Geneva: A Swiss-based asset management firm is seeking to profit from rising prices for collectable cars.
The Classic Car Fund aims to make a return of 17 per cent a year by buying and selling a variety of investment-grade classics, ranging from prewar Bugattis to postwar Pontiac muscle cars, its manager Filippo Pignatti said.
"We've used the model of an art fund," Pignatti said in an interview.
"Everyone knows what a classic car is worth. The skill is to know when to buy them and when to sell them." The fund follows IGA Automobile LP, advised by Pink Floyd drummer Nick Mason, which plans to buy sought-after autos.
The Hagerty's Cars That Matter "Blue Chip" Index, measuring prices, rose 67 per cent in four years to the end of 2010. Investors are watching to see if the funds can succeed in a market that can be as risky as alternative investments in art and beverages.
The open-ended fund, registered in Liechtenstein, was set up by the Count of Custoza Family Office AG in Zurich and will be quoted this week on the Fondsboerse Deutschland, Pignatti said.
He plans to raise €50 million (Dh249 million) in the first year.
Investors can participate for as little as €100. The fund has a target capitalisation of €350 million after five years.