Investing in Planes, Music, & More: An Interview
We got the chance to interview an investment sponsor to kick off our Investment Sponsor Interview Series! This content is for educational purposes and is not considered an endorsement.
Christopher Liong serves as the Chief Investment Officer and Portfolio Manager at Bergamot Asset Management.
Prior to Bergamot, Mr. Liong was a Managing Partner and a Portfolio Manager at Suffolk Capital Management.
Mr. Liong holds a Bachelor of Science Degree in Material Science and Engineering from Cornell University.
We sat down with CIO Christopher Liong of Bergamot Asset Management. We asked Mr. Liong for his thoughts on the industry. Here’s what he had to say:
Please tell me about your funds.
We have two funds: The Music Royalty Fund was our first launch, and the second fund is the Private Aviation Fund. We want to provide our investors and potential clients with unique opportunities that generate cashflow from the beginning. For the Music Royalty Fund, we acquire music catalogs from owners. Music catalogs generally pay out royalties to the owner so if you acquire catalogs, you collect royalty streams. With the growth of music streaming services, the business model overall has changed over the last five years.
There are two types of royalties: publishing and masters. Publishing royalty streams typically go to the songwriter, or the producer, etc. Masters refers to the playback of the original recording. The way publishing royalties works is you get paid anytime your song gets played, or anytime someone produces a remake of it, anytime it is used in a commercial, etc. The master royalty is when you own the master, or original, recording, so you get paid when that version gets played. So, if someone creates a remake of it, royalties are not paid for that.
With the two revenue streams, it is possible for you to own either or both, and each has a different value assigned to it. Bergamot acquires catalogs to further monetize them. We are focused on underdeveloped and undermanaged catalogs, and songs that may not be marketed or songs that may have been violated for infringements.
The Private Aviation Fund works similarly to the process of buying a house, and chartering it the way you would rent out an Air B&B. The business model of Bergamot is to use investment funds to purchase assets – in this case, airplanes or even parts such as engines. The fund has a few options: You could buy a plane like you would buy a fixer upper; refurbishing and updating it like you would a home.
Another way for the fund to make money is to charter a plane by renting it out, just like when you might own a rental property. Additionally, you can buy a plane, charter it, and then sell it for parts.
What do you find to be a common misconception when it comes to investing in your music fund?
In terms of our music fund, when people think of music, they think of artists. Here, we own royalty streams. When people initially learn about our music fund, sometimes they think we are investing in the artist, and trying to identify the next Taylor Swift or the next Justin Bieber, when we are instead buying older content that is cash flowing and generating revenue.
Also, people get confused because they want to own a popular song vs. owning something that will earn you income. It reminds me of when people need to keep in mind that a good stock and a good company are two different things.
What inspired you to open Bergamot?
There has always been an entrepreneurial spirit in me. I worked at a boutique investment firm for 20 years and I learned a lot about what worked and what could be done better. So, when that firm shut down, it gave me that opportunity to open my own investment firm and structure it properly from day one.
I also thought that there was a gap in the marketplace. Whether it was “standard” product offerings, or poor personal relationships and interactions in helping people, things in the industry can be very transactional in nature. We want to bridge that gap with unique offerings and making things personal…that is something I really wanted to address.
What is your company's main goal?
Ultimately, the goal is to get our clients where they need to be. We want to help them arrive at their retirement destination, and we understand there is often a journey involved in doing that. The goal is to work with them through that journey, understanding that there are changes that we will have to adapt to along the way. Bergamot strives to make our service better by providing a personal component, because that takes it to a different level.
Describe the ideal client that Bergamot aims to reach.
What I have found is that there is not enough education about overall planning for your future. Everyone studies for “what they want to be when they grow up” in school but are not taught how to balance a checkbook or manage our finances. Bergamot aims to provide solutions to people for real-world problems. We strive to help anyone that wants to reach their financial goals in their life and retire comfortably.
Business is about people. What is the main thing you want people to know about Bergamot?
I think for us business is about relationships, especially on the wealth management side. It is about establishing trust and helping people reach their goals. Whether they are starting at 25 years old or 40 or 50 years old, we want to be monitoring and adjusting for the changes that occur in life; especially the unexpected ones. Bergamot can adapt to those situations.
It is also about helping people find creative solutions and offering something different from the norm of what is out there already. While Bergamot is a fruit, it represents joy, balance, and success. All of these are essential for what we are trying to accomplish.
To what do you owe your success?
Family, and then friends. It is always about that support system. The job is challenging, and there are stresses involved. My wife, parents, siblings, and good friends have been patient and supportive throughout the entire process so far and we are all excited about what is to come.
You can visit Bergamot's website to learn more.
To explore investing in alternative assets with your retirement funds, schedule a call with a Self-Directed IRA Specialist.
This blog is in no way an endorsement of these investments.
Disclaimer: All the information contained on our website is a general discussion for informational purposes only. Madison Trust Company does not provide legal, tax or investment advice. Nothing of the foregoing, or of any other written, electronic, or oral statement or communication by Madison Trust Company or its representatives, is intended to be, or may be relayed as, legal, tax, investment advice, statements, opinions, or predictions. Before making investment decisions, please consult the appropriate legal, tax, and investment professionals for advice.