Treasure seeking is a reality! In fact there are a group of highly prized assets whose rarity and value has provided such spectacular growth for their owners that they are actually referred to as “Treasure Assets”. These include fine art, classic cars, vintage watches, antiques, rare stamps and fine wine.
There is nothing whimsical about owning these ‘treasures’, with historical data on price performance over time showing excellent if not extraordinary returns to investors. Rare and highly collectable luxury goods are a means to not only protect wealth but can also be viewed strategically as components of an investment portfolio with the ability to deliver significant growth and other benefits in terms of attractive tax treatment and the ability to hedge currency movements and negative economic conditions such as inflation.
As a consequence, whilst there may be a passionate interest involved, there is also a cool logic to such acquisitions. Barclays Wealth and Property specialist, Knight Frank, publish annual reports reviewing the investment habits of the Ultra High Net Worth clients of wealth managers from around the world. Investment in these assets represents an average of ten per cent of the portfolio value of the UHNW’s reviewed.
The sales values achieved by Treasure Assets can be ‘eye-watering’ and often make media headlines. Fine Art has probably seen some of the most extraordinary sales outcomes. For example, the abstract master, ‘Interchange’ by Willem de Kooning was sold for c. $300million in a private sale to billionaire hedge fund manager, Kenneth C. Griffin, in September 2015 by the David Geffen Foundation. Interchange had previously been acquired in 1989 for $20.7million. In the same private sale in 2015, Griffin acquired Jackson Pollock’s ‘Number 17A’, the two paintings raising a total $500million for the Foundation.
A classic 1962 Ferrari 250 GTO with a top racing pedigree was marketed for sale in the UK in November 2016 for £45million. Probably the most highly prized watch in the world, the Patek Philippe Henry Graves Supercomplication sold at auction by Sotheby’s for $24million in November 2015.
Notable collectors include Bill Gates who paid more than $30million for Leonardo da Vinci’s famous manuscript, Codex Hammer, in 1994. Personalities from the worlds of sport and entertainment such as Jay-Z, Brad Pitt, Thierry Henri are great collectors of watches, Ralph Lauren and Chris Evans collect classic cars. H.M. Queen Elizabeth II is a notable collector of rare stamps and Sirs Andrew Lloyd Webber and Alex Ferguson have extensive collections of fine wine. Notably Sir Alex sold some of his wine through three auctions raising more than £5million in 2015.
Obviously, the price tag of treasure assets may well deter many from even looking seriously at investing in this space, however this is where fine wine is a serious contender for all investors. The entry level for investment-grade wine can be less than £5,000, and the historic performance of fine wine measuring average and median growth rates since records began is significantly better than all of the other recognized Treasure Assets.
The Vin-X analysts have reviewed the asset performance of these ‘Treasures’ and also compared them to the FTSE since the mid-nineties when records began and set out fascinating findings in a special market report. Looking at a number of variables in terms of the period of time held and growth rates, fine wine has outperformed Cars, Fine Art, Antiques, Watches, Stamps and the FTSE 100.
You can read the Vin-X Market Report in full by clicking on the link: https://www.vin-x.com/treasure-asset