How to pound notes
How to pound notes – Extract about Fine Violins Fund, with quotes from Florian Leonhard. (Charles Batchelor, Financial World, November 2007)
Foundations and companies acquiring instruments on behalf of professional performers are a well established feature of the musical instrument market. Their involvement can push up prices against the individual collector/investor.
They will be joined next year – if all goes well – by the Fine Violin Fund, a $50m fund combining knowledge of the violin market with the skills of the financial manager.
Florian Leonhard, a violin dealer and restorer, has raised $12m towards this total but expects to win the backing of about 20 family offices and a bank keen to boost its cultural credentials.
Leonhard believes he can achieve an average return of 11 per cent a year – possibly more – by buying and selling violins, restoring them and hiring them out. Instruments would be loaned to prominent players and their value would be increased by this association. Investors would, however, be locked into the
Cayman Islands-based fund for 10 years and would have to pay management fees.
“This is an inefficient market in terms of bringing buyers and sellers together,” says Leonhard. “But I will be able to source a violin in some mountain village in Italy and find a buyer in Hong Kong. These are non-replaceable items. The wood was sourced from ancient forests that don’t exist any more and we are not sure how it was treated at the time. This should give the fund steady but not crazy growth.”
(extract)< Hedge fund plays on theme of violin