Salsaga Blog

LONDON, March 28 /PRNewswire/ — Anchorage Capital Partners (”ACP”) (a Mercantile InvestmentGroup company) recently reported to the Financial Times that it is preparingto launch a closed-ended fund which will invest in the rare and vintageguitar market. The US$100 million fund is to be listed on the Channel IslandStock Exchange (CISX) in Euros for a 10-year term. According to ACP, the vintage guitar market has comfortablyoutperformed traditional markets ever since it has been tracked by an indexcreated by Vintage Guitar magazine in 1991. “The ‘42 Index’ which is widelyaccepted as a conservative tracking device for the vintage guitar market, hasdemonstrated an average annual return of over 31% since it began 17 yearsago,” said Tommy Byrne, co-founder of ACP and Chief Investment Officer of theFund. He went onto say, “Historically, when the major markets have collapsed,this market has plateaued until the traditional markets picked up again.” Currently the Fund has a number of institutional investorsinterested in subscribing for shares of the Fund in amounts beginning at US$10 million each, though this is contingent on finding a qualified Lead Investor. Valerio D’Arco, a Senior Associate at ACP said “Most of the interest we are seeing is being generated from the wealth management divisions of private banks, family offices and funds of hedge funds. We are also beginning to see more interest from High Net Worth Individuals who want to take advantage of being able to invest some of their retirement money into a listed security.” With many vintage guitar models trading well over US$250,000,ACP doesn’t see the market being driven up simply by the Baby Boomergeneration. The Company views generations X and Y as a major part of theequation. Mr. Byrne explains, “The vintage guitar market, like some of theother exotic investment strategies such as art and wine funds can be enjoyedwhile holding them, but where this market differs significantly is in how theguitars improve every time you play them. The vibrations on the wood improvethe sound of the guitars, so the more they’re played the better they sound.The younger generation knows this and has an increasing appetite foracquiring their favourite models. After all, that Monet hanging on the walldoesn’t improve every time someone looks at it.” The Fund has structured a lending strategy that will allowinvestors to borrow the guitars so they will continue to be played andenjoyed. The Fund will also lend guitars out to well-known musicians fortours, TV and movie spots adding value to the investment as it obtainsmemorabilia status. Dr. Bernard A. Wagenmann, also a co-founder of ACP, emphasizedthat “…though this exotic strategy has proven to be a tremendousinvestment, investors cannot expect the same type of liquidity as in thestock and bond markets, which is why potential investors should view this asa long term investment strategy.” The Fund also benefits from an advisory board of guitar experts, privateequity managers and professional musicians, one of which is Elliott Randall,best known for his lead guitar work with the band Steely Dan on mega-hitsincluding Reelin’ In the Years. Another professional musician on the Board,Robbin Thompson, once the lead singer for the Bruce Springsteen band SteelMill, commented, “Since so many passionate collectors are unlikely to eversell their own stash of vintage guitars, this fund prevents them from takingtheir investment to the grave.”Anchorage Capital Partners Ltd

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