Merlion Investments: Investing in Collectible Assets
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.