EAMR was founded in London last year with a view to establishing emotional assets as a viable asset class. It has appointed Kleinwort Benson (Channel Islands) Fund Services to administer the Guernsey-based Emotional Assets Fund 1.
The fund invests in 15 sectors of the collectables market, with a target return of 15 per cent a year over five years. Around 60 per cent of the fund will be managed on a fund of funds basis, with the remaining 40 per cent invested directly in tangible assets, which may also include vintage jewellery and ceramics.
The fund will not be leveraged and will combine top-down asset allocation with bottom- up selection of assets. A panel of experts will be used to advise the fund on the direct investments and there is an investment committee dedicated to the funds.
EAMR expects to invest in a core of around six funds, with each underlying fund comprising 5 to 10 per cent of the portfolio. Direct investments will be made on a satellite basis in assets such as vintage watches and jewellery, rare ceramics, manuscripts and atlases, where funds may not be available.
The company believes that the assets in which it invests could appeal to investors who are questioning the merits of paper assets in the aftermath of the credit crunch. It says that hedge funds and private equity have over-promised and are overly dependent on leverage to produce returns.
Unlike the funds in which it invests, it will have a broad spread of assets, which reduces the risk of relying on one cyclical area of the collectables market. However, this fund’s niche appeal is highlighted by its £100,000 minimum investment.