Anchorage Capital Partners Ltd. Prepares to Launch 'The Guitar Fund' to Invest in Rare and Vintage Guitars

Anchorage Capital Partners Ltd. Prepares to Launch 'The Guitar Fund' to Invest in Rare and Vintage Guitars

LONDON, March 28/PRNewswire/ -- Anchorage Capital Partners ("ACP") (a Mercantile Investment Group company) recently reported to the Financial Times that it is preparing to launch a closed-ended fund which will invest in the rare and vintage guitar market. The US$100 million fund is to be listed on the Channel Island Stock Exchange (CISX) in Euros for a 10-year term.

According to ACP, the vintage guitar market has comfortably outperformed traditional markets ever since it has been tracked by an index created by Vintage Guitar magazine in 1991. "The '42 Index' which is widely accepted as a conservative tracking device for the vintage guitar market, has demonstrated an average annual return of over 31% since it began 17 years ago," said Tommy Byrne, co-founder of ACP and Chief Investment Officer of the Fund. 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 investors interested 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 Boomer generation. The Company views generations X and Y as a major part of the equation. Mr. Byrne explains, "The vintage guitar market, like some of the other exotic investment strategies such as art and wine funds can be enjoyed while holding them, but where this market differs significantly is in how the guitars improve every time you play them. The vibrations on the wood improve the sound of the guitars, so the more they're played the better they sound. The younger generation knows this and has an increasing appetite for acquiring their favourite models. After all, that Monet hanging on the wall doesn't improve every time someone looks at it."

The Fund has structured a lending strategy that will allow investors to borrow the guitars so they will continue to be played and enjoyed. The Fund will also lend guitars out to well-known musicians for tours, TV and movie spots adding value to the investment as it obtains memorabilia status.

Dr. Bernard A. Wagenmann, also a co-founder of ACP, emphasized that "...though this exotic strategy has proven to be a tremendous investment, investors cannot expect the same type of liquidity as in the stock and bond markets, which is why potential investors should view this as a long term investment strategy."

The Fund also benefits from an advisory board of guitar experts, private equity managers and professional musicians, one of which is Elliott Randall, best known for his lead guitar work with the band Steely Dan on mega-hits including Reelin' In the Years. Another professional musician on the Board, Robbin Thompson, once the lead singer for the Bruce Springsteen band Steel Mill, commented, "Since so many passionate collectors are unlikely to ever sell their own stash of vintage guitars, this fund prevents them from taking their investment to the grave."

Source: Anchorage Capital Partners Ltd

Contact: Tommy Byrne on +44(0)2-7409-0711 or tbyrne@anchorage-capital.com

---

Profile: International Entertainment