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by Mark Huber

While there are bargains still to be had among vintage and classic aircraft, the market is so hot right now for World War II fighter aircraft that overseas hedge funds are buying into what is shaping up to be a new asset class.

Simon Brown’s company in Los Angeles, Platinum Fighter Sales, moves 20 to 25 of these collectible war aircraft annually. He says he has recently sold such vintage aircraft to funds in Australia, Italy, and the U.K., but is barred from revealing their identities due to the non-disclosure agreements he signed. Brown says such funds typically buy in $4 million to $5 million blocks, not huge amounts, but it’s still enough to drive up market prices.

But the trade also flies in the other direction, particularly since the dollar’s appreciation post-Brexit. “The European market is very hot right now. It is very cheap for an American to buy a plane overseas, and this is sort of an historic reversal. Right now you can buy a Spitfire for 1.8 to 3 million pounds ($2.33 to $3 million) and that makes it historically cheap,” he says.

Brown’s firm has among its offerings a 1944 Goodyear FG-1D Corsair for $4.1 million, and a rare two-seat Messerschmitt Me 109G for $7.59 million. Brown knows a collector who has an Me-109 documented to have seen action in the epic Battle of Britain, the Anglo-German air war that was at its most torrid in 1940 from June to October. Brown says the owner recently turned down an $11 million offer for the airplane, which is quite remarkable considering that these planes sold for a few hundred dollars, not even their scrap value, in the years right after the war, with some still trading for tens of thousands of dollars through the late 1970s.

Major collectors like Microsoft co-founder Paul Allen, oil-royalty scion Kermit Weeks, and Jerry Yagen, the driving force behind Virginia's Military Aviation Museum, have dominated the “rare birds” scene for years. Allen's collection recently moved into an 88,000-square-foot display space in Everett, Washington and was officially rebranded the “Flying Heritage and Combat Armor Museum.” Weeks' “Fantasy of Flight” collection, housed in Polk City, Fla., once numbered more than 150 aircraft.

Investors are grabbing up rare WWII warbirds like this $2.6 million Vickers Supermarine Spitfire. John Dibbs / Plane Picture Co.

Increasingly, however, the love of plane is being replaced by the love of gain. "For years we've had enthusiast pilots collecting and flying these airplanes, but in the last two years the market has moved on to investors. They are all former car investors and they're investing in airplanes because they feel that the car market is tapped out," Brown says.

This new breed of vintage aircraft investor is “interested in the rarest of the rare—the German WWII aircraft. That's the hot thing right now. They're interested in flyable aircraft but they're not flying them. It's almost a balance sheet thing to them. They're buying it for X and holding onto it in the expectation of selling it for Y. We've had some great success in dealing with people like that. The planes don't have to be flyable. We've sold barn-find airplanes that have gone directly into warehouses and other planes that have been restored. Every one is a little different. But the end result is that the people buying aircraft are looking for profit when they sell."

Collectors usually pay a premium for unrestored aircraft. In 2014, for example, Brown helped dispose of eight aircraft from the collection of Wilson Connell "Connie" Edwards in Big Spring, Texas. Edwards was the flying scene coordinator and a stunt pilot for the 1969 film the Battle of Britain and took the planes in lieu of cash payment. The lot went for $15 million and included rare unrestored 1943 British Spitfire IXb built by Vickers Armstrongs Ltd., and eight Hispano Aviacion Buchons, the Spanish version of the German Messerschmitt Bf 109.

The Spitfire not only appeared in the Battle of Britain but also in Darryl F. Danuck's 1962 D-Day extravaganza The Longest Day. In addition to flying for the British RAF, it saw service with the Dutch and Belgian air forces.The Buchons “had the same oil in the engines they had in 1969. They hadn't had a thing done to them, they were absolutely time capsules. We actually got more for them than for flyable aircraft because they were the last unrestored fighters out there,” Brown says. The sale price was double what they would have commanded in the market just five years earlier.

It’s never wise to chase past returns, but for the pure fun factor and historical excitement, this is one asset class that is hard to beat.