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Exploring Alternative Investments

Classic Cars From British Marques

1964 Aston Martin DB5

Not long ago classic cars were the ultimate investment, perched atop every index out there for sustained growth. That was until 2019 when the sector dropped a substantial 7%, according to the Knight Frank Luxury Investment Index. Last year however, they managed to claw nearly all of that back and are very high up when it comes to offering solid value over time.

That said, there has to be more to it than just classic cars in general. This year has been particularly strong for vintage Ferrari’s, but then that’s no surprise, and actually getting a good deal on one of those Italian stallions is easier said than done.

2012 Aston Martin ONE-77

A sleeper hit however, might be closer to home shores with the British marque of 007. As Neal Garrard of Aston Martin specialist Nicholas Mee puts it: “Aston Martin has grown in worldwide recognition, dramatically, in the last 20 years as a result in a substantial increase in new car production, the publicity it receives every few years from its exposure in the world’s most famous secret agent movies and in 2021, the awareness it will receive from being back on the Formula One grid, as a manufacturer.”

Indeed, with Aston Martin’s return to the F1 circuit, it seems like a good time to get yourself an elegantly English breed of supercar, and the selection at Nicholas Mee is more than just solid. It’s spectacular.

Jaguar E-Type

That all said, Aston Martin is not the only British marque that has been consistently appealing to collectors. Enter the Jaguar E-Type. The E-Type is a legendary set of wheels, arguably the most iconic Jaguar has ever built, definitive of the sixties and seventies. That’s likely been helped by Jaguar’s own restoration of ‘the most beautiful car in the world’ last year. The only problem is that finding a factory-condition original is far easier said than done, with poor restoration jobs and updated parts liable to let down the value of the car.

Therefore, if you want an authentic, faithfully restored original, your first port of call should be E-Types UK. The name says it all really, and the brand’s obsessive eye for the authentic means that any car that they see to will come out as close to the factory original as is physically possible. When it comes to classic cars – like in watches – that original condition is what really tips it over the line from a cool collectible to a serious investment piece. Sure, the future of modern cars looks electric, but nostalgia is a powerful persuader, and you can be sure classic cars will continue on the up, in spite of (or perhaps because of) the switch to electric.

Rare Whisky & Collector’s Casks

Casks Warehouse

Scotland produces 35 million litres of single malt per annum, which sounds like a lot. Global consumption levels however are hovering around 500 million litres. Needless to say, demand is significantly out-stripping supply. That imbalance, while an issue from the consumer side, presents a golden opportunity for investors. It’s an outlook that’s been backed up by some serious numbers: whisky as an asset has grown 564% over the past 11 years, and 40% in 2019 alone. It topped the Knight Frank Luxury Index in 2018 and 2019 and, even after a slight dip of 3.5% this year, is consistently one of the most solid investments there is.

That however is just half the story, as there are two distinctly different sides to whisky investing. On the one hand, you have bottles which are relatively static and will increase with value in line with demand, pure and simple. Casks on the other hand continue ageing the liquid inside.

This means that a savvy investor can hit on the next big prestige whisky before it even gets noticed. For bottles, auctions might well be your first port of call, with a fair few seasonal rare whisky sales from both the big London auctioneers and smaller independent specialists alike. For casks though, which involve a far more in-depth knowledge of the whisky-making process, you might require a bit more guidance.

Casks Warehouse

As Jas Patel of Tomoka Casks puts it, “there are many things to consider when investing in casks such as age, barrel, yield and distillery. All of these can have an impact on the potential value of the cask, but there are other factors such as the future of the whisky market itself, where it will be in 15- or 20-years’ time, and what your exit strategy will be at that time.”

Tomoka casks, with their exceptional insider knowledge, are a great option. Rather than holding the whisky themselves, they keep it in the distillery in which it was made, ensuring perfect aging condition and no sneaky storage costs. From there, they’ll give you regular updates on your whisky’s performance and the occasional tasting sample. In short, they make it less of an investment, more of an epicurean adventure that just so happens to net you returns of 10-16% per annum.

The Dalmore 35

If you already have your hand in whisky, perhaps with a couple of casks already under your belt, and you want to make the most of it, then you’ll likely be looking for a trading opportunity or two. As the name suggests, that’s what Cask Trade is for.

A group of collectors, connoisseurs, experts and investors, Cask Trade is a place where serious cask owners can buy, sell and manage their casks with likeminded whisky-lovers. It’s more about the enjoyment than the investment opportunities, but with names like Sir Colin Hampden White, judge at the Whisky Awards (and one of Amazon’s Three Drinkers alongside our own Aidy Smith) on board, there’s more than a dram of expertise on offer.

Fine Wine Outside Of Bordeaux

Oeno

Wine can generally be considered a safe haven for investors, a reliable asset in a world of turbulent uncertainty. That’s not to say it’s not a great investment too of course. In fact, this year fine wine boasted the second biggest growth on the Knight Frank Luxury Index, up by 13% on 2020. That means a total growth of over 200% since 2005 – not too shabby at all.

You might have assumed that with the hospitality industry closed for most of the past 12-month period, wine consumption was at an all-time low. According to Oeno CEO Daniel Carnio, that’s definitely not the case: “The wine investment sector is resilient and resourceful with a proven track record of performing well even during periods of extreme economic turbulence. While the effective shutdown of the hospitality trade has made it difficult for the wider industry, changing consumer habits have meant an uptick in consumption at home.”

Oeno

He should know; Oeno has won Fine Wine Investment Firm of the Year for the past two years at the Global Finance and Banking Awards. Given that their portfolio has outperformed DAX, FTSE 100 and S&P500 solidly across the year, it’s perhaps not a surprise.

Last year Champagne outperformed all other fine wine regions and both Italy and Rhone performed remarkably well, showing a strong diversification from the classic Bordelaise. Burgundy however seems to have done remarkably well this year and tops Oeno’s list of investment bottles: “Henri Jayer Echezeaux Grand Cru 1995 had a record-breaking price growth of 113.07% across 2020. Just a handful of these bottles still exist making this one of the rarest wines on the planet. It’s also one of the best wines on the market according to WineLister who included the bottle on their Top 5 Burgundy Grand Crus ranking with a near-perfect 983 score out of 1,000.”

Oeno

Needless to say, it’s an expensive bottle. If you’re after something a little more down-to-earth, particularly if you’re stocking your own personal cellar, then Cru Wine is a good place to look. Between their Wine Club, designed to introduce drinkers to discover new regions and the vintages therein, and their investment wing, Cru Wine offers a more holistic approach to fine wine.

One of their most useful services is to help you discover what you might already have: a free cellar valuation. Prices for bottles are always going up and down and keeping track of what you actually own is harder than you might expect. Cru Wines will make sure you not only know what you have hidden in your cellar, but that you can make the most of it in coming years.

Fine Art Online & Off

Fine Art Gallery

Galleries are closed, auctions are virtual and social distancing means that seeing works in person is harder than ever. None of that has made a dent in the contemporary art market though as, being the creative and versatile arena that it is, many artists and galleries have simply moved online.

On one hand, that’s meant a slight decline at the top end – this is the first year in a long time no artwork has sold for more than $100 million – but it’s kept things healthy overall. Botticelli’s Young Man Holding a Roundel, for example, recently sold at Sotheby’s for $92 million, proving that the Old Masters are still buoyant; on the other hand, blue chip works are becoming the bread and butter for most sales.

Fine Art
Fine Art

The difference however seems to be a personal one for buyers. As Sebastian Duthy of auction tracking AMR All-Art Index says, “the problem was compounded by the slowing the supply of quality works as consigners who could afford to wait, preferred to sit it out at home. Having said that, there was still plenty of enthusiasm from buyers. With a new emphasis on home working, there was a surge in demand from collectors sprucing up their homes.”

So, the demand is still there, but collectors and investors are happy to play the waiting game for the top-end pieces, while investing in more accessible artwork for their own home. It’s why online sales have seen a huge surge of interest while auctions simply haven’t. Still, some might have been a bit more tempted by the big-ticket items if they realised there’s more you can do with fine art than leave it in storage.

Red Eight Gallery

Red 8 Gallery is quickly becoming one of the most successful digital art platforms out there, so much so that despite the current crisis, they will be opening their first physical space in the coming months. Perhaps even more interesting to those with an artistic portfolio already under their belt however is their leasing service.

Dubbed Red 8 Rental, the service allows their clients to rent out their art works to events, offices, and all spaces that might need a dramatic piece of canvas or sculpture. It means that, even if the climate’s not perfect to sell the piece in its entirety, you can still make plenty of money without any effort on your part. Admittedly it means that businesses don’t need to buy the artworks, but with global sales seeing a drop anyway, this might just be the perfect solution for everyone involved.

International Investments

Cook Island

So far, we’ve only really addressed the product side of the luxury lifestyle when it comes to investments, but there is another side to it. Granted travel’s not the most important thing in the world as we can’t leave our houses quite yet (come on, Boris) but once lockdowns across the world start lifting, the surge in tourism is going to be dramatic.

That’s why we’re considering getting ahead of the curve and investing in a few far-flung locations so that, when that inevitable surge hits, it leaves behind plenty of capital. Of course, it’s all about picking the right place. According to Pacific Trade Invest Australia, the painfully beautiful countries dotting the Pacific are ripe for investment. PTI Australia works with 16 island nations across the Pacific, working with investment promotion authorities within each to help identify investment opportunities for their clients.

Fiji

The obvious projects involve tourism, which was seeing an impressive surge before the current crisis. But you want more from an investment than seasonal tourist trade which, as Leata Alaimoana Roberts, Impact Investment Manager PTI Australia, explains, The Pacific Islands have aplenty:

“The Pacific Islands not only provide idyllic lifestyles and landscapes but are also the home of largely untapped business opportunity. Offering a range of economic advantages including stable economies, supportive governments, safe communities, low operating costs and skilled workforces, the Pacific is open for business. The region has seen an influx of interest over the past few months, thanks to its pristine nature and ability to be an oasis during global events such as COVID-19. There are many investment-ready projects, island resorts, farm to table businesses and existing and proposed infrastructure, opportunities ready and waiting.”

Vanuatu

With that in mind, PTI Australia support an end-to-end investment process tailored to investors’ needs. That’s involved helping to set up the Pasifika Diaspora Fund, introducing global contact centre Unity4 into Fiji and helping Vanuatu coffee producer Tanna Coffee hit a new milestone in investment. Between myriad opportunities available and the fact that this is one investment you’ll be more than happy to visit in person, if you’re thinking of expanding your portfolio overseas, the Pacific Islands are a strong way to go.

Freedom Of Flight

Pilatus PC-12 NGX

In the current global climate, there are a plethora of benefits of owning a private jet. Now more than ever, flying privately not only allows you to travel in comfort and save time, but also greatly reduces the chances of any virus transmissions.

Now, private aircraft do depreciate, there’s no getting around that. Most business jets and larger turboprops lose around 50% of their original value within the first 10 years. However, there’s one aircraft that has consistently outperformed the competition when it comes to the depreciation impact: the Swiss manufactured Pilatus PC-12 – “the SUV of the skies”.

Pilatus PC-12 NGX Cabin

With a range of 1,765 nautical miles (when travelling with four passengers), an extra-large baggage compartment and an executive interior designed by the BMW Designworks, the PC-12 is a perfect choice for both business and leisure travel. Seating up to nine passengers, the aircraft can land on grass and unpaved runways, bringing you even closer to your final destination.

Pilatus PC-12 NGX

Unlike most private aircraft, which begin depreciating from the first take-off, Pilatus’ build quality combined with correct demand and supply management in the market ensure that, should you need to sell your aircraft, you’ll likely achieve up to 80% of its original value, even a decade on. That’s truly remarkable. A leading UK-based aviation finance specialist noted: “The aircraft is very versatile and has a global appeal which offers owners the peace of mind that they are investing in a popular type. Similarly, the low operating costs and the reliability of the engine and avionics adds to that sense of comfort. For that reason, we depreciate the aircraft slower than other aircraft when we come to assess values of our portfolio.”

If time is money, the PC-12 – available from Oriens Aviation in the British Isles – is one of the most solid alternative asset investments out there.

About the author

Sam Kessler

Sam Kessler

Legend has it that Sam’s first word was ‘escapement’ and, while he might have started that legend himself, he’s been in the watch world long enough that it makes little difference. As the editor of Oracle Time, he’s our leading man for all things horological – even if he does love yellow dials to a worrying degree. Owns a Pogue; doesn’t own an Oyster Perpetual. Yet.

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