The Australian Financial Review looks at how the wealthy are making money for our column, How the rich invest.
Tony Denny can't wait for China to open up its market to expensive vintage cars.
Denny, a BRW Rich Lister who made his fortune buying and selling cars across Europe with his AAA Auto dealership, is now settled on the NSW Central Coast, but is still wheeling and dealing.
He has established the Gosford Classic Car Museum to house his own extensive collection of automobiles, which is getting up to 2000 visitors a month, and is also trading at least 15 pricey vintage cars a month around the world.
Denny will typically buy the cars at auction in Europe and then sell to wealthy car enthusiasts in Asia, making a good profit in the process.
In November, he attended the Sothebys Duemila Ruote auction in Milan – the largest automotive-themed collection sale ever held in Europe.
Denny bought six cars to re-sell into the Asian market, including a 1966 red alloy 275 Ferrari, one of only eight ever produced, for €3.416 million ($4.69 million), and a 1994 blue Bugatti EB110 GT for €616,000.
The Ferrari was the most expensive car sold at the auction and the Bugatti was in the top 10.
Tax-effective investment
Denny told The Australian Financial Review that wealthy individuals and families were increasingly looking at vintage cars as a tax-effective investment.
"If you fulfil certain criteria in most tax regimes around the world, the capital gains on classic cars is tax exempt – which is one of the factors driving the price growth worldwide."
Price increases have been good in recent years and Denny said a big opportunity existed whenever wealthy Chinese were able to buy and import the vintage vehicles. "If and when China opens its doors to classic cars, the price growth is expected to be considerably higher than it is today."
Denny floated AAA on the Prague and Budapest stock exchanges in 2006 after establishing it in Prague after losses from the 1987 sharemarket crash led him to seek opportunities overseas. He sold up in 2014 to Polish private equity group Abris Capital Partners.
He still holds a stake in AAA, which last year had its second-highest profit result, recording earnings before interest and tax, depreciation and amortisation of about €34 million.
Denny is also finding success undertaking some property developments via his specialist property developer Central Real. His first 54-apartment project, Vue, sold out in about two months, and another, Marina, is almost sold out.
A third project, Scenic, launched last Saturday with 21 apartments sold on the day.
Denny has a further six projects nearly ready to launch and is looking to buy more development sites on the Central Coast, Newcastle and Sydney's upper north shore.
