Milan-based asset manager Azimut raised a new investment vehicle focused on classic car investing with a sustainable approach.
Azimut SCA-SICAV-RAIF Automobile Heritage Enhancement (AHE) is a Luxemburg fund managed by Azimut Investments along with the advisor of Alberto Schon, CEO of Rossocorsa, an operator in the auto industry.
The amount raised so far by the €6.8 billion ($7.5 billion) firm was not announced, but the plan is to raise funds in Italy and around the world, in addition to the firm’s existing funds spanning private markets. The fund’s structure is evergreen in that it has an unlimited duration and at the same time provides the investor with the option of exiting the fund over time.
The fund is also promoting ESG characteristics as required by Article 8 of the SFDR as initiatives will encourage the use of low environmental impact means of transport to improve the sustainability of the supply chain as well as improving the visibility and awareness of the Italian and European cultural heritage of UNESCO sites. In addition, the fund is preserving and restoring cars with historic and unique features by encouraging the employment of specialized automotive craftsmanship.
“With the AHE fund, we continue our commitment to integrate real assets into financial portfolio allocations, also through the creation of an investment club dedicated to our high-end private clients,” said Giorgio Medda, CEO and global head of asset management and fintech of Azimut Group. “We are currently facing a generational evolution for asset managers who can now incorporate the time factor into portfolios to generate performance, beyond the traditional relationship between risk and return. With the AHE fund, time will not only enable to benefit from an illiquidity premium for patient capital investments, but also to extract value from the cars that will be part of the portfolio since they are unique and unrepeatable assets facing an irreversibly growing demand.”
The expectation, he added, is that the fund will create value for historic sports cars that represent “an artistic heritage” that should not be lost. The fund’s investment strategy will focus on luxury “Supercar” and “Hypercar” classic cars produced in limited editions with an average value of more than €1 million, a market reserved for collectors.
According to Statista, the classic car market is estimated to grow from $30.9 billion dollars in 2020 to about $43 billion in 2024 — a forecast that Azimut says exhibits significantly higher growth rates than other real luxury assets such as watches and artwork. In addition, the classic car industry offers an important decorrelation from financial markets or other real assets and a more attractive risk profile than all financial and non-financial asset classes which translates into a historically lower drawdown and a greater ability to recover losses.
“The time frame required by investments in the most profitable cars, the typical flexibility required by the market and the need to create a network of partners seemed impossible to reconcile with an investment fund,” said Schon, CEO of Rossocorsa and advisor to the AHE fund. The work done by Azimut in recent months, listening to the needs of the sector, has enabled the creation of an evergreen ESG fund that is tailor-made to the asset class of classic cars and hypercars, he added.