22
STAMPS
By far and away the biggest operator in the
rare stamps market is Stanley Gibbons, and
they have used their size and scale to create
the first investment products for rare stamps.
These are not collective investment schemes
– investors’ funds are not pooled in any
way. According to Stanley Gibbons, each
investor has their own individual portfolio
of rare assets, selected according to their
own personal investment objectives by
their appointed Investment Portfolio
Manager. There is no securitisation in any
way – investors still own tangible assets
that they can even take possession of if
they wanted to. Even if Stanley Gibbons
were to go out of business, investors would
still own their stamps. The flip side with
this investment structure is that it is still
unregulated – there is no recourse to the
FSCS or FOS if something were to go wrong.
Stanley Gibbons currently have three
different investment offerings:
FLEXIBLE TRADING PORTFOLIO
This gives investors access to the rare
stamp market whilst also providing greater
flexibility. Stanley Gibbons put the initial
portfolio together, and the investor receives
regular ongoing advice on their options from
a Investment Portfolio Manager. Investors
have discretion over when they want to buy
and sell stamps, and can choose whether to
re-invest, with all transactions undertaken
by Stanley Gibbons. The minimum initial
investment is £15,000 and investors can
add to their portfolio at any time they wish.
There is no tie-in period and investors can
buy and sell individual stamps depending on
their performance. The longer the investor
holds their portfolio the greater their share
of the profit, which ranges from 30-80%:
Up to 1 year - 30% of the profit
1 to 3 years – 50% of the profit
3 to 5 years – 70% of the profit
Over 5 years – 80% of the profit
The risks are very similar to the open
market. Investors need to be knowledgeable
to be able to choose the right time to
sell. But they do have access to Stanley
Gibbons’ expertise when they purchase
their portfolio and access to a very
deep market when they come to sell.
PRODUCT DEVELOPMENT
In addition Stanley Gibbons provide
free storage, valuations and insurance
during the term of the investment.
CAPITAL GROWTH PLAN
The minimum investment is £15,000 (no
maximum) and investors commit for a period
of 5 or 10 years, although they can sell after
a minimum 1 year period should they wish
(splitting any profits 50/50). At the end of
the term, the portfolio is sold and Stanley
Gibbons take 20% of the profit. The portfolio
is selected for the investor by Stanley
Gibbons’ experts and should be a diverse,
well-balanced portfolio that is tailored to the
investors’ needs. The portfolio can include
a mix of investment grade collectibles
including rare stamps, coins, military medals
and historical signatures. Again storage,
insurance and valuations are free. This is a
very ‘hands-free’ investment, but investors
have to be prepared to have their money
tied up for a significant amount of time.
PORTFOLIO BUILDER
Investors commit to an initial payment of at
least £1,000 and then monthly contributions
of at least £100. Investors receive guidance
and recommendations on what to buy and
sell from Stanley Gibbons, but have the final
say on all decisions. There is no tie-in period,
so this is another very flexible option. Stanley
Gibbons source the stamps, buy the stamps
and also sell the stamps on behalf of the
investor, with profits on each sale split 50/50.
There is also a premium portfolio builder
option, which is very similar in most aspects
but with higher investment levels, and better
benefits. The minimum initial investment
is £10,000 (plus £1,500 per quarter) and
the investor keeps 70% of the profit.
These are the only three investment products
in the rarities market for stamps and coins.
Other collectible specialists such as Spink
(spink.com), Baldwins (baldwin.co.uk),
DR&A (
and
Philatelic Investor (
.
com) offer advice on building portfolios
of stamps and coins. These firms do not
offer products in the same way as Stanley
Gibbons, but do offer adviser-broker-dealer
services, using their specialist knowledge
and market contacts to help their clients
build suitable investment portfolios.
It is often pointed out by smaller dealers
that Stanley Gibbons purchase prices
are higher than their competitors – but
they defend this by stating that they
guarantee authenticity, have very high
quality supporting material for each item
and provide investors with access to the
deepest markets for rare stamps and coins.
For investors wanting to access the rare
stamp market through more traditional
structures they could consider collective
investment schemes or trading companies.
Heritage Trading Limited (HTL) has recently
been formed as an Enterprise Investment
Scheme (EIS) qualifying company, providing
excellent tax benefits to investors.
Investment options are limited for investors.
Another way to get access to the asset
class, other than investing directly or
through one of Stanley Gibbon’s products,
would be to invest in the shares of some
of the collectible companies. Stanley
Gibbons and Avarae (a coin dealer) are
both listed on the London Stock Exchange
(LSE) (and are therefore SIPP or ISA
eligible as well). This gives exposure to
the businesses themselves, rather than a
pure exposure to specific tangible assets.
“When it comes to stamp
investment, primarily you are
looking to safeguard your wealth
and produce a profit; with the
many subtle nuances to be taken
into account there are many
pitfalls for the novice. We advise
that you speak to an expert
about your financial aims and be
guided by them on the selection
of items for your portfolio.”
Keith Heddle, Stanley Gibbons
Investments
