ACO Instrument Fund offers new opportunities for wholesale investors


New Fund acquires first asset: Australia’s only Stradivarius violin

The Australian Chamber Orchestra (ACO) today announced the launch and the first acquisition of its brand new investment fund: a rare Stradivarius violin.

The launch of the Australian Chamber Orchestra Instrument Fund – which invests in rare stringed instruments – and its initial acquisition mark a series of firsts. The $1.79 million Stradivarius is the first to be openly owned in Australia and the Fund is the believed to be first in the world to invest commercially in fine instruments while also acting as a ‘feeder Fund’ for an orchestra.

The Fund is an unlisted Australian unit trust, available only to wholesale investors. Its investment objective is to secure long term capital gains, with total fund volumes of up to $10 million. The Fund Trustee is the Australian Chamber Orchestra Instrument Fund Pty Limited. The Trustee has appointed the ACO as Manager of the Fund. The Fund’s Australian Financial Services Licence Holder is JBWere.

“Under the ACO Instrument Fund model, the instruments purchased by the Fund are given on loan to the orchestra to be played by ACO musicians. The ACO also takes responsibility for their care and maintenance,” said Brendan Hopkins, chairman of the Fund and a director of the ACO. Mr Hopkins was also formerly head of APN News & Media.

“While it is not unusual for musicians to receive rare and valuable instruments on loan, ordinarily they are lent by wealthy individuals or philanthropic organisations who retain ownership. In this case, the instruments remain under the stewardship and control of the orchestra, and in the ownership of the Fund. This is for the long term benefit of investors, the musicians and the listening public. The Fund represents a rare opportunity to combine philanthropy with good prospects of investment return,” he said.

ACO artistic director, Richard Tognetti, is a case in point. He plays the legendary Carrodus, made one of Stradivari’s only true contemporaries, Guarneri del Gesù. The violin was loaned to Tognetti by an anonymous benefactor in 2007. The then US$6.5 million violin has since grown in value to US$10.5 million.

The market for fine instruments is global, supported by long term historical performance data showing low risk and favourable return. Demand has risen steadily over the past 40 years, during which stringed instrument values have outperformed both the FTSE-100 index and the S&P500.In recent years, demand has been stronger due to increasing Asian interest in Western classical music.
Key initial investors in the ACO Instrument Fund include Guido Belgiorno-Nettis, Joint Managing Director of Transfield Holdings and Chairman of the ACO, and his wife, Michelle Belgiorno-Nettis.
Applications for units may be made at any time, with limited redemption opportunities every three years. The Fund will be terminated after ten years unless a majority vote keeps it on foot.
This Stradivarius will be played by Satu Vänskä, the ACO’s Assistant Leader. Vänskä was educated, trained, and performed as a soloist in Europe before being appointed as the ACO’s Assistant Leader in 2004.
Audiences around the country will have the opportunity to see and hear the Stradivarius violin in the ACO’s Baroque Virtuosi tour, 5th to 14th July. Joining the Stradivarius on stage will be one of the best collections of instruments held by an orchestra, valued at around A$16m.

Members of the public will also have the opportunity to name the violin, in a national competition.

More about the Stradivarius and the fine instrument market

  • The Stradivarius violin was made in 1728/1729, and is valued at A$1.79m.
  • Antonio Stradivari is widely acknowledged as the greatest violin maker of all time, and only 650 of his instruments survive.
  • Despite the recent global financial crisis, the market for high quality instruments has remained strong and some record prices have been paid for instruments in the highest category.

According to Simon Morris, of J & A Beare and Co. of London, the world’s most distinguished international violin experts and dealers: “From our own sales (which are the only private data I can confirm) it is obvious that the upper end of the market continues to rise and that there is a rising international interest in violins. 2009 marked the first year in which an example by Stradivari sold for over $10,000,000. A Guarneri del Gesu sold for $10,000,000 in 2010.”

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