Investing in watches and other luxury goods through Konvi

Contents · 3 sections

1. What is Konvi?
2. Which assets can you invest in on Konvi…
3. How do you invest and sign up on…

More and more people want to protect their savings from inflation and grow their wealth over time, so topics like financial literacy and investing are getting a lot more attention.

Besides the traditional options of stocks, bonds and funds, small and first-time investors are increasingly interested in so-called alternative assets. They are a popular way to diversify a portfolio and often include watches and other luxury goods. Alternative assets are usually less liquid than traditional ones, but they can offer high returns.

These markets are no longer reserved for the big players, but smaller investors still face two main limits. First, buying luxury watches and other alternative assets as an investment requires real knowledge of the products. Expertise helps you pick luxury goods whose price is likely to rise and pay off in the future.

The second limit is access. Exclusive watches are hard to find, and their prices start at several hundred thousand euro.

A European start-up has set out to remove these limits and open up alternative assets to everyone. Below we look at what Konvi is and how the platform works.

IMPORTANT: before we go any further, this article is not investment advice. Do your own thorough research and weigh the risks before you invest through Konvi or any similar platform.

What is Konvi?

Konvi is a European start-up whose mission is to open up the market for alternative assets, so that smaller investors can also add rare luxury goods to their portfolios. How does that work?

The main idea behind the platform is crowd-owning. Put simply, one item can be owned in part by many investors. The advantage is a much lower starting investment to become a co-owner. With Konvi the minimum is 250 €, which makes investing in luxury watches and similar goods far more accessible.

At the moment the platform offers exclusive watch models and spirits. The founders plan to add other exclusive goods with potentially high returns in the future.

The platform launched on 1 July 2020 in Berlin. According to Crunchbase, the company has received investment from Invest Northern Ireland (1 March 2021) and APX (1 September 2021), with undisclosed amounts. The team is small and young, and the platform has not yet proven itself over time. That makes Konvi a risky investment for now, but the model is innovative. I have invested a small amount myself to test it.

Which assets can you invest in on Konvi and how are they selected?

Konvi lets you become a co-owner of high-end luxury watches with a minimum price of 100,000 €. A logical question is how exactly Konvi picks rare luxury watch models that are likely to bring a high return in the future.

To do this, the platform works with The WatchFund, a well-known fund set up by watch expert Dominic Khoo in 2013. The fund gives its investors access to limited and rare watches.

The models it selects fall into several groups: hard-to-get and very limited models, exclusive watches bought before they reach the market, models with historical value, and "undervalued" watches whose price is expected to rise.

The expected return of The WatchFund is 20% a year, according to the fund. Keep in mind that this is a forecast based on all the years since the fund was set up. So far its lowest annual return has been 11%. For example, an FP Journe Resonance bought in 2016 for 53,900 Singapore dollars was sold for 150,000 Singapore dollars in 2020. Remember that every investment carries risk and this return is not guaranteed.

The fund has a network of more than 9,000 collectors who buy watches directly from its investors. Because the minimum investment in The WatchFund is 250,000 €, its client base is limited to very wealthy people.

The partnership between Konvi and The WatchFund gives investors on the start-up platform access to these watches without having to invest a quarter of a million euro.

Investors on the platform can also diversify their portfolio with investment wines. To offer carefully selected fine wines, Konvi works with Cult Wines. Founded in the UK in 2007, the fund invests in premium, carefully selected wines, with a minimum investment of £25,000. Konvi users can become co-owners of such wines for a much smaller amount. Cult Wines' historical return is 8.9% a year, and the holding period before an asset is sold ranges from 1 to 10 years.

How do you invest and sign up on Konvi?

To invest through Konvi, you first download the app and go through a few basic steps to verify your profile (you can also sign up on their website). When you register, you can enter a code that gives you extra benefits. You can sign up through this link https://konvi.app/refer-and-earn/?code=K4Z83E or use the promo code K4Z83E to get a 10 € bonus on your first investment.

Once registered, you get access to the platform and can see the assets currently being crowdfunded. You will not know the exact model in advance, but you will see all other details: its price, the expected return, how long it will be held before it is sold and so on.

There is one more thing to understand about how the platform works. You and all other verified co-owners put in capital to buy the chosen asset. Once the funding target is reached, you get an official notice in the Konvi app.

As soon as the crowdfunding closes, you become a shareholder in a company (SPV) whose purpose is to own, manage and sell the asset. Your share in the company depends on how much you invested. As mentioned, the minimum investment is 250 €.

The asset then legally belongs to all shareholders who took part in the campaign, while it is bought, stored safely and insured with Konvi's partners.

Next comes the so-called appreciation period. When it ends, the watch is sold, hopefully at a higher price. That is when all shareholders get their return.

That, in short, is how Konvi works. Its big advantage is that it turns luxury watches into an asset anyone can add to their portfolio. If this has caught your interest, study the platform's requirements and how it works in detail, and weigh the risks of your investment carefully. The company is still new and has yet to prove itself.