Why classic cars are now a viable alternative to mainstream investment funds

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Vintage cars have risen 185% in value over the past decade, outstripping the growth of luxury rivals wine, watches and art, and ranking second only to rare whiskies.

These kind of megadeals are at the vanguard of billions of dollars of annual spending on classic cars globally in a wave of investment in this alternative asset.

"We've been monitoring the market for a long time," said Giorgio Medda, CEO and global head of asset management atAzimut."The track record of the past 30 years tells us classic cars have become a financial asset class we want our clients to have in their portfolios." The Hetica fund, which is targeting returns of 9%-15% after seven years, has bought a dozen cars so far and aims to get to 30-35 cars by the fifth year, leaving the last two years to sell the vehicles and pay investors."We've seen more than 100 attempts at setting up funds in the past.

"It's getting harder and harder to find the proper mechanics to keep these cars alive. And you have to spend quite an amount of money to keep all these cars in running condition," he said. Nonetheless, the classic car market is expanding as the number of wealthy people also rises; the value of vintage cars grew 25% in 2022, their strongest performance in nine years and second only to art's 29% increase, according to Knight Frank.

 

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