Christie's is backing a hedge fund for handbags. The luxury asset manager LUXUS is rolling out two funds investing in Birkin and Kelly bags   after the first one sold out in May. LUXUS founder Dana Auslander joined Bloomberg Open Interest to talk about the investment vehicle.

Paris

A hedge fund based in Paris is acquiring Hermès Birkin and Kelly handbags, treating them as alternative investment assets similar to real estate or classic car funds. The fund sources bags from the resale market, ranging from brand new to well-used 'beater' bags, and sells them on platforms like Sotheby's and Christie's, as well as through in-person experiences.

The fund, managed by experienced asset managers, has reported strong returns and significant investor interest, with plans for global expansion and potential diversification into other luxury assets. Storage and authentication are handled by a specialized partner, and the fund is responding to changing market trends, including increased demand for used bags among younger buyers.

The hedge fund built on Hermès bags

It's just like a real estate fund. I mean we're buying brand new Perkins and Kelly's. We are you know putting them in a portfolio. We have a whole portfolio construction methodology. We're using most of the bread and butter bags that are flipping over fast. And we're then selling them and we're selling them both on digital marketplaces. So Sotheby's first dibs my Gemma Christie's has just did an auction of a pink crocodile. And we're also selling them in real life experiences. Experiences are all the rage now. So people want to learn more about our mass and the bags themselves. So it's that's interesting. So I thought I've been excited about this since I heard about it too because I have some friends who have started funds where they buy classic cars for example. But they just then store the cars and like never use them. You're actually trading essentially handbags. And I guess you're not going to Hermes to buy them new. Right. You're buying them. We're not buying them directly from Hermes but we are using the resale industry. And there is there's so much pent up supply in the entire range of bags. So brand new in the box with plastic still on all the way down to the beater bags which are very popular with the Gen Z's. So it's really been interesting to see what is popular now versus what was popular 10 years ago 15 years ago 20 years ago. And a bag sells every 48 hours. Give us the price ranges. We're looking at some bags here. What's that in there. They're all there. That is a joke. I guess I have no idea. What are we talking about. They're just Hermes Birkins and Kelly's. It's a concentrated portfolio and anything between I would say twenty five thousand to thirty two thousand. And that gold one which is the brown is our bestseller. We've already replenished it three times. And it's really fun. It's been really great to watch. It thrives so much fun too with five X oversubscribed. So we're we're going into 2026 with big plans. Forget my forgive my fragile sensibilities when Matt looks at like an iconic Birkin bag and I'm sorry. OK this is not not to pick on you Matt but I wonder how much that plays into this because to Matt's point people have started funds around cars. They've started it about around watches. And a lot of people would be surprised to know the kind of premium these bags build. And when I say a lot of people I mean a lot of men. How much of the advantage here is just that this is an ignored asset class by 50 percent of the population. Well nobody's ever done a fund like this before. And when they've done the watch and the car funds it's usually people from those industries. It's not asset management people like myself. So it's been you know they don't know how about asset liability mismatches and they don't know how to price them and they don't know how to structure them. So we're really excited about this fund because it's been really well thought out. And we have mostly men as LP is including some of my Blackstone colleagues. So it's been really interesting to see. We have two women in front too. But everybody else is a guy. Yeah. Come on. No one knows more about handbags and women's shoes than Tom Keene. Right. He's an expert on the right. You mentioned your background in asset management. Yes. Where did you work before and how has that really prepared you. Yeah I'm a schulte lawyer from the late 90s. I've been in the hedge fund world for almost 30 years. I was at Blackstone for close to 10 years on the product development side. Bam. And I've been in the hedge. I know all the hedge fund guys. Many of them are invested either in Luxus or in the funds. So my my superpower is to be able to structure alternative investments. So being able to do that for assets that I actually enjoy buying for myself has been a real joy to that point because it's this moment where when putting together a portfolio people don't know whether bonds have that have a hedging power. They once did. Gold looks ridiculously expensive and everyone is so worried that that doesn't have much further to run. How much of the interest in your fund has also just been that that people don't know how to diversify right now. Exactly. It's a great diversifier. It hasn't been done before. So the returns are there. Fund one is up 38 percent gross twenty eight point nine percent net fund to has already had two exits. We're still closing it. So I think it is really exciting because it's very much I'm very inspired by the real estate investment community and those asset management products. So we're doing that. Obviously these are not feed generating assets yet but they might be. What would that look like. Well I mean look at all the Netflix shows and the Apple shows about wealthy people and escapism like White Lotus and your friends and neighbors and you're seeing Perkins and Kelly's displayed alongside watches and cars and everything else. So there's an opportunity to maybe rent the portfolio or at least sell the portfolio to the studios. And we're excited to work with them on that. By the way that brings up a question we were batting around in the editorial meeting this morning. Where do you keep these. Do you have like a bonded warehouse or are security guards hanging around your office. And can you take one out to lunch if you need a nice bag. Now I haven't even seen most of them. They are all being stored at my Gemma which is our operational partner. They're being authenticated and valuated and appraised by Graham Wetzberger who is the OG and the best in this business. And we're taking it very seriously. It's the first institutional product. So we're trying to make sure that we're we're all set with everything. Again these these bags have just so much lasting quality and the value. Can you talk about the beater bags. Because I think that's really interesting. The idea that younger people like a Birkin that looks beat up that looks very well used. Yeah. Gen Z really likes the beer bags. I call it the Olsen effect. And they have been trying to get all the resellers to source them because up until now the resource resellers wanted to just source brand new bags or at least excellent condition. And now all of a sudden they're being asked to do the beater bags that are being sold for around six to nine thousand dollars which is a much more acceptable entry level price. And I personally love the beater bags. All of mine are are as old and as beat up as could be. You talked about during the commercial break how you got one with a bonus. Yeah. A previous firm. And yeah you still have it. 20 years later. Do they. Where is it. Do they. Do they. Do they hold up. Oh yeah. It's the same style that they're still selling today. That is going super fast. I got the first bag at Blackstone in 2005. So 20 years ago with my VP bonus. And when I walked into the office with it everyone was like how did you get one. And and so it's been a real and they all remember the story still to this day. And it's been really fun for me to put together a fund around that. Yeah. Just because they're so difficult and so coveted it is just like this magical thing which you might have you do or you might have a podcast about first bags coming out. Yeah. I think we should plug because that's so interesting too. I just wonder as you think about the growth of Lexus how much capacity does this have. How much can you grow it. And how much money do you think that can be managed under a strategy like this. Well for us it's going to be about horizontal integration. So doing the same model with watches with cars with wines and spirits is really important. Next year though we're just focusing on this and going global. So we're going to plan some fun things with Christie's both in the southeast of the U.S. and in the Middle East region where they are really really top notch.

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