price spike in 330LMs after Hardman and Pirro (correct me if Im wrong someone, its by memory only) finally won the TT in it?
Given the tiny number of cars made and numbers sold per year, coupled with the top end of the market increasing in value over the past decade by a silly amount, that this sort blip doesn’t register, although a decent race provenance will almost always increase a cars value (as long as it isn’t offset by larger blips in the cars history)
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