Hermès Bags Are Now a Hedge Fund Strategy

According to Forbes, former Blackstone executive Dana Auslander’s company Luxus has launched the world’s first Hermès-dedicated hedge fund strategy focused exclusively on Birkin and Kelly bags. The initial fund raised $1 million in May and delivered a 34% net return on investment with an incredibly fast 43-day average resale timeline. Due to overwhelming demand, they’ve already launched a second fund that raised $2 million, with both funds backed by auction house Christie’s. The fund treats these luxury handbags as investment-grade assets, comparing their performance to gold. Until now, the operation has been in stealth mode, gaining investors through word of mouth rather than traditional marketing.

Luxury Meets Wall Street

Here’s the thing – this isn’t just rich people buying expensive purses. We’re talking about a formal investment vehicle with a chief authentication officer and everything. The fund carefully curates two types of bags: the more common black and beige Birkins that trade on multiple marketplaces, and exotic specialty pieces sold through Christie’s and Sotheby’s. And they’re creating something called the Hermès Pricing Index to formalize market data, which is basically trying to do for handbags what the S&P 500 did for stocks.

I mean, think about it. These bags have appreciated about 5% annually over the past decade, with pandemic demand sending prices soaring. Even after the post-pandemic correction, values stayed above pre-COVID levels. But here’s what really makes this interesting – you can’t just walk into an Hermès store and buy these things. The artificial scarcity creates this perfect storm of desirability and investment potential.

The Counterfeit Problem

Now, the authentication piece is absolutely critical here. Graham Wetzbarger, their chief authentication officer, says Hermès counterfeits have become scarily sophisticated. We’re not talking about the obvious fakes from Canal Street anymore. Counterfeiters are spending serious money to create convincing replicas that they sell online, often tricking buyers who think they’re getting genuine bags at a “good price.”

Wetzbarger has seen friends invest heavily in what they thought were authentic bags, only for him to reveal they were counterfeits. The scary part? The quality of Hermès fakes apparently surpasses that of any other luxury brand. This authentication guarantee is actually one of the fund’s biggest value propositions – they’re taking on the risk of getting duped so investors don’t have to.

Who Actually Invests

Here’s where it gets really fascinating. While women are the primary customers actually carrying Birkins and Kellys, men make up the vast majority of investors in this fund. Auslander thinks women are more risk-averse when it comes to investments, while “men don’t care” and just focus on the returns. That’s… quite a generalization, but the numbers apparently bear it out.

The investors don’t actually own individual bags – they own pieces of the fund itself. And as a perk, they get first dibs on bags Luxus acquires at lower prices. Basically, it’s turning luxury goods into a structured financial product, which has never been done at this scale before.

Bigger Picture

So what does this actually mean for the luxury market and investing? We’re seeing a fundamental shift in how younger generations view ownership. Auslander notes that Gen Z and Millennials care less about physically owning these bags and more about investing in them or experiencing the auction energy. Alternative assets are having a moment, and luxury goods are becoming part of that conversation.

But here’s my question – is this sustainable? We’ve seen similar stories with sneakers, trading cards, and other collectibles that eventually cool off. The difference with Hermès is that controlled scarcity – they’ll never mass-produce Birkins. Still, treating handbags like stocks feels like peak luxury capitalism. Whether this becomes a lasting asset class or just a niche play for the ultra-wealthy remains to be seen.