#12 Fernando Verboonen - Car Investment & Securitization

The Nalu Finance Podcast

In this episode of Nalu Finance, we sit down with Fernando Verboonen at CurioInvest to explore the growing market of collectables car investing through tokenization.

Fernando dives deep into the mechanics and appeal of investing in classic and hypercars, including:

• Why collectables like rare cars offer strong performance and diversification potential
  

• How blockchain-based tokens unlock access and liquidity for investors
  

• What makes provenance and verification essential in the collectible car market
  

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🎙️ Transcript: Fernando Verboonen: 00:06 You don't need to buy a whole car in order to invest in it, but you can start already with little in one single car.

Stefan Wagner: 00:39 I'm here with Fernando Verboonen, the co-founder and managing part of CurioInvest. for collectibles and CurioInvest helps you invest in classic cars and limited-edition hypercars starting with little. So let's jump right in. How do you actually invest in cars?

Fernando Verboonen: 00:56 Yeah, so if you're not familiar with collectibles, don't worry. Hopefully you will learn something in this podcast. What I can tell you is that clearly If you haven't invested, you're missing out. Because when you look at the performance of collectibles over the last 10 to 12 years, you see that they have outperformed other indexes. And you see that, essentially, that very few have benefited from this performance. And the reason for that is a combination, clearly, of passion. You buy an asset. You enjoy it. You enjoy the dividends of driving it. And, of course, the benefits of having a beautiful object to show and share with your friends and so on, but also just store it and maintain it maybe in a secure vault.

And you notice that the prices of these assets fluctuate over time. So when you look at these assets as an alternative investment, let's put it this way, you start coming across several properties of these assets that make it an investable asset. So you probably heard fine art, watches, even a simple example of a GMT Rolex, how it increased in price because there's more demand, there's less supply, already signals where the upside potential of collectibles is coming. Specifically for rare cars, you're looking at a combination of the provenance of the specific asset, who drove that particular asset, who owned it, of course, what kind of brand, the mechanical state of the asset, how many kilometers it was driven for, and last but not least, the beautiful design that represents that asset. When you look at the whole spectrum, you see from the pre-war era all the way to hypercars with limited edition.

This is quite a broad spectrum, but essentially what our team has helped in the past is to build collections or to advise on collections to very wealthy individuals who were looking at this as an alternative investment class. and basically what that meant was maybe having a specific mandate to collect or to put together a few museum-grade or let's say blue-chip-grade assets that in a way have some provenance that made it already to a few auctions or comparable assets made it through auctions and therefore you had a signal about that particular value. When you look at investing on your own, you can start like any other enthusiast, basically looking at that car, maybe in the lower price range.

But at the end of the day, when you see the appreciation and the investment degree capabilities, you see that it's essentially those at the higher price range that are actually taking the most wings. which of course means you need to have some liquidity and little alone that's just for one single asset which can range up to several million dollars including GTO or so. Of course, when you talk about diversification, you probably need 10, 20 cars. Do you see where this is coming?

Yeah, so over the last years, we've built a network of trusted partners and collectors. And these partners and collectors, they were convinced by our vision to open access to collectibles to everyone. and they were motivated to provide their assets to our platform in the deal flow. So while it's very challenging to have access to these collectibles, we are very glad to have partnered with a few big collectors who provide us today access to over 500 of the world's rarest cars.

Stefan Wagner: 05:25 And so if somebody wants to then, via you guys, invest into cars, At what point can he start? What's his entry level and what does he get exposure to?

Fernando Verboonen: 05:36 Yes, KURI is a very innovative concept which allows you, enables you to invest in cars starting from little. And the way it works is it's very simple. We're using, on the one hand, the latest regulatory know-how and also technology so that you can go into our platform and sign up, do your KYC and so on, and participate in two types of events. On the one hand, we call it private sale. And on the other hand, we call it public sale. So in the private sale, the goal here is to have a close contact with our end customers, where the minimum ticket is $100,000.

As you realize, this is clearly not yet for everyone, but the idea here is to secure a fraction of the assets that will then be sold publicly, so that in a way we test in a small circle whether it makes sense, if there is any interest of this asset. Assuming that there is a minimum commitment in that private sale, where you would express your interest through your banker or through your private asset manager or directly with our RN, then we will reserve an allocation in this asset and afterwards the public sale would open.

And this is the second event that takes place in our platform, that through the online website, you sign up, you do your onboarding, and then you can directly commit and pay online. And what this means is that you can pay starting from $100. And this is where it gets very attractive, because certainly, you don't need to buy a whole car in order to invest in it. but you can start already with one single car.

Stefan Wagner: 07:38 This is on a single car and what this means is that every week, every month you get per email a new asset, essentially a continuous deal flow of collectibles and by investing

Fernando Verboonen: 08:00 little in each car is not us, but you who make your diversified portfolio. I like it, yeah. And that means that we facilitate these assets that are curated. They will come prepared. There will be a review on the asset. We will then later insure it and take care of the transportation. We will do essentially the hard work, but In your email you will get a beautiful collectible and you will get to pick on that particular asset.

Stefan Wagner: 08:37 And how do I get a security in return or what is it that I actually hold against it?

Fernando Verboonen: 08:44 The way we structure this offer is essentially by providing a bond that represents the value of the collateralized asset and what that means is that we pledge this asset as soon as we acquire it on behalf of the investors who acquired this bond. And the innovative part about our project and the reason why we were considered by UBS among the top Swiss fintech’s last year and this year by McKinsey among the most innovative fintech’s is that the way you get your bond is in the form of a digital token. What this means is that it enables a new degree of transferability, of liquidity, and new parties can come in that bring additional, that enable additional business models. And this is really what's making us the most excited about it.

Stefan Wagner: 09:45 You know, that was actually my next question. You said it's transferable, so I can sell it to somebody else?

Fernando Verboonen: 09:50 Yeah, so the token, brings several properties that enable you to store it and hold possession of the token on your own. And that means you can sell it and so on. And there's several venues. You can do it peer-to-peer or through exchanges. And as we speak, most exchanges in Europe are ramping up their capabilities to bring tradability for tokens. And as pioneers, we are already partnered with a stock exchange, one of the first ones who enables that. And hopefully more partnerships will come in the near future. But what this means is that you no longer have to pick up the phone and call someone to sell this contract. You can just go into several venues where you could then trade your token and sell it for a premium. and therefore realize already some return.

Stefan Wagner: 10:56 So if I buy one of these tokens or I buy one of the bonds and I get the token in return, is there a regular valuation that comes from you or how do I judge, besides selling it, what the value of the car is or my investment?

Fernando Verboonen: 11:13 Clearly the initial price lays down the reference, so at that point the issuance price represents the value of the asset and it includes a little spread to cover maintenance and stuff like that. And after that, it becomes a free market so that the token begins trading. And CRE is one of those innovative projects that is working not only on graphing in the financial asset, through a financial asset and innovative token, a physical real car, but it's also working on the discovery of the prices.

So we have an R&D project that is essentially researching the latest action prices, latest marketplaces, for cars, and also tweets around people talking about a specific car, and in a way providing a sentiment or a reference about how exciting this particular car is. And we call it Courier Radar. And this radar is giving you kind of a signal about how hot that particular asset is at that point and so on. Ultimately, it's your decision to bid and have a price. And yeah, this will become a very interesting topic once you see maybe an action taking place where The same comparable asset was sold and then you would see a strong price signal about what particular value was for that asset.

Stefan Wagner: 12:58 So you do also, in a sense, market research for the investors so they know where they're standing with this stuff. Excellent. How do you actually make sure that you don't… I mean, there's two ones. One, there's fakes out there, particularly in classic cars, but the other thing that also I find is happening, you cut a car in half. and rebuild each half and both have the correct VIN number on some parts. And suddenly you find yourself with, for example, Porsche 2.7 RS more than they ever built, but apparently all originals.

Fernando Verboonen: 13:31 When you look at the dynamics in the secondary market, especially in the vintage, Clearly, in the hyper cards, it's very unlikely that you have that challenge. But when you look at vintage cards, then the topic about provenance becomes very relevant. And clearly, those assets that are the most rare, or the most sought after are more most prompt for forgeries and so on. So what we've done in the past, you know, researching the provenance, understanding who transacted which particular asset from hand to hand and essentially following the track all the way to as far as you can.

What we've done in the past also has been to stamp this research into a specific file, a PDF, that remains in immutable thanks to the blockchain. So once you essentially tokenize this asset, you would have also this information inside the specific asset token. And what that means is that every time this asset is transferred from their own, you would have that specific research or path track executed automatically. And that is In a way, the beauty of this novel technology is implementing.

Stefan Wagner: 15:02 Just to clarify for our listeners here, I mean, one thing we talked about is that you invest into a wrong asset token. Many have heard about Bitcoin. There's other ones out there as well. How does your version of this differentiate it and what do I actually get in the sense?

Fernando Verboonen: 15:23 Yeah, this is a very important question. When you look at the developments of this technology on the regulatory side, you see that we're facing now the 2.0 part of this chapter. In the last decade, the Bitcoin has, of course, had its fans and its haters. But what we did learn was that this new technology is disrupting the way we transact. And what we are doing at Curie Invest is essentially using the best of that technology, which is the transferability, the mutability aspects, and the best of the regulatory side, which is issuing a bond and so on. And by combining these two, you have what we call a second wave of innovation, which you call asset securitization through tokens called asset tokenization, essentially.

Stefan Wagner: 16:20 Can you walk me through a little bit through the whole investment cycle right from the beginning to the end, the holding period and how easily can I sell it again?

Fernando Verboonen: 16:31 The way that the securitization is structured is that we hold assets for five years and until that holding period ends, you can trade your asset by selling your token. And you can, of course, sell it for a premium or a discount and therefore realize your capital. Throughout this period of time, our asset is always available for sale. So if someone comes from the market and says, I want this particular car, he will have a minimum premium that he will have to pay and this premium should be already attractive for all of investors.

So we usually define it about 125% and what this means is that we would not sell the asset or look at any bids unless it reaches this premium already. And once it reaches the holding period, then we would ask all the investors, do you want to sell your asset? And if the question is yes, then we will pull all these tokens and do again, repeat the same process, the private sale, the public sale. And in the case that's not successful, then we would proceed with actually selling the car at an auction. And in that process, then we would, you know, redeem all the investors with their perception.

Stefan Wagner: 17:56 So if I get this right, you usually hold the cow, the underlying for five years. But in between, I could sell my token to somebody else if I don't want to. That's correct. Understood. Excellent. Thank you very much. Thank you so much.

Fernando Verboonen: 18:11 Enjoy the rest of the day. Have a beautiful day. Bye.