Investment Funds Specializing In Diamonds... Catching On Among Wealthy Chinese
Posted in News on August 15, 2011 by Elite Diams
Jing Daily Article
Investment Funds Specializing In Diamonds, Wine, Art Catching On Among Wealthy Chinese.
Late last year, Jing Daily covered the growing potential of art funds in China, where more aspiring collectors are turning to investment funds as a more affordable way to get into the country’s booming art market. As we pointed out at the time, art funds have long been around in Western countries, though in the wake of the global economic crisis of 2008 funds overloaded with European or American artists to the exclusion of Asian artists saw decidedly mixed results. In response to growing demand from new collectors — who have plowed into the Chinese auction market so quickly that “super-collector” Liu Yiqian recently said he’ll “know less than one-fifth of the players in this area in the next five years” — Jing Daily added:
As it turns out, it’s not just art funds that investors, spooked by inflation and often ambivalent towards the Chinese stock market, are looking to. This week, China Daily looks at the growing number of investment funds specializing in wine, diamonds and even musical instruments that are appearing in China. These so-called “passion funds” — “investment vehicles that offer significant long-term returns from luxury collectibles such as art, fine wine, diamonds, rare musical instruments and mint condition comic books” — at times met with a cool response in years past, but now they’re once again catching on.
From China Daily:
While interest in niche “passion funds” specializing in rare books or musical instruments might be there, it’s really in the art and wine segments that these funds are likely to find success in China. As the article points out, the emergence of Chinese collectors and investors on the art scene and in the global wine auction market has had dramatic effects on the rising prices for top Chinese contemporary art (particularly for “blue-chip” artists) and sought-after wines.
Strong demand from Asia in general and China specifically is expected to drive the Liv-ex Fine Wine 100 Index to a 21 percent increase this year, likely making investors in wine investment funds very happy indeed. With auction houses breaking records left and right at this spring’s auctions in Hong Kong and mainland China, we can expect even more funds to try to diversify their holdings to include more top historical Chinese contemporary artists. As the article concludes: