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When money and connections mean you can invest in anything, anywhere, anytime, what ends up in your wallet?
Yes, the rich are affected by the same forces that influence everyone else: rising rates, trade wars and global populism. But in the rarefied world of investors with ultra-high assets, diversification does not mean indexed funds or the assembly of a standard combination of stocks / bonds / cash.
With uncertain prospects for equities, Bloomberg has invested wealthy investors and advisors in finding unusual opportunities in 2019 open to those with great fortunes and a taste for exoticism. Below is a sample of the possibilities.
Artistic finance
The Christ of Da Vinci as "Salvator Mundi." Bloomberg
"The new Ferrari of the hedge funder" is not Italian, fast or even a car, according to the financier art dealer Asher Edelman. It is a very high financial maneuver linked to the sale of illustrative material that is part of the insurance policy, partly slipping.
Offering a guaranteed minimum price to those who put the fine arts on the block has become standard in the best auction houses. Sellers love to know that the works will not remain unsold. In return, if art sells for more than the guarantee, part of the profit over the pre-established offer goes to the guarantor.
To discharge the risk, the auction houses are negotiating more "irrevocable offers", also known as "third party guarantees", with investors who could see it as a demonstration of financial value. With the peak of the art market, opportunities abound but involve greater risks and should be approached with caution.
The biggest profit for a guarantor was the auction of the last year of "Salvator Mundi" by Leonardo da Vinci at Christie & # 39; s. Guaranteed to sell for over $ 100 million, the painting was hammered to $ 450 million. Philip Hoffman, founder of the Fine Art Group based in London, estimated that the guarantor earned up to $ 150 million.
For those on a tight budget, a Chinese company plans to fund the purchase of a $ 75 million Michelangelo painting by issuing 7.5 million shares with restrictions to $ 10 a pop. Yulong Eco-Materials Ltd. said it is offering "the opportunity of its acquired masterpieces to anyone with an intermediary account".
Limited edition Ferrari
Some hedge fund managers are content with the "old" type of Ferrari, as in the real one. But even so, there are the Ferraris and then there are the Ferraris.
A red 1962 GTO owned by technology executive Greg Whitten sold in August for a record $ 48.4 million. Only 36 were made. (And yes, it is said that he went to auction with a financial guarantee).
More owners are buying and they are barely driving the supercars because the low mileage means a higher price later, said the expert and Ferrari driver Todd Morici. (Call those "garage art" cars.) Vintage cars as a category have returned 288 percent in the last decade, according to the Knight Frank Luxury Investment Index, or more than twice that of the index S & P 500.
Morici, 62, owns five Ferraris and builds collections for European and Middle Eastern buyers through his Morici Motor Sports LLC. Buying the right car is like buying the right stock, he said: "You can pay more to buy the best, because in the end it will be worth more".
Simple money will not always bring you. Ferrari allows only customers who participate in their motorsport program to purchase the 488 Pista Piloti special edition. Morici has a Blue Tour De France Custom Pilots Track for $ 500,000.
In any case, buyers are not accumulating piles of money. The credit line that Morici has with Ferrari allows him to borrow up to 70 percent of the value estimated in what he calls "a friendly rate".
psychedelics
