Investment fund using rare coins is looking for backers

For those of you that aren't already aware, over the past few decades, several groups of people have attempted to formalize institutional interest in the Australian numismatic market by getting an investment fund off the ground (whose sole purpose is to profit by taking a position in the market for rare Australian coins and banknotes).

A number of different factors have caused these attempts to stall (not least the amount of preparatory work required), and for many years it has never been anything more than a good idea. That's all changed as of earlier this month.

Robert Jaggard (of Jaggard's in Sydney) has been working on this project with Hindal Securities for some years now, and as the fund has now issued an "Information Memorandum" and is looking to raise a cool A$25 million to invest, I expect he's quite pleased with the progress that's been made to date.

That the preparatory work has now been done means that the fundraising will be taking place in earnest, presumably through financial planners around the country. Once that's done (the cutoff date is July 27th, 2007) , the rubber really hits the road and the "Investment Professional" (Jaggard's) gets to start allocating funds / buying coins and notes. I've put the term "Investment Professional" in inverted commas not for any reason other than the fact that is the legal role that Jaggard's play in this equation - they'll be the ones acquiring, trading and selling coins and notes on behalf of the fund's unit holders.

They won't be concerning themselves with the fund's administration, just the nuts and bolts of the trading business.

Just what impact will this have on the market for the items that you and I trade every day of the week? Time will tell, and there are a number of possible outcomes. One is that the $25 million of additional demand (which probably won't be raised all at once, let alone spent all at once) drives prices for key items ever higher, ensuring our rarest and most keenly sought items liquid for many years to come. Just what else could happen? It really is going to depend on how the funds are allocated, and we won't know that until later this year at the very earliest. Interesting days indeed!

If you would like a copy of the Information Memorandum or to make further inquiries please email fund@hindal.com.au providing your full name, address, email and contact number.


Category: Market News