Classic Cars Attracting New Investors
The classic car market has expanded beyond collectors and now includes investors enticed by high returns and a lack of correlation with traditional portfolio assets like stocks and bonds.
World's First "Evergreen" Vintage Car Fund
An Italian asset manager, Azimut is launching the world's first-ever "evergreen" fund to invest in vintage vehicles, targeting cars worth more than 1 million euros each. The fund will focus on vehicles with unique histories.
Hetica Capital's Bold Closed-End Fund
In 2021, Swiss asset manager Hetica Capital launched a 50 million euro closed-end fund, aiming to generate returns of 9%-15% after seven years. The fund plans to acquire 30-35 cars by the fifth year before selling the vehicles and paying investors.
Challenges for Classic Car Funds
Setting up successful funds in the classic car sector has proven difficult, with high barriers to entry and potential financial risks due to the cost of replacement parts and maintenance.
Maintaining Vintage Car Collections
Keeping classic car collections running can be expensive, with annual costs like storage and insurance amounting to 5-6% of the portfolio's value. Finding skilled mechanics for these vehicles is becoming increasingly difficult.
Classic Car Market Expansion
The classic car market is growing alongside the rising number of wealthy individuals. In 2022, the value of vintage cars increased by 25%, their strongest performance in nine years, and second only to art's 29% increase.
Global Interest in Classic Cars
Although North America remains the largest auction market, there has been a surge in classic car buyers from the Middle East, India, and China in recent years.
Combustion Engine Cars as Future Cult Objects
As the world moves towards electric vehicles, combustion engine cars may become cult objects, increasing interest in classic car investments.
Ferraris Dominate the Vintage Auto Market
Ferraris are considered the blue-chip investment in the classic car sector, with the highest average value at auction, followed by Mercedes-Benz and Porsche vehicles. The classic car community has evolved to include both experts and casual enthusiasts.