Wednesday, August 20, 2008

Madonna's Bra, Clapton's Guitar Targeted by Art Investor Funds

(Bloomberg) -- Madonna souvenirs and vintage guitars are the latest alternative assets to attract interest from structured investment funds.

Marquee Capital Ltd. and Anchorage Capital Partners Ltd. are London-based companies planning to start the first investment funds devoted to rock and pop mementos.

``Some people have huge memorabilia collections,'' said Ted Owen, managing director of the specialist auction house, The Fame Bureau. ``These have quadrupled in price in the last 10 years. Now funds could make people aware that the rock and pop market has a financial base, rather than just a fan base.''

Auctioneers of luxury commodities such as art, wine and diamonds say investors are exploring alternative markets as stocks decline, economies stall and banks sack workers. Financial shares have led the MSCI World Index to a 17 percent slump this year as losses and writedowns top $500 billion. Art investment funds buy and sell a pool of works for a set fee and a share of any profit made.

``Demand for the rarest things is still very strong,'' said Owen in a telephone interview. ``The middle market is more difficult.''

Marquee Capital aims to amass the ``world's largest portfolio of investment-grade Madonna and non-Madonna memorabilia,'' according to its Web site, ACP's Guitar Fund will invest in rare and vintage guitars. Both funds are planned to start in 2009, their founders said in phone interviews.

Madonna at 50

Madonna celebrated her 50th birthday on Aug. 16. According to the January 2006 issue of U.K. magazine Record Collector, she was No. 1 in a list of ``100 Most Collectible Divas.''

``Madonna is a good investment because she's the most successful female pop artist of all time,'' said Chetan Trivedi, founder of Marquee Capital, in a phone interview. ``Many of the people who admire her now will be reaching the peak of their wealth in the next 10 years.''

Started in May 2007, Marquee Capital is a limited company that aims to make profits for its shareholders through capital appreciation of its collection and income from exhibitions, said Trivedi, 36, a former management consultant at A.T. Kearney Inc.

The company owns more than 125 Madonna items, including the 1985 ``Material Girl'' dress and the 1986 ``Open Your Heart'' gold-tasseled bustier, its Web site said.

In September 2007, the collection was estimated by Paul Fraser, who was then chairman of Stanley Gibbons Group Ltd., to have increased in value by 35 percent.

``Madonna's performance at auction has been up and down depending on the material,'' said Sarah Hodgson, consultant for popular culture at Christie's International in London, in a telephone interview.

Conical Bra

In April 2001, the star's black satin ``Blonde Ambition'' conical bra, by Jean-Paul Gaultier, sold at Christie's, London, for a triple-estimate 14,100 pounds ($26,180) with fees. In January 2007, at an auction held by Barrett-Jackson Cooper in Arizona, Marquee Capital paid a record $32,200 with fees for the ``Material Girl'' dress, said Trivedi.

In June 1999, at Sotheby's New York, her bustier and hat from the 1987 ``Who's That Girl'' tour fetched $12,650, barely making the lower estimate, said the BBC's Web site.

In February 2009, Marquee Capital, in collaboration with the U.K.-based private collector James Harknett, plans to use the Old Truman Brewery in London to stage the world's largest- ever paying exhibition of Madonna memorabilia.

``We're also expecting to launch a structured investment fund early next year,'' said Trivedi.

Marquee's Web site said that it aims to raise a minimum 7.5 million pounds in capital over the next five years. So far, the company has raised almost 500,000 pounds from about 30 investors, mainly private individuals based in the U.K., said Trivedi.

Guitar Pledges

Anchorage Capital Partners' ``Guitar Fund'' is aiming for a larger capitalization of $100 million. It has so far received pledges of $30 million from investors, according to Tommy Byrne, co-founder of the London-based investment group and head of the fund.

``The launch of the Guitar Fund is contingent on finding a lead investor,'' said Byrne, 49, a former director of the New York-based investment bank BlueStone Capital Partners. ``This is such a different asset class. People are reluctant to take the lead.''

Byrne said the start of the fund, to be listed on the Channel Island Stock Exchange, was originally scheduled for the beginning of the summer. ``I'm confident of finding a lead investor by October so that the fund will be ready by January 2,'' said Byrne.

Fender Record

Guitars with celebrity associations have made spectacular prices in recent years, said dealers. In June 2004, Eric Clapton's Fender Stratocaster ``Blackie'' sold at Christie's, New York, for $959,500, a record for any guitar at auction.

Hodgson, who was head of Christie's rock and pop department in London when the Clapton guitar was sold, said the market for non-celebrity guitars had ``slowed a bit'' in the last couple of years. She estimated that prices had dropped between 10-20 percent, especially for instruments that hadn't belonged to top musicians.

The Fine Art Fund, started in 2004 and now with $110 million investments, is the only structured investment fund of its kind that has remained conspicuously active in the West.

Precious stones are also attracting interest. On June 25, Diamond Circle Capital Plc, the first publicly listed fund to invest in rare colored and colorless diamonds, registered on the London Stock Exchange with an initial offering worth $74.32 million.

The fund had been scheduled to open in June 2007 with a start-up investment of $400 million, according to the Web site of the International Diamond and Jewelry Exchange.

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