Fine Violins Fund looking for $50m
From the FT:
A hedge fund investing in old violins has been pledged $11m (£5.5m) in the latest sign of investor willingness to put money into offbeat assets that were previously the exclusive domain of collectors and enthusiasts. Florian Leonhard, a London-based violin dealer and restorer, is aiming to start investing the Fine Violins Fund once it has raised $50m, with a target of returning 8 per cent to 12 per cent a year. The fund is perhaps the strangest in a series of new asset classes being created by investors trying to avoid stocks and bonds. Hedge funds have been set up specialising in wine, art, shipping and even football players, demonstrating the appeal of assets that historically have not been correlated with financial markets.
Wow. That guy better get some good insurance. Joshua Bell’s violin is nearly 70 years older than the United States and is worth $3.5m. Lots of questions come to mind:
- How many uber expensive violins are out there?
- If this is going to work, why stick with violins?
- Is this guy is going to buy violins and just lock them up? Or let artists use them and get lots of insurance?
- What impact will this have on the violin market? The market may be small enough where supply is noticeably cut and prices inflate…also very doubtful the actors are rational…
- How liquid is the market? If I remember correctly, Bell’s violin has been owned by less than 10 people.
- At what point is something just a crazy idea and not a hedge fund?
