Anchorage Capital Partners Ltd. Moves closer to Launching 'The Guitar Fund' to Invest in Rare and Vintage Guitars

Anchorage Capital Partners Ltd. Moves closer to Launching 'The Guitar Fund' to Invest in Rare and Vintage Guitars

LONDON, June 12/PRNewswire/ -- Anchorage Capital Partners ("ACP") (a Mercantile Investment
Group company) recently reported to the Financial Times that it is preparing
to launch a closed-end fund which will invest in the rare and vintage guitar
market. The US$100 million fund is to be listed on the Channel Island Stock
Exchange (CISX) in Euros for a 10-year term.

According to ACP, the vintage guitar market has comfortably
outperformed traditional markets ever since it has been tracked by an index
created by Vintage Guitar magazine in 1991. "The '42 Index' which is widely
accepted as a conservative tracking device for the vintage guitar market, has
demonstrated an average annual return of over 31% since it began 17 years
ago," said Tommy Byrne, co-founder of ACP and Chief Investment Officer of the
Fund. He went onto say, "Historically, when the major markets have collapsed,
this market has plateaued until the traditional markets picked up again."

Currently the Fund has a number of institutional investors
interested in subscribing for shares of the Fund in amounts between US$5
million and US$10 million each, though this is contingent on finding a
qualified Lead Investor. Valerio D'Arco, a Senior Associate at ACP said "Most
of the interest we are seeing is being generated from the wealth management
divisions of private banks, family offices and fund of hedge funds. We are
also beginning to see more interest from High Net Worth Individuals who want
to take advantage of being able to invest some of their retirement money into
a listed security."

With many vintage guitar models trading well over US$250,000,
ACP doesn't see the market being driven up simply by the Baby Boomer
generation. The Company views generations X and Y as a major part of the
equation. Mr. Byrne explains, "The vintage guitar market, like some of the
other exotic investment strategies such as art and wine funds can be enjoyed
while holding them, but where this market differs significantly is in how the
guitars improve every time you play them. The vibrations on the wood improve
the sound of the guitars, so the more they're played the better they sound.
The younger generation knows this and has an increasing appetite for
acquiring their favourite models. After all, that Monet hanging on the wall
doesn't improve every time someone looks at it."

The Fund has structured a lending strategy that will allow
investors to borrow the guitars so they will continue to be played and
enjoyed. The Fund will also lend guitars out to well-known musicians for
tours, TV and movie spots adding value to the investment as it obtains
memorabilia status.

Dr. Bernard A. Wagenmann, also a co-founder of ACP, emphasized
that "...though this exotic strategy has proven to be a tremendous
investment, investors cannot expect the same type of liquidity as in the
stock and bond markets, which is why potential investors should view this as
a long term investment strategy."

The Fund also benefits from an advisory board of guitar
experts, private equity managers and professional musicians, one of which is
Elliott Randall, best known for his lead guitar work with the band Steely Dan
on mega-hits including Reelin' In the Years. Another professional musician on
the Board, Robbin Thompson, once the lead singer for the Bruce Springsteen
band Steel Mill, commented, "Since so many passionate collectors are unlikely
to ever sell their own stash of vintage guitars, this fund helps prevent them
from taking their investment to the grave."

http://www.anchorage-capital.com

Source: Anchorage Capital Partners Ltd

Contact details: Thomas R. Byrne, Dir. +44(0)20-7409-0711, Mob. +44(0)788-777-3300

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