IGA Automobile, Nick Mason, Among Others Plan to Target Classic Cars Purely for Financial Returns

I just read an interesting article in the UK’s “The Telegraph” newspaper regarding a move that IGA Automobile is making in an effort to create what essentially sounds like an investment fund that will be used to purcahse iconic and classic cars purely for investment potential and financial gain.

If I had $150 million I might buy a bunch of 300SLs, and a rare alloy bodied example if I could, like this one on display at the German Car Fest presented by the Mercedes-Benz Club of America's Twin cities Section held each year at Veteran's Memorial Park in Shakopee, MN.

An effort to eventually raise 150 million dollars for the fund is underway, the group is looking for interested investors willing to drop a minimum of $500,000 into the investment fun. According to The Telegraph “The fund will be advised by the designer of the McLaren F1 road car and Nick Mason, the Pink Floyd drummer and car enthusiast.”

How might such collector car speculators do to the collector car hobby? If they’re only looking at the most expensive, iconic cars will it event matter tom ore casual collectors? If the goal is to make money, as is the case with most investment funds… might it be a good move to buy up as money half million dollar Mercedes-Benz 300SL as they can get their hands on, as it looks like those cars might have real appreciation potential?

Here is the complete article from “The Telegraph”: Monday, 7 February 2011, Source: THE TELEGRAPH

Pink Floyd drummer joins world’s first classic car fund

Pink Floyd’s drummer Nick Mason and the so-called “car dealer to the stars” are raising $50m (£31m) for the world’s first classic car fund.

By Graham Ruddick 6:00AM GMT 07 Feb 2011

IGA Automobile plans to trade iconic and classic cars as demand for physical assets, such as wine and gold, surges. The fund, which aims to launch in April and eventually raise $150m, will be the first to target classic cars purely for financial returns, with the market dominated by collectors.

It has drawn up a list of 25 cars it plans to target, including the Ferrari 250 GTO and Aston Martin DB4 Zagato. The market for classic cars has expanded rapidly over the past 20 years, according to IGA Automobile, with annual auction sales rising from $30m in 1994 to $422m in 2009.

Ray Bellm, a co-founder of the fund and former chairman of the British Racing Drivers’ Club, said: “As people get fed up with paper assets they have gone back to physical assets. With emerging nations gaining more wealth there is increasing demand for cars. They are pieces of art.”

According to Mr Bellm, a classic car bought in 1991 for $8m would now be worth $82m. The Ferrari 250 GTO sells for between $25m and $30m. The seven-year fund is targeting wealthy individuals by asking for a minimum investment of $500,000, but is also understood to have attracted interest from institutions.

Alongside Mr Bellm, a former chief executive of consumer medicine group International Laboratories, which was sold to Pfizer in 1994, management of the Guernsey-based fund will be led by property fund manager Grant Tromans and Nick Lancaster, the founder of Lancaster and the former chief executive of HR Owens, the luxury car dealer. The chairman is Jeremy Agace, the founder Mann & Co estate agents, which became part of Countrywide.

Additionally, the fund will be advised by the designer of the McLaren F1 road car and Nick Mason, the Pink Floyd drummer and car enthusiast.

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