Institutional Investor's Alpha Magazine - April 2008 - (Page 54)

SPECIAL REPORT: LUXURY MARKETS a Hart Davis Hart auction in Chicago, an original wooden case of 1990 La Tache from Domaine de la Romanee Conti realized $107,550 against an estimate of $40,000 to $60,000. “Despite talk of uncertainty in the economy, Hart Davis Hart continues to achieve record prices and sellthrough rates,” Vice Chairman Michael Davis said after the auction. If anything, recessionary times are an incentive for investors to balance their portfolios with tangible assets, such as art and ﬁne antiques. Fresh entrants to the art world – for example, Beĳing artist Yue Minjun – are attracting bids far in excess of asking prices at auctions at Sotheby’s in London. “The international market is particularly strong for Impressionist, modern, contemporary and Asian art,” says Marc Porter, president of Christie’s. “The fact that there is so much new wealth chasing blue-chip art works in these categories keeps driving the value for the best works.” In early spring auctions this year, Christie’s set a record for Chinese works of art, selling a total of $26.3 million in a March auction in New York that included ancient bronzes, snuﬀ bottle, and Imperial wardrobe items. Also in March, Christie’s set a world auction record for contemporary Indian paintings with a work by M.F. Husain that sold for $1.6 million, surpassing estimates of $600,000 to $800,000. While the Chinese stock market reported a record drop in the ﬁrst quarter of 2008, Sotheby’s found demand brisk at an April auction in Hong Kong of art and a number of gold and precious-metal objects, including a Ming Dynasty (1368-1644) bowl made with 1.3 kilograms of 18-karat gold that is considered to have been the most expensive item made during its time. Christie’s plans to auction a 101-carat, near- ﬂawless diamond in Hong Kong in May. Meanwhile, Bonhams, the UK-headquartered international ﬁne art auction house, is ﬁnding that the United Arab Emirates is an important and potentially recession-proof growth market. Three world records were broken at Bonhams’ inaugural Middle East art auction in Dubai in March, achieving total sales of more than $13 million, almost three times the expected result. The auction witnessed the ﬁrst Middle East work to sell for more than $1 million: Iranian artist Farhad Moshiri’s “Eshgh” (Love), an eye-catching construction of Swarovski crystals and glitter on canvas. ■ From left to right: Claude Monet’s Waterloo Bridge, temps couvert, 1904 sold at the June 18, 2007 auction at Christie’s for $35.5 million; Portrait of Miss Louise Getz, a 1925 painting by American artist Robert Henri, sold at the November 28, 2007 auction at Bonhams for $396,000 plans to open other shops in Las Vegas and Japan. When it comes to buying jewelry, gemstones and watches, high-net-worth individuals are gravitating to the highest end of the spectrum, to top-of-the-line items that promise long-term investment potential. Terry Betteridge, who with his brother Peter is the ﬁfth generation to run the 111-year-old Betteridge Jewelers, says that one-third of the business at the store he runs in Greenwich, Connecticut, is in the best and oldest handmade watches from Patek Philippe, Breguet and the like, selling for upwards of $15,000. Demand is also growing for large diamonds in the 5-to-20-carat range, says Betteridge, and prices are reﬂecting that demand. “A 10-carat stone that was $300,000 two years ago is now going for $600,000,” he says. Busy Art Auctions Betteridge says his sales at the 2008 Palm Beach Jewelry, Art and Antique Show, in February, were about eight times better than last year. “Much of the business was in euros and Swiss francs,” he says. The European market has become more important than ever to the jewelry business as the dollar weakens, but Betteridge also has an eye on new wealth within the US. His current advertising campaign depicts Betteridge himself and two other male executives of the company decked out in necklaces, bracelets and brooches. “This is a branding strategy designed to appeal to rising industry stars,” he says. “It helps break the ice with new potential clients; if you’ve seen men wearing jewelry you can ask them anything.” With wine cellars now a standard feature of luxury residences, ﬁne wines are also commanding unheard-of prices. A 12-bottle lot of Paul Jaboulet Ainé Hermitage La Chapelle 1961 sold for nearly $250,000 at Christie’s London auction in September, setting a record for any Rhône wine sold at auction. The Wine Spectator Auction Index has jumped 50 percent over the last two years, to the 300 level, a new barrel mark for the 32 luxury wines that lead the industry. In February, at 4 • Alpha Sponsored Report • April 2008

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - April 2008

Institutional Investor's Alpha Magazine - April 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Here to Eternity The Good Guys: Voice of Hope Cover Story: The Kings of Cash Where the Money Is Into the Light Interview: Proceeding with Caution Strategies: A Convenient Truth Alpha Bytes: Village Voice Unhedged: Commentary: No Time for Complacency

Institutional Investor's Alpha Magazine - April 2008

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