RE: RM Auctions London sale round-up
Thursday 12th September 2013
Though the Frankfurt show has rightly dominated the PH news this week, there was an event closer to home that warranted our attention; RM Auctions London sale.
If we had a spare £1.2m...The highlight of the auction was Lord Laidlaw's collection of historic racers. We've featured his wonderful 904/6 recently, but the other half dozen in the collection weren't too shabby either. With the Porsche, two Chevrons (a B19 and a B16), a pair of Maseratis (a Tipo 61 Birdcage and a 250S Fantuzzi), a works Jaguar D-Type and a Ferrari 275GTB/C Competizione were open to bids. With their lowest estimates, the seven were expected to make more than £14 million before the auction fees.
Seller says it's rust-free apparentlyAnd moreover, the auction featured plenty of interesting cars away from the obvious attractions. A beautiful Ferrari 456M GT manual sold for £50,400, no doubt thanks to its paltry 6,000km. Following an eight-year resto in the 2000s, a Porsche 911 2.7 RS Touring went for bang on estimate at £319,200. And a fantastic Lotus Elan 26R racer, complete with a second engine and some spare wheels, somehow went for £40,000 under its guide price at £112,000.
RM Auctions London sale round-up
With the dust settling on Frankfurt time to catch up on what else has been going on
If we had a spare £1.2m...
Unfortunately, just four cars from the collection sold. The D-Type (estimate £5.5m-£6.5m) failed to meet its reserve at £4m, as did the 275 Competizione at £2.1m (estimate £2.5m-£3.5m). With a guide price of between £2.25m-£2.75m, the Birdcage also remained unsold with a final bid of £1.6m.
The Porsche sold for £1.2m and the 250S £2.1m. The Chevrons made £268,800 (B16) and £173,600 (B19). So £14 million became three and a half, but a great spectacle nonetheless.
Seller says it's rust-free apparently
Speaking of Lotus, there was some considerable fanfare around another Hethel-produced lot; PPW306R, the Esprit S1 from The Spy Who Loved Me. The price for a one-off piece of cinema history? £616,000.
And the oddballs? This has to take it; a non-running 1976 Jaguar XJ12 Drophead Coupe. A snip at £3,650.
For full results on the auction, and to prevent us wittering on all day about the cars, see RM Auctions results page. And get saving for Hershey in October...
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Pictures: RM Auctions
Discussion
Potentially very interesting results.
Classic cars have been rocketing in value as both black money and legitimate cash has needed to be converted into physical assets. This has taken the shape of mostly either London or NY prime property, fine art and cars. It is a bubble, as all asset class spirals are, have always been and always will be.
Now, at the same time, assets such as cars and fine art have another value and that is their transportability but also the new debt services which have grown up around these assets since 2006.
In essence, a perfect way for someone to have plenty of cash in one country but hold assets and income in offshore jurisdictions is to borrow against one of these assets. The cash then can come into the UK or US as debt and not appear on any taxable radar. It goes without saying that this exact same tax avoidance mechanism can also be used to launder money.
However, as mentioned, all bubble burst so the question has long been what will be the trigger for this one? The answer is obviously a stabilising global economy leading to a failed auction of primary classics. That, in turn, leads to a softening of book values at the lenders as they start to get jittery and then that leads to an increase in supply as lenders and borrowers seek to convert the asset to cash. Finally, the rout begins.
We have a stabilising global economy. The US is slowing its money printing, as is the UK. Other less risky quoted assets are already starting to offer superior R/R factors in comparison to art and cars. The big money landscape is shifting. Very slowly but at the same time it's strong.
In short, the macro economic reasons for cash being moved legitimately or illigitimately into transportable, collateralising assets has almost gone.
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
This particular event does seem a little early to me as I would put my money on the rout triggering failed auction to appear once US rate rises are underway and the value of cash is increasing in a strong upward trend. But I do think we are looking at this occuring within 36 months and will look back to an auction like this and see it is one of the tremors.
Classic cars have been rocketing in value as both black money and legitimate cash has needed to be converted into physical assets. This has taken the shape of mostly either London or NY prime property, fine art and cars. It is a bubble, as all asset class spirals are, have always been and always will be.
Now, at the same time, assets such as cars and fine art have another value and that is their transportability but also the new debt services which have grown up around these assets since 2006.
In essence, a perfect way for someone to have plenty of cash in one country but hold assets and income in offshore jurisdictions is to borrow against one of these assets. The cash then can come into the UK or US as debt and not appear on any taxable radar. It goes without saying that this exact same tax avoidance mechanism can also be used to launder money.
However, as mentioned, all bubble burst so the question has long been what will be the trigger for this one? The answer is obviously a stabilising global economy leading to a failed auction of primary classics. That, in turn, leads to a softening of book values at the lenders as they start to get jittery and then that leads to an increase in supply as lenders and borrowers seek to convert the asset to cash. Finally, the rout begins.
We have a stabilising global economy. The US is slowing its money printing, as is the UK. Other less risky quoted assets are already starting to offer superior R/R factors in comparison to art and cars. The big money landscape is shifting. Very slowly but at the same time it's strong.
In short, the macro economic reasons for cash being moved legitimately or illigitimately into transportable, collateralising assets has almost gone.
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
This particular event does seem a little early to me as I would put my money on the rout triggering failed auction to appear once US rate rises are underway and the value of cash is increasing in a strong upward trend. But I do think we are looking at this occuring within 36 months and will look back to an auction like this and see it is one of the tremors.
Interestingly, the LTVs on the prime cars has been coming down from around 75% at the start of the year and the lesser firms are begining to pull offers on more conventional classics, so the market does seem to be tightening up its risk control.
Like with all of these scemes designed for the super rich they get modded and diluted by other firms to sell to the modestly rich. Interestingly, you can spot which cars have been targetted by these lesser schemes from just looking at the price action in the lower sectors. Ever wondered why E'Types have outperformed other classics of a similar class quite impressively?
Like with all of these scemes designed for the super rich they get modded and diluted by other firms to sell to the modestly rich. Interestingly, you can spot which cars have been targetted by these lesser schemes from just looking at the price action in the lower sectors. Ever wondered why E'Types have outperformed other classics of a similar class quite impressively?
Agent Orange said:
That 1976 Jaguar XJ12 Drophead Coupe. Yummy and surely a complete bargain at that price even if a non-runner.
I know nothing of the DHC but surely if they were performed by Lynx that's a quality conversion and a decent future investment?
I was thinking the same thing - rid it of that horrid body-kit, get it running and that's surely only going to climb in value.I know nothing of the DHC but surely if they were performed by Lynx that's a quality conversion and a decent future investment?
DoctorX said:
Esprit Turbo? S1, surely?
Interesing write up on that Bond Esprit on the RM Website:http://www.rmauctions.com/lots/lot.cfm?lot_id=1061...
Mastiff said:
Interesing write up on that Bond Esprit on the RM Website:
http://www.rmauctions.com/lots/lot.cfm?lot_id=1061...
Indeed it is, thanks for that.http://www.rmauctions.com/lots/lot.cfm?lot_id=1061...
The other catalyst for the sell off will also be the 'fakes' that are in the market. Owners know what they have but through the boom buyers have been happy to buy them but once the market softens then these cars will specifically plummet. And then the law suits will appear as people claim they had no idea it wasn't 100% original.
Interesting that the D-Type failed to sell. A couple of years ago investment funds were being set up to hoover up just that sort of car, hang on to it and then sell for a profit at a later date. Charlie Lucas of marque experts CKL Developments pinned an estimate of 5.5 - 7.5 million on it.
If nothing else, the relatively low final bid, may put these investor types off once and for all!
What will Lord Irvine do with it and his other non-sellers now? Ship them to America and try again or go for brokered private sales? Or just stick 'em up in Pistonheads classifieds?
If nothing else, the relatively low final bid, may put these investor types off once and for all!
What will Lord Irvine do with it and his other non-sellers now? Ship them to America and try again or go for brokered private sales? Or just stick 'em up in Pistonheads classifieds?
DonkeyApple said:
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
Except that it comes on the back of two very evident and significant recent sales - Nart Spider and Fangio 196 - which smashed all expectations. Whether those will come to represent the peak of the market, or whether this D-Type no-sale is just a small blip, only time will tell!moskvich427 said:
Agent Orange said:
That 1976 Jaguar XJ12 Drophead Coupe. Yummy and surely a complete bargain at that price even if a non-runner.
I know nothing of the DHC but surely if they were performed by Lynx that's a quality conversion and a decent future investment?
I was thinking the same thing - rid it of that horrid body-kit, get it running and that's surely only going to climb in value.I know nothing of the DHC but surely if they were performed by Lynx that's a quality conversion and a decent future investment?
I think it had to be described as a non-runner as the owner could not start it at the auction but it had run recently - could well be an absolute bargain if a simple fix!
I know it is a V12 but it is possible
As precisely as Donkey put it I can only agree. A re-calibration of the classic car market is going to happen and I believe it will in the next 2 years. So before you buy think about the consequences. It will be almost as bad as buying a new car but not quite. We are on the cusp of major technology advances in motoring and many new cars today will be obsolete in 10 years time, that's apart from the already built mass market cars.
DonkeyApple said:
Potentially very interesting results.
Classic cars have been rocketing in value as both black money and legitimate cash has needed to be converted into physical assets. This has taken the shape of mostly either London or NY prime property, fine art and cars. It is a bubble, as all asset class spirals are, have always been and always will be.
Now, at the same time, assets such as cars and fine art have another value and that is their transportability but also the new debt services which have grown up around these assets since 2006.
In essence, a perfect way for someone to have plenty of cash in one country but hold assets and income in offshore jurisdictions is to borrow against one of these assets. The cash then can come into the UK or US as debt and not appear on any taxable radar. It goes without saying that this exact same tax avoidance mechanism can also be used to launder money.
However, as mentioned, all bubble burst so the question has long been what will be the trigger for this one? The answer is obviously a stabilising global economy leading to a failed auction of primary classics. That, in turn, leads to a softening of book values at the lenders as they start to get jittery and then that leads to an increase in supply as lenders and borrowers seek to convert the asset to cash. Finally, the rout begins.
We have a stabilising global economy. The US is slowing its money printing, as is the UK. Other less risky quoted assets are already starting to offer superior R/R factors in comparison to art and cars. The big money landscape is shifting. Very slowly but at the same time it's strong.
In short, the macro economic reasons for cash being moved legitimately or illigitimately into transportable, collateralising assets has almost gone.
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
This particular event does seem a little early to me as I would put my money on the rout triggering failed auction to appear once US rate rises are underway and the value of cash is increasing in a strong upward trend. But I do think we are looking at this occuring within 36 months and will look back to an auction like this and see it is one of the tremors.
I've never viewed it like that, a very interesting post.Classic cars have been rocketing in value as both black money and legitimate cash has needed to be converted into physical assets. This has taken the shape of mostly either London or NY prime property, fine art and cars. It is a bubble, as all asset class spirals are, have always been and always will be.
Now, at the same time, assets such as cars and fine art have another value and that is their transportability but also the new debt services which have grown up around these assets since 2006.
In essence, a perfect way for someone to have plenty of cash in one country but hold assets and income in offshore jurisdictions is to borrow against one of these assets. The cash then can come into the UK or US as debt and not appear on any taxable radar. It goes without saying that this exact same tax avoidance mechanism can also be used to launder money.
However, as mentioned, all bubble burst so the question has long been what will be the trigger for this one? The answer is obviously a stabilising global economy leading to a failed auction of primary classics. That, in turn, leads to a softening of book values at the lenders as they start to get jittery and then that leads to an increase in supply as lenders and borrowers seek to convert the asset to cash. Finally, the rout begins.
We have a stabilising global economy. The US is slowing its money printing, as is the UK. Other less risky quoted assets are already starting to offer superior R/R factors in comparison to art and cars. The big money landscape is shifting. Very slowly but at the same time it's strong.
In short, the macro economic reasons for cash being moved legitimately or illigitimately into transportable, collateralising assets has almost gone.
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
This particular event does seem a little early to me as I would put my money on the rout triggering failed auction to appear once US rate rises are underway and the value of cash is increasing in a strong upward trend. But I do think we are looking at this occuring within 36 months and will look back to an auction like this and see it is one of the tremors.
will_ said:
DonkeyApple said:
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
Except that it comes on the back of two very evident and significant recent sales - Nart Spider and Fangio 196 - which smashed all expectations. Whether those will come to represent the peak of the market, or whether this D-Type no-sale is just a small blip, only time will tell!If the classic car market could be shorted then I would be taking positions with a 3 year horizon. USD and GBP are both going to become more valuable going forward, the EU laundering is easing, the crack down on tax avoidance will be slipping away as it loses media attention and lower risk assets are looking more appealing. There is so much stock held solely for capital gains and inflation protection that just a fraction of this being released will start softenings and even sell-offs in specific fields and if you start getting the forced debt sales and accusations of fraud (let's not forget the classic car industry is absolutely riddled with fraud hence why 'provenance' is so craved) then it will be a rout.
The one price on a car which sold that I find incredible is the Isetta bubble car - how something that small can be worth over £30k I am not sure. I love them and have always wanted one but not sure I could ever pay that for one no matter how much money I had. The D-Type and the Bentley 4 1/2 Litre, on the other hand 
DonkeyApple said:
will_ said:
DonkeyApple said:
For me personally, I would lodge the failure to sell a D-Type amongst some other prime assets as a very potential red flag to a sell off. I would monitor the next prime auction and follow very closely the price action as some big misses at a Bonhams or Coys type event could precipitate the de-collaterising of these assets and flood the market with supply with the obvious consequences.
Except that it comes on the back of two very evident and significant recent sales - Nart Spider and Fangio 196 - which smashed all expectations. Whether those will come to represent the peak of the market, or whether this D-Type no-sale is just a small blip, only time will tell!If the classic car market could be shorted then I would be taking positions with a 3 year horizon. USD and GBP are both going to become more valuable going forward, the EU laundering is easing, the crack down on tax avoidance will be slipping away as it loses media attention and lower risk assets are looking more appealing. There is so much stock held solely for capital gains and inflation protection that just a fraction of this being released will start softenings and even sell-offs in specific fields and if you start getting the forced debt sales and accusations of fraud (let's not forget the classic car industry is absolutely riddled with fraud hence why 'provenance' is so craved) then it will be a rout.
The Birkin Bentley also made £5.5m last year so there is clearly some demand at the top end for British cars (although I believe that it and the Fangio Mercedes went to European buyers).
It will be very interesting to see where it goes from here. I'm not sure I agree with the views expressed elsewhere on here that the current surge in prices isn't speculator and debt encouraged, if not lead.
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