Guns July 29, 2010, 5:00PM EST

The Money Shot Investment

Is $200,000 too much for a rifle? Apparently not for some moguls. Peter Hofer's bespoke arms business is thriving

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A snarling white jaguar guards the door of the wood-paneled Austrian atelier of Peter Hofer, one of the world's last super-high-end gunmakers. Now stuffed, the cat was a casualty of the sort of exotic hunting expedition for which Hofer creates unique firearms.

You don't buy a Hofer to plink beer cans. His clients include Persian Gulf princes and Russian oligarchs for whom a couple hundred thousand dollars is a reasonable price for an exclusive toy. Many of his creations seem too exquisite for actual use. Hofer wears white gloves to reduce corrosion from perspiration when he presents the Hummingbird, a side-by-side double rifle chambered for tiny .17 caliber rounds. Forty gold-and-enamel birds flit against a lush backdrop of engraved-steel wildflowers. The gleaming walnut burl stock was sculpted from an 800-year-old Turkish tree. It's weight: 0.9 kilograms, about the heft of a ripe pineapple.

"The problem is not in bigger and bigger," Hofer explains. "The problem is in smaller and smaller." Reducing the trigger assembly and springs to Lilliputian dimensions requires metal-working dexterity approaching that of surgeons. After I mistakenly handle the Hummingbird ungloved, an assistant briskly materializes to massage it with protective oil.

Hofer, 50, enjoys demigod status among gun enthusiasts. His wild Beethoven hair complements a Mitteleuropean accent and gesticulation worthy of a symphony conductor. His outfit combines a forest-green Austrian outdoorsman's jacket with neatly pressed Polo Ralph Lauren (RL) blue jeans.

Most of his sales result from individual commissions; customers hear about him by word of mouth.Some clients trek to his workshop in a converted château next to a church in Ferlach, a village so tiny it doesn't even have its own train station. "He is among the most elite of the elite: gunmakers whose work is really closer to art and can be afforded by only the wealthiest hunters and collectors," says Gavin Gardiner, a sporting-arms auctioneer in London.

The greater gun industry is in a period of consolidation. The largest U.S. firearm and ammunition manufacturer for the mass market, Freedom Group, is a conglomeration of companies pieced together over several years by the New York investment firm Cerberus Capital Management. The bespoke business is also following this pattern. Some craftsmen in Ferlach, London, and other centers of custom gunmaking are suffering. Yet Hofer is going strong. His products are so expensive and his customers so flush that his business enjoys the rarefied position of being immune to the economy. He also offers moguls something many seek when it comes to their gun collections: anonymity. Unlike Gulfstreams, fancy firearms are a form of conspicuous consumption that the rich paradoxically keep private, in part out of concern that some in polite society view the hobby as, well, nuts.

If attention deficit disorder is the emblematic malady of the early twenty-first century, Hofer happily suffers from something like the opposite: inordinate concentration syndrome. He designed the original version of the Hummingbird model for Robert E. Petersen, the Los Angeles specialty-magazine magnate who started Hot Rod, Motor Trend, Guns & Ammo, and a slew of other titles. Petersen died in 2007 at the age of 80; his family has several Hofer creations in one of the finest private firearm collections in the U.S. "He thought the world of those Hofer guns," says Ken Elliott, a friend and business associate. "Some people want to have the very best of what they love. Bob loved guns."

Hofer and his eight employees labor on only 20 firearms at a time. They once spent tens of thousands of hours over a dozen years on a double-barrel rifle, he says. "This was a fantastic rifle. It's really hard to give away, because there is so much feeling in it."