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Pop, rock memorabilia for profit

From bras to guitars, investors turn to alternative markets

By BLOOMBERG NEWS | Tuesday, August 26, 2008

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Madonna foundation garments and vintage guitars are the latest in alternative assets to attract interest from structured investment funds.

Marquee Capital Ltd. and Anchorage Capital Partners Ltd. are London-based companies planning to start the first investment funds devoted to rock and pop mementos.

"Some people have huge memorabilia collections," said Ted Owen, managing director of the Fame Bureau, a specialist auction house. "These have quadrupled in price in the last 10 years. Now funds could make people aware that the rock and pop market has a financial base, rather than just a fan base."

Auctioneers of luxury commodities such as art, wine and diamonds say investors are exploring alternative markets as stocks decline, economies stall and banks fire workers. Art investment funds buy and sell a pool of works for a set fee and a share of any profit made.

"Demand for the rarest things is still very strong," Mr. Owen said in a telephone interview. "The middle market is more difficult."

Marquee Capital aims to amass the "world's largest portfolio of investment-grade Madonna and non-Madonna memorabilia," according to its Web site, http://www.marqueecapital.com. ACP's Guitar Fund will invest in rare and vintage guitars. Both funds are planned to start in 2009, their founders said.

Started in May 2007, Marquee Capital owns more than 125 Madonna items, including the 1985 "Material Girl" dress and the 1986 "Open Your Heart" gold-tasseled bustier, its Web site said.

"Madonna is a good investment because she's the most successful female pop artist of all time," said its founder, Chetan Trivedi, a 36-year-old former management consultant at A.T. Kearney Inc. "Many of the people who admire her now will be reaching the peak of their wealth in the next 10 years."

In September 2007, the collection was estimated by Paul Fraser, who was then chairman of Stanley Gibbons Group Ltd., to have increased in value by 35 percent. According to the January 2006 issue of British magazine Record Collector, she was No. 1 on a list of "100 Most Collectible Divas." She celebrated her 50th birthday on Aug. 16.

In April 2001, the star's satin "Blonde Ambition" conical bra, by Jean-Paul Gaultier, sold at Christie's, London, for a triple-estimate $26,180 with fees. In January 2007, at an auction held by Barrett-Jackson Cooper in Arizona, Marquee Capital paid a record $32,200 with fees for the "Material Girl" dress, Mr. Trivedi said.

In June 1999, at Sotheby's New York, her bustier and hat from the 1987 "Who's That Girl" tour fetched $12,650, barely making the lower estimate, said the British Broadcasting Corp. Web site.

In February 2009, Marquee Capital, in collaboration with the Britain-based private collector James Harknett, plans to use the Old Truman Brewery in London to stage the world's largest-ever paying exhibition of Madonna memorabilia.

Anchorage Capital Partners' "Guitar Fund" is aiming for a larger capitalization of $100 million. It has so far received pledges of $30 million from investors, said Tommy Byrne, co-founder of the London-based investment group and head of the fund.

"The launch of the Guitar Fund is contingent on finding a lead investor," said Mr. Byrne, 49, a former director of the New York-based investment bank BlueStone Capital Partners. "This is such a different asset class. People are reluctant to take the lead."

Mr. Byrne said the start of the fund, to be listed on the Channel Island Stock Exchange, originally was scheduled for the beginning of the summer. "I'm confident of finding a lead investor by October, so that the fund will be ready by January 2," Mr. Byrne said.

Guitars with celebrity associations have made spectacular prices in recent years, dealers said. In June 2004, Eric Clapton's Fender Stratocaster "Blackie" sold at Christie's in New York for $959,500, a record for any guitar at auction.