Luxury investments of the super rich
PA/Phillips auction house
Luxury investments of the super rich
It takes money to make money is the old adage, and it would seem it still applies today. New data has revealed the amazing items snapped up by the super rich – that they then sell on for a tidy profit.
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Classic cars
While most new cars can lose anywhere up to half their value in the first year alone, the same obviously doesn't apply to certain vintage models. In fact, the classic car sector rocketed almost a fifth (17%) in value during 2015 alone – and almost five-fold (490%) over the last decade. That makes it the best performing luxury investment, according to analysis by Knight Frank.
Classic cars
So what kind of classic cars might the mega rich (or 'ultra high net worth individuals' as they are called) look to invest in? This 1956 Ferrari 290 MM would be a prime example, having sold at auction for £19.8 million in December. As Knight Frank points out, eight of the 25 cars ever to have sold globally for more than $10 million (£7.1m) at auction went under the hammer in 2015, underlining how popular this luxury asset class has become.
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Wine
Wine increased in value by a more moderate 5% last year, according to Knight Frank. However, it is still up 241% over the last 10, highlighting why it remains a trusted favourite of wealthy investors.
Wine
A popular event for wine investors is the annual Premiere Napa Valley auction (pictured), which is held in February. This year saw one investor pay £92,000 for five cases of 2014 Inebriarie In Vitae Cabernet. Only time will tell how profitable, or otherwise, their purchase will prove.
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Coins
Coins (13%) were the second best-performing luxury asset in 2015 according to Knight Frank data, and the third best over the last decade (232%). Small wonder they have been attracting interest from buyers with deep pockets.
Coins
For the wealthiest investors, this 1894 dime would no doubt be on their wish list. Fewer than 10 are known to exist, and on the rare occasions they are put up for auction they fetch a fortune. In January, the coin pictured above sold to a buyer who wished to remain anonymous for £1.4 million.
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Art
A perennial favourite of the wealthy investor, art as a sector jumped 4% in total value last year. Looking longer term, it's increased 28% over the last five years and 226% over a decade. Paintings in particular are where the really big money is spent. Records are broken seemingly every year as buyers shell out ever larger sums for the most sought-after works of art.
Art
A great example of this trend was the auction of Pablo Picasso's Women of Algiers (Version O) last year. The painting fetched £126 million, a record for any painting sold at auction. Experts say the exorbitant fees paid for such paintings are being driven specifically by the artworks' investment value.
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Stamps
While most collectors' stamps are worth relatively small fees, the rarest can fetch a princely sum as there is no shortage of keen buyers. According to Knight Frank, stamps as a luxury investment have increased in value by 166% over the last 10 years.
Stamps
When looking at valuable stamps, the British Guiana One-Cent Magenta stamp holds no peers. It sold for a whopping £6.7 million at a Sotheby's auction back in 2014 to an anonymous buyer. While that's clearly a hefty sum to pay, it could yet prove profitable. As Sotheby's vice chairman David Redden noted at the time, the only way someone will pay more for a stamp is if the buyer puts it up for sale again.
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Jewelery
Similar to art, the world's wealthiest investors are happy to spend obscene amounts on the most remarkable examples of jewelery. In the last year, the asset class has increased 4% in value.
Jewellery
One recent auction that would have caught the eye of those with cash to burn was the high-profile auction of the jewellery collection of late Filipino president Ferdinand Marcos' widow, Imelda. It is said the jewels could be worth a combined total of £14.8 million.
Coloured diamonds
Knight Frank identifies coloured diamonds as a separate luxury investment to jewellery. Returns have been more modest recently, having flatlined in 2015. However, they are still up 38% over the last five years.
Coloured diamonds
One of the most remarkable coloured diamonds recently sold for a record £34.1 million. According to reports, the 12.03-carat blue diamond went to a Hong Kong businessman.
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Watches
Watches have proved a robust-yet-steady investment, rising 5% last year and 67% over the last decade, according to Knight Frank. So what makes a watch valuable? Alux.com, which describes itself as a site for luxury enthusiasts, says it is a three-fold combination of the costs of the parts, the time it took to complete, and how unique or rare it is.
Watches
While this 1927 Patek Philippe might not have been made from the most expensive parts, like some of its diamond-encrusted rivals, it is unquestionably rare: only two were ever made and one is in Patek Phillipe’s museum. As a result of its rarity, the watch fetched a whopping 4.6 million Swiss francs at auction last year, which works out to £3.2 million at today's rates. The buyer chose to remain anonymous.
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Chinese ceramics
It might seem niche compared to the other assets on this list, but Chinese ceramics make headlines surprisingly often, fetching huge sums at auction. Such investments have increased 50% in value over the last decade, according to the Knight Frank luxury index. As the Daily Mail notes: “The value of Asian antiques has shot up in recent years as the Chinese set about buying back their heritage which was taken out of the Far East by westerners in the 19th century.”
Chinese ceramics
An upcoming auction of important Chinese art at Sotheby's later this month will no doubt attract potential investors with deep pockets. Both the vases pictured above are from the Qianlong period, with the one on the left expected to fetch up to £210,000 and the right £562,000 at the auction on March 16.
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Furniture
Obviously we're not talking about furniture of the Ikea variety here. Furniture as a luxury investment can be a volatile area, as witnessed by the fact its value has actually fallen 29% over the last year according to Knight Frank.
Furniture
Yet the right pieces continue to rocket in value. This Lockheed Lounge by Marc Newson fetched £1.7 million at a Phillips auction last year – a record for a living designer.