Why Chrome Temple is investing in speed

Sitting in a classic Ferrari is more fun than sitting on a stock portfolio.

The smell of the leather trim, the cool feel of the steel gear lever and the soft green glow of the driver’s instruments are a feast for the senses – even if you don’t turn it.

A group of big investors is betting that a portfolio of classic cars could deliver heady returns for years to come.

Instead of investing in cryptocurrencies, stocks or property, Sydney-based private equity fund Chrome Temple is gambling on the future of cars with posters that have graced bedroom walls around the world.

It’s a unique approach that has attracted like-minded petrolheads, including those who don’t have $1,000,000 to spare to buy and store exotic cars.

Lex Pedersen, CEO of Chrome Temple, said that collector car prices have been increasing as cars have gone green.

“We’re investing in meaningful vehicles as opposed to equities, cryptocurrencies or other traditional forms of investment because what we’re seeing with the hybridization or electrification of cars, there’s no more capacity to build these analog powertrains.

“We have arrived at the beginning of the next automotive revolution… these vehicles that are so dear to our hearts, these analog machines inside combustion engines that are no longer in production.

“There’s no better way to drive demand for an asset and tell someone they can’t have it anymore, and that’s basically what’s happening in the auto industry right now.”

Increasingly strict regulations regarding emissions, noise and mandatory safety equipment are changing the way cars are driven. Some countries have banned the sale of internal combustion vehicles in the next decade, and the European Union is expected to introduce mandatory speed limiters in the medium term.

Which means that the supercars of tomorrow will not look like the supercars of today or yesterday.

Rather than investing in cars that achieved classic status decades ago – such as the Jaguar E-Type or Aston Martin DB5 – the fund focuses on cars idolized by children of the 1990s.

Cars like Lamborghini Diablo or Ferrari F355.

And the Nissan Skyline GT-R.

Chrome Temple paid an undisclosed seven-figure sum for the incredibly rare Bathurst 1000-built Nissan and believes its value will continue to rise.

Pedersen said the Group A Nissan GT-R was a “good investment”.

“For some time now, the car has been worth a million dollars, how many millions is really the question for something like this.

“There’s sentimental value and scarcity because we’re only building five – we’ve written one off.”

Former Nissan Motorsport Australia team principal Alan Heaphy said the locally developed GT-Rs, nicknamed Godzilla by motorsport fans, were “the best in the world”.

“The Nissan GTR was a weapon,” said Heaphy.

“Our job was to make him unbeatable.”

The Group A GT-R is a magnificent machine to behold, with exquisite detailing that speaks to its single-minded purpose.

Which is a good thing, as investors in the fund probably won’t be driving it – cars are supposed to be investments, not toys.

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