Every generation assigns value differently. As wealth transfers and tastes evolve, the assets that matter are quietly shifting. The question is whether you're paying attention.
Written by Lex Pedersen, CEO of CHROME TEMPLE
Timing is one of the most misunderstood concepts in investing. In my initial exposures to the investment world, I would hear it coined endlessly but didn’t accurately fathom the phrase.
Investors often think timing means predicting markets, buying at the bottom or selling at the top. In reality, timing is more often about recognising a structural shift before it becomes obvious to everyone else. By the time an investment thesis becomes universally accepted, much of the opportunity has usually passed.
History reminds us that entire asset classes have appreciated not because the assets themselves changed, but because the people assigning value to them changed. As one generation hands stewardship to the next, so too does the definition of what is desirable, culturally significant and ultimately worth preserving.
We are witnessing one of those transitions today amongst automotive art assets. Can you sense it?
Across developed economies, an unprecedented transfer of wealth is underway. Baby Boomers, who have dominated collector markets for decades, are gradually passing stewardship to Generation X, older Millennials and, increasingly, Generation Z. While much has been written about the financial implications of this transition, far less attention has been given to its cultural consequences.
Every generation collects differently. Particularly when the next generation is told they cannot have something (enter European Emissions legislation and the seismic structural shift in automotive).
Previous generations built extraordinary collections of traditional art, antiques, furniture and historic automobiles because those objects represented aspiration during their formative years. Today’s collectors have grown up in a different world. Their heroes are different, their influences are different and, unsurprisingly, the objects that capture their imagination are different too.
Collectors rarely spend their lives chasing the dreams of previous generations. Instead, they pursue the objects that shaped their own lives. The posters on the bedroom wall, the cars that dominated endurance racing, the machines they first experienced through magazines, television or, later, video games. Those memories create emotional connections that endure long after childhood, and emotion has always been one of the great drivers of collectability.
This is why the current generational shift deserves attention as there are more drivers at play than generations passed.
It is not simply changing who owns collectible assets. It is changing which assets are likely to attract the strongest demand over the coming decades. As tastes evolve, capital inevitably follows. Markets have always rewarded assets that remain culturally relevant to the generation with both the desire and the means to acquire them.
We have seen this before. Fine art has experienced it. Rare wine has experienced it. Watches have experienced it. There is little reason to believe Automotive Art will prove any different.
At CHROME TEMPLE, this observation has shaped our thinking for years. Scarcity, provenance and originality remain fundamental to identifying exceptional assets, but they are only part of the equation. We spend just as much time considering cultural significance, at our feet and beyond the horizon. Which vehicles represent the final chapter of an era? Which models genuinely advanced engineering or design? Which cars continue to resonate with the generation now entering its peak wealth creation years? More importantly, which of those assets are likely to remain culturally significant for the next twenty or thirty years? This, before we narrow in on specification.
These are very different questions from simply asking which cars are desirable today.
The most successful collectors, regardless of the category, have rarely been rewarded for following consensus. They have generally been rewarded for recognising enduring cultural significance before the broader market fully appreciates it. Value is seldom created overnight. It is established gradually as scarcity, provenance and cultural relevance converge over time.
This is why I continue to believe Automotive Art remains in the early chapters of a much larger story. Not every car will become collectible, just as not every painting hangs in a museum or every bottle of wine belongs in a serious cellar. However, the very best examples possess the same characteristics that have underpinned every great collectible category throughout history.
At CHROME TEMPLE, we have never believed we were simply collecting exceptional automobiles. We have always believed we were preserving the cultural artefacts of a generation. And like the modus operandi of a museum, these treasures are to be shared, not squirrelled.
As more collectors, investors and family offices begin to view these assets through the same lens, that distinction becomes increasingly important.
Timing has never been about predicting the future. It has always been about recognising when the world is changing and having the conviction to act before everyone else realises it has changed too.
For us, that is not a new investment thesis.
It is simply the one we have believed all along.
The time is NOW. Get in touch.
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CHROME TEMPLE Investments Pty Ltd ACN 640 888 026 is a corporate authorised representative (number 001284056) of SILC Fiduciary Solutions Pty Ltd ACN 638 984 602 (AFS license number 522145), who is limited to general advice and deal by arranging services to wholesale clients relating to the Mach 1 Fund only. Investment in the Mach 1 Fund is only available to wholesale clients. Prospective investors should carefully review the Mach 1 Fund’s information memorandum (IM) in full and seek professional advice prior to making any investment decision.
This is general information only and doesn’t take into account your personal objectives, financial situation, or needs. Any one thinking about making a vehicle investment should carefully review their options and seek professional advice prior to making any investment decision or vehicle purchase. No reliance may be placed on this article for any purpose. Information in this article has been prepared without taking into account the objectives, circumstances, financial situation or needs of any person, and may differ to information obtained elsewhere.
Past performance is not a reliable indicator of future performance and the expected returns of the Fund or the asset class may not occur as expected or at all. An investor’s balance in the Fund or asset class may decrease as well as increase in value. Target returns are not guaranteed and total returns may be above or below the target range.
This article reflects the author's opinions on a particular subject matter. The views expressed do not necessarily reflect the performance of the Mach 1 Fund (the “Fund”) nor reflect the opinions of the Fund’s Trustee (Specialised Investment and Lending Corporation Ltd) or their affiliates.
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