There is now a hedge fund dedicated exclusively to Hermès bags — with investors also getting first pick for resales. The unlikely business was launched by a luxury asset investment company earlier this year and currently focuses on the Birkin and Kelly bags. Luxus opted to skip typical assets — such as stocks or gold — to acquire and sell the luxury items and deliver steady returns.
According to a Forbes report, the initial fund by former Blackstone executive Dana Auslander raised $1 million in May. It realised a 34% return on investment — with a 43-day average resale timeline amidst overwhelming demand. The venture backed by Christie’s had soon created a second fund that raised a whopping $2 million. The funds have functioned mostly through word of mouth.
How does it work?
“My thesis is very simple: The investor and the collector are the same person, so you have to cater to them in the same way, and they want to be able to also invest in the assets that they collect, whether it’s art, whether it’s jewels, whether it’s Hermès. Trust me, a lot of people collect Hermès,” Auslander told Forbes.
A hedge fund dedicated to investing in luxury bags would typically pool investor money to buy authentic items (in this case Hermès Birkin and Kelly handbags) and consider them to be financial assets. These bags are insured and stored until resale — typically at a higher price due to their their rarity, craftsmanship, and strong demand. Investors own equity in the portfolio rather than the physical bags themselves, but also get first dibs on the purses if they wish to make a purchase.
How valuable is a Hermèsbag anyway?
Hermès bags have become strong investment assets in recent years — with a starting price of at least $12,000. But the supply is carefully controlled by the brand and secondary market prices for both Kelly and Birkin bags can be approximately two or three times the retail amount. Rare or limited edition Hermès bags can exceed $100,000 in resale prices.