Luxury auctions shine

The results of the Knight Frank Luxury Investment Index


Andrew Shirley, The Wealth Report Editor

The value of the Knight Frank Luxury Investment Index (KFLII) rose by 7% in 2015. This compares with a 5% drop in the value of the FTSE 100 equities index and a rise of only 1% for the top end of the London residential market. But the headline figure masks a mixed performance across the 10 asset classes in KFLII. Classic cars (+17%) continue to top our league, with furniture again bringing up the rear (-6%).

A slew of stellar auction results throughout the year kept luxury investments firmly in the media spotlight. Even furniture secured a new high for a living maker when a Marc Newson Lockheed Lounge sofa was sold in April for £2.4m ($3.7m) by Phillips.

Although no classic car managed to beat the record set by Bonhams in 2014 when it auctioned a 1962 Ferrari 250 GTO Berlinetta for $38m, eight of the 25 cars ever to have sold for over $10m at auction went under the hammer in 2015. These included all-time high results for Jaguar ($13.2m), Porsche ($10.1m) and, interestingly because of its youth, McLaren ($13.75m).

A slew of stellar auction results kept luxury investment firmly in the media spotlight. Even furniture scored a new high when a sofa was sold for £2.4m

Despite this, Dietrich Hatlapa, of analyst HAGI, says growth is slowing Luxury auctions shine The results of the Knight Frank Luxury Investment Index ANDREW SHIRLEY, THE WEALTH REPORT EDITOR and considerably lower than for the 12 months to September 2014, when the HAGI Top Index zoomed up by 25%. Mr Hatlapa says the collector market is reacting to a downturn in global liquidity and potential interest rate rises.

A Hong Kong-based billionaire set an all-time record for a gem or piece of jewellery when he bid $48.4m for the Blue Moon, a rare fancy vivid blue diamond auctioned by Sotheby’s Geneva in November. The day before, he paid $28.5m for a vivid pink diamond sold by Christie’s.

Contemporary and modern artists have performed particularly strongly this year, with Picasso’s Women of Algiers setting an all-time auction high of $179m with Christie’s in May. Many other artists, including Modigliani ($170m) and Twombly ($70.5m), also scored personal bests.

Wine also had a good year with the Knight Frank Fine Wine Icons Index up 5%. Many of the investment-grade Bordeaux wines have now started to recover from the slump induced by the sharp drop in Chinese demand, says Nick Martin of Wine Owners, which compiles the index.

Stand Out Auction Sales

A selection of some of the luxury collectables that set new records or were the top sales of the year when they went under the hammer during 2015