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Wednesday, September 27, 2023

Ferrari Mania? Azimut to Launch ‘Evergreen Fund’ to Invest in Classic Cars 

Azimut will only wager on vehicles costing more than 1 million euros each

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ITALY: In 1977, a Ferrari owner sold his 1962 250 GTO due to his wife’s complaints. In 2018, the same model sold for $48 million, breaking all previous records for the most expensive vehicle ever sold. In 2017, a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupé sold for 135 million euros.

The value of vintage automobiles has increased by 185% over the last ten years, outpacing luxury rivals such as wine, watches, and art. The market has grown beyond a small community of collectors to include investors intrigued by the potential of large profits and a lack of connection to traditional portfolio assets.

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Giorgio Medda, CEO and worldwide head of asset management at Italy’s Azimut, is launching the first “evergreen” fund in the world to invest in classic cars. It will only wager on vehicles costing more than 1 million euros each and will choose cars with interesting histories. Alberto Schon, the owner of Ferrari and Maserati dealer Rosso Corsa, is the fund’s advisor.

Hetica Capital launched a 50 million euro “closed-end” fund in 2021, while Azimut’s fund has no expiration date and can accept fresh money forever. The Hetica fund has invested in 12 automobiles and plans to buy 30-35 by the end of the fifth year, leaving the final two years for selling and paying investors. It has big ideas and has never been able to create a portfolio of varied cars and diversified investors.

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The minimum investment threshold for Azimut and Hetica funds in Luxembourg is 125,000 euros, and Hetica’s Klassik Fund has to turn down calls from people wishing to invest 1,000-2,000 euros.

Florian Zimmermann, who has amassed a collection of 300 vintage cars, estimates that running costs for car collections could amount to 5-6% of the portfolio’s value. To keep these automobiles in working order, investors need to invest a lot of money, and automakers can make money from investment funds managing automobile portfolios.

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Mercedes-Benz Classic’s experts can vouch for a classic model’s authenticity, but the certification process can cost up to 20,000 euros. The market for classic automobiles is growing, with the value of historic cars increasing by 25% in 2022. Hagerty estimates the total value of all auctions and private sales for collector vehicles worldwide is around $80 billion annually.

Hagerty reported $3.4 billion in auction sales in 2022, compared to $774 million in 2007, with North America still the largest market. Market players predict that electrification will benefit classic cars, leading to their development into cult items. Ferraris are the most valuable antique vehicles, according to Adolfo Orsi, who founded the Classic Car Auction Yearbook and collected statistics on auction sales since 1990.

In 2021-2022, Ferraris brought in an average of $589,000 at auction, followed by Mercedes-Benz vehicles at $378,000 and Porsche vehicles at $348,000. In the last five to ten years, the classic automobile world has undergone a great deal of change.

Also Read: Ferrari Struggles Continue; Not What We Expected with the Car, Says Vasseur


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