When Wealth Management and Passion Meet Our investment expertise is there to allow you to build a long-term passionate investment which has a solid downside resilience. We seek to find under-recognized opportunities that are also beautiful and desirable in your eyes. We want to understand your needs and make sure that you will enjoy these cars as well as making a good investment with them. Introduction With the growing uncertainty in financial markets and Investing in collectors’ cars, apart from being solid financially, decreasing absolute returns, investors have started looking at has the added benefit of providing the collector with the a wider range of real assets to provide uncorrelated returns to satisfaction and pleasure of owning and driving these classic their portfolios. These real assets are less impacted by political automobiles. Similarly to trophy real estate properties, classic intervention, central bank action and other events linked to cars are an investment you can touch, but better than a financial markets. Therefore, adding a pocket of these assets building you can drive your investment and take weekend in the context of a portfolio provides diversification through tours out to the countryside and cruise and weave through the uncorrelated returns. The classic and collectors’ car market is lanes. Furthermore, these investments are far less legally one such asset. constraining than real estate and do not carry nearly the same concentration risk. They are investments you can make for the Classic and collectors’ cars have seen steady and continued long term and enjoy on the way. growth in value for well sought out models. Limited stock and availability as well as history makes for rarity, which sets aside In this context, our investment expertise is there to allow you a model from others and provides a strong downside to build a long-term passionate investment which has a solid protection in value. However, finding such models as well as downside resilience by finding under-recognized opportunities avoiding traps and mistakes takes time and experience. This is that are also beautiful and desirable in your eyes. This process where our support comes into play. can take time as we want to understand your needs and make sure that you will enjoy these cars as well as making a good investment with them. Market Comments from Various Experts We have seen the classic car market go through a significant and it’s likely that will continue as buyers can afford to be rally in the past few years with a much-needed correction in more selective.” certain segments in 2016. Some types had seen their price “While there have certainly been some price adjustments surge on the back of a few exceptional models being brought for various marques and models across the board, as to market and all owners of such cars then jumped onto the reflected in results from the early 2016 sales in Arizona and bandwagon to sell at this new-found level. This artificially Paris, there is no reason for alarm; the collector car market increased offering prices but at the same time the volume was is alive and healthy, and we’re continuing to see an much greater and in consequence buyers were in a position to enthusiasm from collectors and strong money for rare, choose higher quality for the same price. This has now high-quality cars that are offered fresh to the market.” partially come back to pre-bubble levels but buyers are fewer and always in search of the highest quality on offer. “For investors, classic cars are never a substitute for more traditional types of investment; they are always To open the discussion, here are some quotes from a number complementary to other assets in a portfolio. It’s possible 1 of automobile experts : they are now looking elsewhere, although the stock market does not appear to be very fruitful in terms of return on “Today’s collectors are more educated and savvy than ever investment at the moment, either. The fact remains that before; they do their homework and are more selective, the vast majority of people operating in this market are meaning there’s a growing gap between the so-called enthusiasts, whether they also have an eye on potential ‘average’ cars and the very best.” investment or not.” “Cars that are repeatable and often of average quality To avoid the obvious traps and possible flaky or “rusty” have quite rightly cooled off. In contrast, we’ve negotiated investments we have teamed up with auction house experts the sale of four significant cars since Rétromobile 2016, and auctioneers to provide an accurate valuation on cars we and I can tell you that each was sold for a sum far greater hold and additional advice on potential acquisitions. This will than when it was sold last, when the market was also help us identify undervalued cars and segments that are supposedly at its peak. From our point of view, this upper less likely to suffer from bubbles or crashes and will rise in sector of the market is holding up rather well, and will value over time and provide you with access to a larger continue to do so as long as cars are priced accurately.” number of potential opportunities. “The data is telling us the value gap between a good example and a great one is becoming more pronounced, 1 Source : Hagerty Automobiles website Honoris Cars SA Rue Saint-Jean 4, CH-1260 Nyon +41 22 55 22 911 www.honoris-cars.ch 2016 Market Overall – the collector car market lost traction in 2016, 130 Hagerty Top Index (LHS) printing down about 4.8%. For us, it seems to be a healthy 120 contraction, looking at the overheating we noticed on some 110 specific segments like Classic Porsche or Ferrari in 2015. 100 Indeed, those segments gained value very rapidly in 2013-15 in a pattern that looked somewhat speculative, forcing us to 90 adopt a cautious stance. 80 70 In 2015, while the Index was globally flat, the winners were Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 80s & 90s classics, affordable classics sub-$150,000, and the Jan-07 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15 May-08 May-10 May-12 May-14 May-16 best of the best – so not much has changed. Data source, Hagerty Automobile website Modern Deals One of the features of the market this year has been modern buyers diversify and look for points of differentiation. classics – some of them so modern that the term classic does Opportunities abound in this sector. Our tip – AMG. not apply in the eyes of many. Low mileage, limited edition manual supercars are the order of the day. Cars like the Aston Porsche will remain strong. Aston Martin will continue to Martin DBS manual – which five years ago weren’t flavor of flourish. The best Ferraris will continue to thrive – the rest the month because of the stick shift. may well find themselves back home on the continent. We tipped Maserati to gain last year and we are still waiting for it Sports cars from the noughties have arguably the best blend of to happen. Land Rover is still enjoying strong interest. reliability, usability, drivability, sex-appeal and political (and Mercedes are increasing in popularity (and price). environmental) incorrectness of any sports car era. They are also good value right now – so get in while you can. How For the smaller tickets there is also the possibility to find some about a Lamborghini Murcielago or Ferrari 599 for a shade recent Ferraris such as the 348 GTB or GTS which have been over $150,000 – or a Gallardo or 430 for even less. Porsche staying under the radar. Their younger cousin the 355 has 997 Turbos are also looking like a steal. already seen some appreciation off the lows but can still be found for a decent price and is a great car to drive. A BMW We expect the sub-$150,000 market place to be vibrant in 635CSi in good mechanical condition is also a steal: 2017 and we’re sure we’ll see some surprise auction results as considering what the 2002Ti has done, it may be following the same upward trend from here. 2017 Outlook Looking ahead to 2017, we expect to see a consolidation of increased interest in 80s and 90s cars will continue to prices on a somewhat lower base for models that have seen grow.” too rapid a growth in 2015 and 2016. These models have seen “I think, with the increased popularity in electric cars and a correction in the order of 15% to 25% to what is now closer modern technology, a turn of attention to the more raw to the longer-term average growth rate. These models should and enjoyable driving experiences of cars from the late 60s nonetheless find a solid floor around the current levels and and early 70s is on the cards. We drive technology laden start appreciating again from here. For the very high end vehicles doing 98% of the work for us so when we buy a pristine quality models, this correction has not happened and classic we want to re-engage with the real driving buyers’ increasing capacity to wait for the right model to come experience. I think these will bubble to the fore in 2017.” to market means that when they do appear there is enough capital on the table to keep the prices rising steadily. “More modern sports cars that are flying low on the radar: Maserati 3200/4200, Lancia Delta Integrale – and other The same expert panel has provided the following comments boxy 80’s & 90’s cars! on what to expect: I think the Porsche 996 GT3, V12 Jaguar XJS and the BMW 850 all still have some way to go.” “More of the same.