Sports Card Private Equity Investments
What are alternative tangible assets?
What makes a Collectible an Investment?
What Makes Trading Cards an Investment?
The Emergence of an Efficient Marketplace
eBay not only provided a platform for purchasing trading cards but for the first time individuals had the opportunity to sell their trading cards at market value putting them on even footing with dealers and card shops. Up to that point if an individual wanted to sell a card or collection the most liquid source were existing dealers or card shops that would only offer to purchase the assets at a fraction of their value. eBay also provided real time valuation of assets since anyone could see what an auction ended at. While eBay was the first large marketplace numerous other marketplaces and platforms have emerged. These range from marketplaces that resemble a stock market like thepit.com, StarStock and dibbs to Collectable and Otis that allow an individual to buy a share in some of the rarest and most highly valued cards and collectibles.
3rd Party Grading and Authentication
In 1991, Collectors Universe, a company that had been grading and authenticating coins under the subsidiary Professional Coin Grading Service (PCGS) launched Professional Sports Authenticator (PSA) to grade and authenticate trading cards. The authenticating and grading of cards is extremely important when purchasing cards online and also resulted in creating multiple pricing tiers for the same card based on grade. There are currently two other major grading companies, Beckett Grading Services (BGS) and Sportscard Guaranty (SGC) and there is a serious attempt from some other newly created companies to try and gain a foothold in this space.
The primary factor cited for the crash in trading card values in the late 1980’s and early 1990’s was overproduction. Each sport had cards produced by multiple companies, and these companies had multiple product lines. The reaction to increased demand was to simply increase supply. Ultimately, supply shot past demand, driving values down which then led to a decrease in demand. In today’s market, each major sport has a licensing agreement with one manufacturer. While there are still multiple product lines almost all allow for the estimation of the amount of product produced. This is due to almost all product containing serial numbered cards with the odds of one of these serial numbered cards being in a pack or box are stated on the product.
Thinking about investing in trading cards…
Meet Attic Investments
The Modern Wax Fund
Paving the Way
When Attic Investments launched back in 2019, the trading card, collectibles and alternative assets’ environment was much different than the one we are immersed in currently. At the time most of the general public still viewed trading cards through the lense of the junk wax era and were unaware of the many changes and improvements that laid the foundation for trading cards resurgence. It is safe to say that in 2019 you likely would not hear the words private equity fund, venture capital or angel investor in a conversation between those involved in the industry.
Fast forward to today, it is hard to miss articles on trading cards, mentions on CNBC or new platforms and technology moving into the space. The COVID pandemic is the primary reason cited for this tremendous growth. Individuals found themselves quarantining at home with extra time on their hands. Some went through their closets/attics and physically reconnected with trading cards while others stumbled upon sports cards trying to fill the void that the absence of professional sports left. Many quickly realized that this was a much more efficient, transparent, attractive and active market than they thought and a market that also offered a much improved product that included game used material, autographs, serial numbers and grading. It certainly also helped that this already was a market set up primarily to operate online and through the mail. Those that were already participating in trading cards as investments are generally not surprised to see the prices and popularity of trading cards today, it is the speed at which it occurred that is surprising. Nothing has changed from Attic Investments perspective, the belief that trading cards, if packaged correctly, can be a legitimate asset class that could eventually attract institutional money is still the foundation of the company.
Having experience in institutional portfolio management, Attic Investments founder understands that these investment decisions are made based on quantitative data and until there is significant enough data available, it is not possible for institutions to realistically assess an allocation to an asset class. Therefore, one of Attic Investments goals is to make public and be as transparent on as much information and data as possible. Certain structures such as The Modern Wax Fund’s quarterly valuation data are released to the public at the same time it is being sent to the investors. On other funds or vehicles with more of an active strategy, this timeline and level of detail could materially affect future performance. The goal is to eventually make all of this information public but in a way that doesn’t compromise Attic Investments fiduciary duty to investors.
Fee Structures and Promotes that put the Investor First
Attic Investment’s fee structures and promote are closely tied to the performance and returns to the investors. Attic Investments believes that investors in this asset class are pioneers and it would not be fair to derive material income from any investment vehicle if the investors are not also materially benefiting. Management Fees will not be a profit center and will be based on the realistic costs to provide the appropriate level of professional oversight and management. Attic Investments is and will continue to be an investor in any fund or vehicle it is involved in. The bottom line is that Attic Investments is willing to put its money where it’s mouth is.
Investment Management Services
Future Private Equity Funds
Interested in partnering for a future private equity fund?
Transform an Existing Collection
Turn your existing collection of trading cards, collectibles or any other tangible alternative assets into a private equity fund.
Attic Investments can assist in your estate planning to ensure your valuable collection is handled properly.
Attic Investments can help investors create liquidity while still maintaining significant ownership.