WealthManagement.com Podcast 2/25/2022

Many People Have a Passion for Classic Cars, but Few Know How to Manage these Investments.

Peter Neumann and Steve Linden discuss the planning involved with classic car collections.

Autoweek, December, 2021

Hagerty Goes Public, Amidst Rapid Collector Car Expansion.

Peter Neumann, co-founder and CEO of Chrome Strategies Management, which advises collectors, said that Hagerty “sees an opportunity to widen the awareness of its brand with experiential elements, and also draw in more clients for its insurance business.”

Sports Car Market Roundtable: State of the Market.

Peter Neumann writing in Sports Car Market Magazine, discussing the state of the collector car market:

“Whether employing qualitative or quantitative analysis, the collector-car market has been healthy in 2021. This is almost certainly due to the pandemic-induced mentality of, “I’ve always wanted a collector car, and what better way to be socially distanced than to ride around in a classic convertible?” Demand has been strong, and that is reflected in values.

If measured by the number of participants in the hobby, we think that the size of the hobby is stable. The older demographic that is exiting the hobby is being offset by younger newcomers entering the hobby, albeit in different segments of the market. If measured by financing, the storage industry, online participation and other metrics, the hobby is certainly growing.

Given that the collector-car market is global, so much depends on what happens around the world as we attempt to return to “normal.” Participation in the collector-car market will be uneven as socially interactive versus socially distanced events open up on different schedules in different countries.

If we look beyond the pandemic effect, where prices rose as demand outpaced supply, longer-term trends will come back into play. In the short term, however, we expect that values across most of the collector-car market will tend to correct, which will result in values more reflective of those prevailing pre-pandemic.”

Advising Clients on Their Automobile Collections.

Peter Neumann writing in Wealth Management Magazine discussing how best to advise clients on their classic car collections.

Auto collectors driving demand for car clubs, museums, and space — The Palm Beach Post

This article points to what’s happening in Palm Beach County around the classic and collectible automobile lifestyle. Values in collector cars fluctuate like all assets, but the interest from this perspective is a by-product of the explosion in ‘experiential’ spend. 

This storage approach, which has been going on for some time and we are seeing globally, is one more option (with proper due diligence of course) to facilitate the holding cars of merit in the right space, with the right exposure.

Chrome Strategies Management is proud to be a sponsor at The Business of Art Observed in New York on November 12, 2019

From our perspective, we know that great cars evoke similar responses from owners and admirers as does great art. In fact, we suspect that on a global basis, more people appreciate great cars because they are a visible and integral part of daily life vs great art. In the last 5 years specifically, these two asset classes have also narrowed in terms of their economic value as well as crossover in ownership. We believe that it is important that professionals who are advising their clients, work to get a better understanding of the classic car asset class that we specialize in, and incorporate best practice approaches in the management and care, as they do with fine art. 

M. Peter Neumann quoted in:  Luxury Investment Index – Classic Car Special Q2 2019 –  Knight Frank- October 12 2019

Knight Frank research, well known for their widely read annual Wealth Report, quoted CSM’s CEO Peter Neumann in this recent Luxury Research quarterly report. This interim report was published in conjunction with the Americana Manhasset Concours D’Elegance which took place in Long Island, NY on October 13, 2019.

Our view which was mentioned in brief here, is that we observe, and continue to expect, the outperformance from a value perspective, of classic and collectible automobiles that have desired differentiations due to a variety of intrinsic factors, versus the broad universe and large pool of cars in this sector. This observation is corroborated by lower cleared average prices at auction, versus continued record prices set by ‘special’ or ‘unrepeatable’ examples.  Aside from this value comment, we also mentioned that we see continued growth in the hobby and ‘lifestyle’ elements among collectors and enthusiasts. The industry is expanding in many ways. This includes planning around this asset class especially when the collection represents materiality in individuals/ family overall investment portfolios.

Steve Linden quoted in : Classic Cars: Passion or Profit? : Pall Mall Art Advisors – September 25, 2019

CSM’s comment in this article published by Pall Mall Art Advisors, a firm which focuses on tangible asset management, was that interest in the “Preservation Class’, or ‘Survivors” continues to grow. Survivors can generally be described as those that are running and usable, and are in unrestored condition, notwithstanding consumables such as tires, belts, hoses, etc. Owners often face the decision whether to maintain the car in its current condition or  undertake full or partial restoration. In many cases that answer is quite clear, in others there can be a debate. Much of this rests on the rarity and the provenance of the automobile and how values might be affected by the different routes taken.