Guitar Hedge Fund ~ market folly

Wednesday, November 26, 2008

Guitar Hedge Fund

There recently was a hedge fund formed to invest in guitars... and no, I'm not joking. Taken from the IG Blog,

"Anchorage Capital, a London investment firm, is expected to launch the Guitar Fund. Set up as a hedge fund, the Guitar Fund will seek investment returns by buying rare and vintage electric and acoustic guitars (steel-string and classical), plus mandolins, banjos and amps.

And get this, investors in the fund will also have the opportunity to actually play the guitars they invest in and take them home if they wish. Also, the fund plans to lend guitars out to well-known musicians for tours, recording and other events, which would enhance memorabilia value of the assets, ahem, guitars.

The basis for the fund’s idea is Vintage Guitar magazine’s “42 Guitar Index,” created in 1991 to track prices of vintage guitars. The index has demonstrated an average annual return of over 31% without experiencing a single down year.

The fund will have a fixed 10-year life and will be listed on the Channel Islands Stock Exchange. There are currently several institutional investors willing to contribute over half of the fund’s targeted kick-off investment amount.

What’s the amount, you ask? 55 million British pounds, the equivalent of about $100 million U.S. dollars."

First, we start seeing more publicity about wine funds, and now, a guitar fund. Maybe we should be thinking more outside of the box with some of our investments! Read the rest of the post over at IG Blog.

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