But that’s what happened at Wednesday’s Alternative Investment Summit 2010 in New York. Tony Finley, a general partner in a debut vehicle, the $100-million targeted Artist Rare Instrument Fund LP, demonstrated the type of rare stringed instrument that investors can place bets on, in anticipation of their rising in value.
And Christophe Landon, a dealer in rare stringed instruments and another fund partner, explains that because of his relationships around the world, the firm can avoid buying and selling at auctions and therefore will not pay commissions; thus the fund pockets all the proceeds. He notes that demand for rare instruments is especially strong now in Asia.
The vehicle is run more like a private equity fund than a hedge fund in that it has a five-year lockup period. The firm charges a management fee of 1.25% and a 25% incentive fee on realized capital gains.
“We’ve had a lot of people kick the tires,” says Edward Papier, another fund partner. Potential investors include a hedge fund manager who expressed a strong interest in making a personal investment and a number of attorneys who are checking it out for their high-net-worth clients. “Once we get some investors and some instruments under our belts, it’s going to skyrocket,” he said. “A lot of people have said, ‘Hey, Ed. Call me when you get your first $10 million.’ Nobody wants to be the first. But once we get it, it’s going to snowball,” he adds.