Art topped the Knight Frank Luxury Investment Index (KFLII), overtaking wine and classic cars
with an outstanding growth of 21% in 2017, according to data compiled by Knight Frank for The Wealth Report 2018.

The strong performance follows a number of years when art had fallen behind other collectibles such as classic cars and wine. However, last year’s record-breaking sale of Leonardo da Vinci’s Salvator Mundi for US$450 million—surpassing the previous world record by a staggering US$271 million—epitomises art’s recovery.

The 12th edition of The Wealth Report reveals that the KFLII’s value rose by 7% overall in the 12 months to December 2017.

Wine, KFLII’s top performing asset class in 2016, also had a strong year and saw double-digit growth (11%). Scarcity-driven markets, particularly for Burgundy, remained strong and demand from Asia and the Middle Eastcontinued to buoy prices.

According to The Wealth Report’s Attitudes Survey, 17% of Kenyan wealth advisors said their clients actively collect investments of passion such as art, wine, jewellery, watches and classic cars, compared to Africa’s average of 23% and 37% global.

The main reason why Kenya’s super-rich buy investments of passion is for status among peers, followed by joy of ownership, safe haven for capital, investment portfolio diversification, and capital appreciation, in that order.

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Wealth advisors said 11% of Kenyan high-net-worth-individuals (HNWIs) increased their luxury investments in 2017, with a further 68% maintaining their collectible portfolios the same as in 2016.

READ: Only 10 Kenyans worth Sh50b in net assets

The KFLII data showed that record-breaking sales also took place for a number of the index’s other asset classes in 2017:

  • In the classic car market, a 1956 Aston Martin DBR1, raced by Stirling Moss, sold at auction for US$22.5 million—a record for a British car
  • Actor Paul Newman’s Rolex Daytona watch sold for US$17.8 million, having been guided at US$1 million- Hong Kong jeweller Chow Tai Fook paid HK$553 million for the Pink Star 59.6-carat vivid pink diamond— a world record for a diamond or piece of jewellery
  • Estimated at £200,000, a set of four rare 16th or 17th century Chinese huanghuall chairs sold to an Asian buyer for £5.3 million

Andrew Shirley, Editor of The Wealth Report and KFLII, said: “The strong performance of the Knight Frank Luxury Investment Index in 2017 reflects the stunning prices paid for objects of passion throughout the year.

The US$450 million bid for a painting by Leonardo da Vinci shows that keen collectors will stop at almost nothing to acquire the most sought-after and cleverly marketed works of art. The record price achieved by Paul Newman’s Rolex Daytona watch also highlights the importance of provenance to collectors.”

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