Hedge fund plays on theme of violin

A hedge fund investing in old violins has been pledged $11m (£5.5m) in the latest sign of investor willingness to put money into offbeat assets that were previously the exclusive domain of collectors and enthusiasts.

Florian Leonhard, a London-based violin dealer and restorer, is aiming to start investing the Fine Violins Fund once it has raised $50m, with a target of returning 8 per cent to 12 per cent a year. The fund is perhaps the strangest in a series of new asset classes being created by investors trying to avoid stocks and bonds.Hedge funds have been set up specialising in wine, art, shipping and even football players, demonstrating the appeal of assets that historically have not been correlated with financial markets.

“Financially it is a dead secure long-term investment,” Mr Leonhard said. “It helps to be versatile in your portfolio as an investor.” The fund will also have a philanthropic aim as the violins it buys will be lent to up-and-coming musicians, contributing to their value. “It is much better than wine,” he said. “Wine can go off. And unlike art, violins are not subject to fashion.”

(extract)

The article about Florian Leonhards Fine Violins Fund