What the wealthy choose as alternative investments

Published Mar 15, 2019

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There has been an explosion in the value of alternative investments -.classic cars, wristwatches, jewellery, wine and whisky, handbags - all the things that those with huge wallets are collecting and investing in. Barnebys – the leading global art and collectables search engine - has been monitoring this front for the past year. It represents billions of dollars of luxury item buying. Barnebys is the world’s leading auction aggregator, monitoring a database second to none of what is selling around the world for record prices and tracking sales of art, antiques and collectables from their 2,000 auction clients in Europe, Asia and the USA On any one day the Barnebys site hosts more than a million objects for sale.

According to Pontus Silfverslope, one of the founders of Barnebys notes that the price level in some of those collecting areas has increased enormously last few years. But of course there are still just a minority of the population that can play this game. Nevertheless interest in the top end, the very very best of each collecting category has gone through the roof in the last 25 years. There is much evidence in many of our auction house clients around the world of bidding at the highest level for items that are really coveted by the billionaires. There is no sign that we can see of any lessening of the desire to acquire the ultimate in everything of value.”

The main action now lies with wine, cars, diamonds and watches. Thanks to the increased global market, greater transparency in the auction sector and a favorable economic situation with good growth in major parts of the world interest in the auction market has increased. Many wealthy people see these new collectibles as a good investment and also a fun investment where the return is more than money in the bank.

These collecting areas have skyrocketed in recent years and growth has been enormous. Many millionaires have discovered the pleasure and excitement of the auction market thanks to these categories – cars, wine, watches and jewellery. And some people have become millionaires thanks to their forgotten treasures in the attic or the the basement.

The number of classic cars sold at auction every year keeps on rising, so if you are looking for something classic, auction houses are a very good place to start your search. Top classic car auction houses include RM Sotheby’s, Bonhams, H&H Classics, Gooding & Co, Barrett Jackson,Artcurial, Aguttes, Russo and Steele. The most famous automotive brands like Ferrari, Porsche, Aston Martin or Bugatti, to name just a few, have been attracting a broader audience each year and are the object of fierce auctions. With the internationalisation of auction houses sales are increasing and spreading all around the globe.

According to “The Wealth Report” published last year (2018) by Knight Frank, classic cars are, in the long-term, a better investment than art and show an impressive progression of 334 % over the past ten years. A good example of the strength of this sector is the 1962 Ferrari 250 GTO, which sold at auction just a month ago in August for a record £38 million.

Not since the Renaissance has the fascination with watches been as great as now says Barnebys, the worlds leading auction search engine which offers 65 million prices achieved at auctions worldwide. This astonishing database is a goldmine for tracking down trend information and currently the watch market is going balistic according to Barnebys figures. Barnebys affiliated auction houses and traders offer approximately one million searchable items daily.

It's the exclusive watch brands that are the hottest ticket on the auction market which continue to make records at auction. This classic status symbol worn on one’s wrist has become a popular collector's item and is now one of the most collectable of categories which include wine, cars, art and antiques. The most searched for watch brand is Rolex, followed by Omega and Patek Philippe. Unlike most other collecting areas, wrist watches attract a younger audience. Over 90% of the searches onBarnebys are made by men between 18-34. But more and more women are also looking for exclusive wristwatches. Today, the watch market is one of the hottest in the auction world.

Paul Newman’s legendary Rolex “Paul Newman” Daytona sold for £13,545,848 (+/-ZAR 257,371,112), a new world record for a wristwatch at auction. The timepiece sold to an anonymous bidder on the phone after 12 minutes of spirited bidding at Phillips in New York last year.

Jewellery has continued to perform well over the past decade. Jewellery is as subject to fashion as any other commodity says Barnebys and ewellery from the 1960s and 1970s is extremely desirable at the moment. There is also a real interest for signed art deco jewellery, viewed by collectors as small works of art. But it is the great white diamonds, the coloured diamonds, thecoloured gemstones - sapphires, emeralds and rubies - and the very best pearls that are currently commanding the most excitement in auction rooms

Jewellery is as subject to fashion as any other commodity says Barnebys, the one-stop shop auction search engine. Jewellery from the 1960s and 1970s is extremely desirable at the moment. There is also a real interest for signed art deco jewellery, viewed by collectors as small works of art. But it is the great white diamonds, the coloured diamonds, the coloured gemstones - sapphires, emeralds and rubies - and the very best pearls that are currently commanding the most excitement in auction rooms.

There has been something of an earthquake in the wine world with the major sales now taking place in Hong Kong where enormous air conditioned cellars keep premier crus cool for even cooler customers. And where the world record price for Whisky is now held by a Japanese brand. A bottle of Macallan whisky sold for a staggering £1.2 million in 2018.

A bottle of Japanese whisky sold at Hong Kong’s Bonhams Whisky Sale for £261,000, toppling both its estimated sale price and the previous world record for a single bottle of Japanese whisky.The bottle in question was a 50-year-old Yamazaki, a rare single malt. Yamazaki is Japan’s oldest whisky distillery, and first opened in 1923. The Drinks Business notes that the bottle, first released in 2005, is one of only 50 made by the distillery; it was matured in mizunara (Japanese Oak) casks and is thought to be the oldest Yamazaki on the market. When it comes to wine nothing has topped the Jeroboam of 1945 Chateau Mouton Rothschid that sold for £236,000 (+/- ZAR 4 515 205,59) in February 2007 at Sotheby’s.

The value of branded women’s handbags have gone through the roof and today are one of the most collectable alternate investment categories at auction. So next time your partners says that she wants a handbag and the price horrifies you, just think that it may in fact prove to be an investment. The new world record is held by a matte white Himalaya Niloticus Crocodile Diamond bag byHermès Birkin designed by Jean Paul Gaultier. It sold for £384,000 (+/- ZAR 7 347 147,36). It was described as the rarest, most sought-after, most valuable bag.

Pontus Silfverstolpe is a well known antiques expert. He is the co-founder and Head of Content for Barnebys and Jessica Douglas is the UK Editor for Barnebys. She holds an MA in art history.

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