What do the rich collect?
A new survey sheds light on how the global rich (Irish included) invest their cash and why so-called ‘treasure’ still holds a fascination for manyTHE AMERICAN writer F Scott Fitzgerald is often misquoted but here’s what he said about the rich in his 1926 short story, The Rich Boy: “Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft, where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand.”
Understanding the psychology of the rich is of major interest to fine art galleries, dealers and auctioneers given the vast sums of money currently being spent worldwide on art, antiques and various collectibles.
Earlier this year, the Wealth and Investment Management division of Barclays Bank undertook an international survey of rich clients to determine their attitude to investing in what the report called “treasure” – defined as assets such as precious jewellery, fine art, wine, antique furniture, classic cars and precious metals.
The survey was conducted in 17 countries in Europe, North and South America, the Middle East and the Asia-Pacific region. Ireland was included. Some 2,000 “high net-worth individuals” responded, 50 of them Irish.
The respondents all had over $1.5 million (or an equivalent amount) in investable assets and some 200 had more than $15 million.
The main finding in report titled Profit or Pleasure? Exploring the Motivations Behind Treasure Trends was that the global rich hold, on average, 9.6 per cent of their wealth in “treasure”.
Respondents from the United Arab Emirates topped the list with 18 per cent of their wealth held in treasure, followed by those from Saudi Arabia and China at 17 per cent. Among other notable results, the figure for the US was 9 per cent, the UK 7 per cent, Switzerland 6 per cent and India just 3 per cent. For Ireland, the figure was 10 per cent.
Precious jewellery is the most popular asset with 70 per cent of respondents owning some; followed by art at 49 per cent and then antique furniture 37 per cent.
Jewellery’s international popularity is hardly surprising since, as the report points out, it “does not require upkeep and will generally not deteriorate over time” unlike, for example cars or real estate, and “can be easily transported in the event of an emergency”.
Eyebrows may be raised at the appearance on the list of stamp collecting – surely a pastime on the decline? – with no fewer than 17 per cent of respondents claiming to have a collection.
The report notes that “with traditional financial markets still highly volatile and interest rates at record lows, the possibility that art, wine, antiques and other collectibles could earn a handsome return . . . is certainly alluring”. But, the report cautions that owning such items “can involve high transaction, storage, insurance and appraisal costs” and “are susceptible to vagaries in fashion”.
Despite increased public interest and record prices being set at auction, the report finds that investors are far more likely to buy treasure assets for emotional, rather than financial reasons,
In any case, the rich don’t buy art for purely investment purposes. Overall the report uncovers that “investing in treasure in most parts of the world is more about enjoyment than financial returns”.
The survey found that only 18 per cent of respondents “own treasure solely for its financial characteristics”.