The value of Knight Frank’s Luxury Investment Index (KFLII) increased 7% in 2015. The Index, which tracks the performance of 10 investments of passion and was presented at the Knight Frank Wealth Report launch at the ADGM (Abu Dhabi Global Markets), reveals that classic cars (+17%) continue to top the league.
Contemporary and modern art performed particularly strongly this year, with Picasso’s Women of Algiers setting an-all time auction high of USD 179 million. ‘Despite uncertainties in economic conditions, the appetite for wealthy collectors remains robust as individuals turn to tangible investments such as paintings, which are likely to appreciate in value as opposed to other investments’ commented Dana Salbak, Head of MENA Research at Knight Frank.
Within the Middle East, the Luxury Spending Index produced by Wealth-X reveals that UHNWIs show a stronger propensity for luxury automobiles and collectables than the global average. ‘Both automobiles and collectables are a way of illustrating status and appeal to a rapidly growing and young population’, Salbak added.
As individuals in emerging markets become wealthier, we expect to see the numbers of collectors increase. Not only do collectables represent a safe asset investment, they are a way of illustrating status and a sense of having ‘arrived’. Last year, the world’s top 200 art collectors came from 36 countries, compared with 17 in 1990.
Seeking new fields to capitalize on found a lot of wealthy entrepreneurs and business people investing in football clubs. While not everyone may be a fan, an annual Review of Football Finances conducted by Deloitte, reveals there is money to be made in the sector through TV revenues, ticket sales, and commercial revenues (including shirt deals and stadium rights). ‘The game’s wide and enduring appeal is not expected to change and so its ability to generate money will not.’