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The Fund: Genesis

CHROME TEMPLE
May 15, 2024
Why & How We Started CHROME TEMPLE, By Lex Pedersen

My Journey From Emotional Investment
Most “outside the square” businesses are born from an identified “need” or “want” coupled with a series of hairbrained ideas to solve said problem, frustration, or opportunity. For CHROME TEMPLE, the genesis spawned from identifying opportunities that held elements from both the needs and wants buckets from my own personal interests.

In many ways, all the jobs I’ve held and businesses I’ve started have been a ruse, a way for me to justify my real interest – cars. I have marked very nearly every professional milestone with a car – a leadership role saw a big block 69 Camaro in the garage, when Billabong took its first minority stake in SurfStitch, I commemorated it by investing in a manual M3. I remember years based on the cars I bought.

From Passion To Profit
Now that you know this about me, it shouldn’t come as any surprise that since my very first full-time job (when I was 12) I spent a good deal of my earnings investing in cars. Others invested in markets and properties, I invested in a GT Falcon, a manual BMW M3, and much later a Lamborghini Diablo VT - the calibre of the investment growing with my earnings income and sophistication of my expertise. Future purchases were plentiful with highlights such as Porsche 997 GT3RS, Ferrari F355, 66 Corvette, Porsche 911 3.2 and several more. Some remain, some were set free for a yield.

Realising Hobbyist Limitations
Over the course of my life in the pursuit of investing in cars, I amassed a nice return. Nicely as I did from these endeavours, it was done largely out of sport and the thrill of the chase. Too few hours existed in the day to chase good deals, stay on top of what’s on offer, research the next buy, etc - meaning much of my investing was emotional and sporadic. But, from this experience I took note of how potent this investment class could be if it became a dedicated focus.

The Eureka Moment: Uncorrelated Returns & Intrinsic Value
I didn’t get serious about investing in cars until the shares I owned in a business I founded crashed in a spectacular fashion and with it, a very significant portion of my net worth. When it all happened a colleague asked me what I was planning to do. I didn’t have an answer at the time, so all I could manage to say was “if only shares were like cars, they’d still have some value.” And that, that moment was it, particularly with the contemporary topic of climate change, European Emissions legislation and the next automotive revolution afoot. The proverbial light bulb went on. Game on, now is the time.  

For someone who believes strongly that we have an obligation to make vehicle investment accessible to every type of collector and investor, you might say that I went about things ass about. We didn’t start by launching a car fund. We started by launching a car storage business.

Why Did We Start With Storage?
As collectors and enthusiasts, we want to maximise the quality and quantity of time we (and our clientele) spend enjoying our beloved automotive artworks. Enter CHROME TEMPLE Storage, a butler-esque service that stores, maintains, and holds cars ready for the spur of the moment opportunities for owners to enjoy. Our first site launched in early 2019 amidst COVID-19, lockdowns, and deep uncertainty as to where the world was headed. We built a strong name and brand whilst we developed a small community of like-minded enthusiasts.

But why did we start with the storage business? Because, from personal experience, extensive research, and years validating the asset class, I found that underestimating the cost of storage and preservation is a returns killer. Further, once the physical infrastructure was in place (and proven), we could turn our attention to a want and opportunity, the CHROME TEMPLE Mach 1 Fund.

The Launch Of The Fund - A New Alternative Asset Class
In a volatile world of uncertainty and fickle investment returns, we identified what we knew would be an incredible alternative asset class – automotive art. Now 30 months in (since our May 2021 launch), our thesis has been proven, our results are strong, our process and compliance pressure tested and our SMSF and personal investment community ever expanding and enjoying this new asset class. With ~20 assets currently in the fleet, we have enjoyed strong uplift from using a blend of data and experience to buy well, hold well and sell back into market well to give a balanced return of both accrued and realised uplift. Our external, independent and alternating valuation process is continually validated with the majority of sales transacting above current valuations.

Community-Backed Retail Channel
The Fund gave us another feather in our cap and another advantage – a captive, vetted community. A community that buys and sells cars. A community that understands the worth of these assets in both financial and emotional terms. And with that community, we successfully launched our most recent ecosystem addition - our retail division. Through our retail division, we provide the Fund, our investor community and fellow enthusiasts a channel to invest (and divest) automotive artworks. Be that investment emotional, financial or a bit of both, we aim to deliver the most premium experience in the game.

Join Our Automotive Art Movement
As we dive into 2024, our 5th year of operation, we can’t help but feel we are still at the mere tip of our iceberg potential.

We look forward to investing in Automotive Art with you.

Lex Pedersen
January, 2024

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Continue Reading:
The Fund Intro 01: Objective
The Fund Intro 02: Investment Thesis
The Fund Intro 03: Acquisition Strategy
The Fund Intro 04: Fund Structure
The Fund Intro 05: Governance & Oversight
The Fund Intro 06: Information Memorandum

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