Harvard Case - Merlion Investments: Investing in Collectible Assets
"Merlion Investments: Investing in Collectible Assets" Harvard business case study is written by Philip Zerrillo, Matthew Dearth. It deals with the challenges in the field of Finance. The case study is 16 page(s) long and it was first published on : Sep 2, 2020
At Fern Fort University, we recommend that Merlion Investments diversify its portfolio by investing in collectible assets, specifically focusing on fine art and luxury watches. This move will help the company capitalize on the growing demand for alternative investments, enhance portfolio diversification, and potentially generate higher returns. We recommend a phased approach, beginning with a small allocation to these assets, gradually increasing exposure based on market performance and internal expertise development.
2. Background
Merlion Investments is a Singapore-based investment firm with a strong track record in traditional asset classes like fixed income securities and equities. However, the firm is facing increasing pressure from investors seeking higher returns and diversification, particularly in the face of low interest rates and volatile stock markets. This case study explores the potential of collectible assets, specifically fine art and luxury watches, as a new investment avenue for Merlion Investments.
The main protagonists are:
- Mr. Tan, the CEO of Merlion Investments, who is looking for new investment opportunities to enhance returns and attract new clients.
- Ms. Lee, the head of research, who is tasked with evaluating the potential of collectible assets for investment purposes.
3. Analysis of the Case Study
This case study can be analyzed using the following frameworks:
- Financial Analysis: Examining the historical performance of collectible assets, their liquidity, and potential risks.
- Investment Management: Assessing the feasibility of incorporating collectible assets into Merlion's existing portfolio management framework.
- Risk Management: Evaluating the inherent risks associated with investing in collectibles, such as valuation uncertainty, illiquidity, and potential for fraud.
- Strategic Analysis: Considering the long-term implications of this investment strategy on Merlion's competitive position and brand image.
Financial Analysis:
- Historical Performance: While past performance is not indicative of future results, historical data suggests that fine art and luxury watches have outperformed traditional asset classes in certain periods, particularly during times of economic uncertainty.
- Liquidity: Collectible assets are generally considered illiquid, meaning they can be difficult to sell quickly and at fair market value. This illiquidity poses a risk for investors seeking short-term returns.
- Valuation: Valuing collectible assets can be challenging due to the subjective nature of their worth. This can lead to significant price fluctuations and potential for fraud.
Investment Management:
- Portfolio Diversification: Collectible assets can offer diversification benefits by providing low correlation with traditional asset classes, potentially reducing overall portfolio risk.
- Investment Strategy: Merlion needs to develop a clear investment strategy for collectible assets, including asset selection criteria, risk management procedures, and exit strategies.
- Expertise: Building internal expertise in collectible asset valuation, market trends, and legal considerations is crucial for successful investment.
Risk Management:
- Valuation Uncertainty: The subjective nature of collectible asset valuation presents a significant risk, as prices can fluctuate wildly based on market sentiment and expert opinions.
- Illiquidity: The illiquidity of collectible assets can make it difficult to exit investments quickly, especially during market downturns.
- Fraud and Counterfeiting: The market for collectible assets is susceptible to fraud and counterfeiting, requiring careful due diligence and authentication procedures.
Strategic Analysis:
- Brand Image: Investing in collectible assets could enhance Merlion's brand image as a sophisticated and innovative investment firm, attracting a wider range of clients.
- Competitive Advantage: Merlion can gain a competitive advantage by offering unique investment opportunities in collectible assets, differentiating itself from competitors.
- Long-Term Growth: Investing in collectible assets could contribute to Merlion's long-term growth by tapping into a growing market with significant potential.
4. Recommendations
- Phased Approach: Begin with a small allocation to collectible assets, gradually increasing exposure based on market performance and internal expertise development. This allows Merlion to manage risk and gain experience before committing significant capital.
- Focus on Fine Art and Luxury Watches: These asset classes offer a balance between potential returns and relative liquidity compared to other collectibles.
- Develop Internal Expertise: Hire or train specialists in collectible asset valuation, market trends, and legal considerations. This ensures informed decision-making and mitigates risks.
- Establish Clear Investment Criteria: Define specific criteria for selecting collectible assets, including historical performance, market demand, and authentication procedures.
- Implement Robust Risk Management: Develop a comprehensive risk management framework to address valuation uncertainty, illiquidity, and fraud risks.
- Partner with Specialists: Collaborate with reputable art dealers, auction houses, and watch experts to access specialized knowledge and market insights.
- Transparency and Disclosure: Communicate the investment strategy and associated risks clearly to investors, ensuring transparency and informed decision-making.
5. Basis of Recommendations
- Core Competencies and Consistency with Mission: This recommendation aligns with Merlion's mission to provide innovative investment solutions and enhance client returns.
- External Customers and Internal Clients: This strategy caters to the growing demand for alternative investments and diversification, attracting new clients and meeting existing investors' needs.
- Competitors: This strategy allows Merlion to differentiate itself from competitors by offering unique investment opportunities in collectible assets.
- Attractiveness: While potential returns are uncertain, the historical performance of collectible assets suggests potential for outperformance.
- Assumptions: This recommendation assumes that the market for collectible assets will continue to grow and that Merlion can develop the necessary expertise to manage these investments effectively.
6. Conclusion
Investing in collectible assets, specifically fine art and luxury watches, presents a compelling opportunity for Merlion Investments to diversify its portfolio, enhance returns, and attract new clients. By implementing a phased approach, developing internal expertise, and managing risks effectively, Merlion can capitalize on the growing demand for alternative investments and secure its long-term growth.
7. Discussion
- Alternative Options: Merlion could consider investing in other collectible assets, such as rare coins, stamps, or vintage cars. However, these assets may have higher liquidity risks and require specialized expertise.
- Risks and Assumptions: The key risks associated with this recommendation include valuation uncertainty, illiquidity, fraud, and the potential for market downturns. The success of this strategy depends on Merlion's ability to develop the necessary expertise, manage risks effectively, and navigate market fluctuations.
8. Next Steps
- Market Research: Conduct thorough market research to identify specific collectible assets with potential for growth and liquidity.
- Expertise Development: Hire or train specialists in collectible asset valuation, market trends, and legal considerations.
- Risk Management Framework: Develop a comprehensive risk management framework to address valuation uncertainty, illiquidity, and fraud risks.
- Pilot Program: Implement a pilot program with a small allocation to collectible assets to test the strategy and gain experience.
- Investor Communication: Communicate the investment strategy and associated risks clearly to investors, ensuring transparency and informed decision-making.
- Performance Monitoring: Continuously monitor the performance of collectible assets and adjust the investment strategy as needed.
By taking these steps, Merlion Investments can successfully navigate the world of collectible assets and achieve its goals of diversification, enhanced returns, and long-term growth.
Hire an expert to write custom solution for HBR Finance case study - Merlion Investments: Investing in Collectible Assets
more similar case solutions ...
Case Description
The case describes a fictitious family office (FO), Merlion Investments, and the efforts of a junior family member, Leong Yew Kong, to convince his uncle and his grandfather to make an allocation to collectible assets. Similar to many family offices, Merlion Investments pursues a relatively conservative investment strategy; only 20% of its assets are allocated to riskier opportunities designed to grow the family's wealth. Yew Kong, who has worked diligently under his uncle's guidance for years, wants more responsibility. After doing his own research, Yew Kong believes he has identified an opportunity to carve out his own niche in the portfolio by investing in collectibles. The case is constructed to illustrate the real-world challenge of investing in non-traditional assets, in this instance, collectibles. Background information on five different collectible assets is provided in the case that students can use to discuss a) whether his uncle, Tan Chee Keong, and Merlion Investments should agree to Yew Kong's suggestion, b) which collectibles to invest in and through what vehicle, c) how much capital to allocate, and d) what kind of skills or expertise the team would need to successfully manage these investments.
🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart Write my custom case study solution for Harvard HBR case - Merlion Investments: Investing in Collectible Assets
Hire an expert to write custom solution for HBR Finance case study - Merlion Investments: Investing in Collectible Assets
Merlion Investments: Investing in Collectible Assets FAQ
What are the qualifications of the writers handling the "Merlion Investments: Investing in Collectible Assets" case study?
Our writers hold advanced degrees in their respective fields, including MBAs and PhDs from top universities. They have extensive experience in writing and analyzing complex case studies such as " Merlion Investments: Investing in Collectible Assets ", ensuring high-quality, academically rigorous solutions.
How do you ensure confidentiality and security in handling client information?
We prioritize confidentiality by using secure data encryption, access controls, and strict privacy policies. Apart from an email, we don't collect any information from the client. So there is almost zero risk of breach at our end. Our financial transactions are done by Paypal on their website so all your information is very secure.
What is Fern Fort Univeristy's process for quality control and proofreading in case study solutions?
The Merlion Investments: Investing in Collectible Assets case study solution undergoes a rigorous quality control process, including multiple rounds of proofreading and editing by experts. We ensure that the content is accurate, well-structured, and free from errors before delivery.
Where can I find free case studies solution for Harvard HBR Strategy Case Studies?
At Fern Fort University provides free case studies solutions for a variety of Harvard HBR case studies. The free solutions are written to build "Wikipedia of case studies on internet". Custom solution services are written based on specific requirements. If free solution helps you with your task then feel free to donate a cup of coffee.
I’m looking for Harvard Business Case Studies Solution for Merlion Investments: Investing in Collectible Assets. Where can I get it?
You can find the case study solution of the HBR case study "Merlion Investments: Investing in Collectible Assets" at Fern Fort University.
Can I Buy Case Study Solution for Merlion Investments: Investing in Collectible Assets & Seek Case Study Help at Fern Fort University?
Yes, you can order your custom case study solution for the Harvard business case - "Merlion Investments: Investing in Collectible Assets" at Fern Fort University. You can get a comprehensive solution tailored to your requirements.
Can I hire someone only to analyze my Merlion Investments: Investing in Collectible Assets solution? I have written it, and I want an expert to go through it.
🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart Pay an expert to write my HBR study solution for the case study - Merlion Investments: Investing in Collectible Assets
Where can I find a case analysis for Harvard Business School or HBR Cases?
You can find the case study solution of the HBR case study "Merlion Investments: Investing in Collectible Assets" at Fern Fort University.
Which are some of the all-time best Harvard Review Case Studies?
Some of our all time favorite case studies are -
Can I Pay Someone To Solve My Case Study - "Merlion Investments: Investing in Collectible Assets"?
Yes, you can pay experts at Fern Fort University to write a custom case study solution that meets all your professional and academic needs.
Do I have to upload case material for the case study Merlion Investments: Investing in Collectible Assets to buy a custom case study solution?
We recommend to upload your case study because Harvard HBR case studies are updated regularly. So for custom solutions it helps to refer to the same document. The uploading of specific case materials for Merlion Investments: Investing in Collectible Assets ensures that the custom solution is aligned precisely with your needs. This helps our experts to deliver the most accurate, latest, and relevant solution.
What is a Case Research Method? How can it be applied to the Merlion Investments: Investing in Collectible Assets case study?
The Case Research Method involves in-depth analysis of a situation, identifying key issues, and proposing strategic solutions. For "Merlion Investments: Investing in Collectible Assets" case study, this method would be applied by examining the case’s context, challenges, and opportunities to provide a robust solution that aligns with academic rigor.
"I’m Seeking Help with Case Studies,” How can Fern Fort University help me with my case study assignments?
Fern Fort University offers comprehensive case study solutions, including writing, analysis, and consulting services. Whether you need help with strategy formulation, problem-solving, or academic compliance, their experts are equipped to assist with your assignments.
Achieve academic excellence with Fern Fort University! 🌟 We offer custom essays, term papers, and Harvard HBR business case studies solutions crafted by top-tier experts. Experience tailored solutions, uncompromised quality, and timely delivery. Elevate your academic performance with our trusted and confidential services. Visit Fern Fort University today! #AcademicSuccess #CustomEssays #MBA #CaseStudies
How do you handle tight deadlines for case study solutions?
We are adept at managing tight deadlines by allocating sufficient resources and prioritizing urgent projects. Our team works efficiently without compromising quality, ensuring that even last-minute requests are delivered on time
What if I need revisions or edits after receiving the case study solution?
We offer free revisions to ensure complete client satisfaction. If any adjustments are needed, our team will work closely with you to refine the solution until it meets your expectations.
How do you ensure that the case study solution is plagiarism-free?
All our case study solutions are crafted from scratch and thoroughly checked using advanced plagiarism detection software. We guarantee 100% originality in every solution delivered
How do you handle references and citations in the case study solutions?
We follow strict academic standards for references and citations, ensuring that all sources are properly credited according to the required citation style (APA, MLA, Chicago, etc.).