Millionaires invested more in art, luxury in 2010-report By Silke Koltrowitz | ZURICH | Thu Jun
23, 2011 5:53am EDT
Demand for art, watches, rare wines, vintage cars and other
offbeat investments that set pulses racing expanded in 2010
as wealth levels of the world's super-rich rebounded from
the financial crisis, a report said.
"The value of many categories of investments of passion
rose and HNWIs (high net-worth individuals) made acquisitions
for the aesthetic and emotional appeal and their potential
to return value," Capgemini and Merrill Lynch said
in the World Wealth Report 2011 published on Wednesday.
Growing wealth in emerging economies, especially in Asia
-- which surpassed Europe in millionaires and wealth last
year -- helped spur a revival in markets for these aptly
named investments, the authors of the report said.
In times of low interest rates and volatile stock markets,
alternative investments allow investors to diversify by
buying assets with little correlation to global financial
markets, thus offering potential shelter from market turbulence.
Luxury collectibles such as fancy cars, boats and jets
accounted for almost a third of these investments in 2010.
Chinese demand for expensive cars made by Mercedes-Benz
(DAIGn.DE) and Ferrari (part of Fiat (FIA.MI)) jumped last
year, the report said.
Individual tastes tend to determine whether a millionaire
prefers investing in cars, watches or wine, while artworks
are more likely to be acquired for their potential to gain
value, the authors wrote.
"Newly wealthy Chinese buyers are widely reported
to be keen bidders and buyers at galleries and auction houses,
especially to acquire the fast-diminishing supply of works
from native artists," the authors of the report said.
Art aficionados seemed willing to pay high prices at Art
Basel, the world's top fair for modern and contemporary
art, last week, suggesting the art market is returning to
pre-crisis peaks.
Meanwhile demand for diamonds as well as gold jewellery
and coins benefited from rising prices for these raw materials.
"Record prices for diamonds at international auctions
in 2010 exemplified the growing trend among the world's
HNWIs to see large diamonds as a safe and high-growth investment
alternative," the report said, adding Russian and Middle
Eastern investors were particularly keen on the expensive
gems.