Luxury assets boom

Collectables had a good year in 2021. According to the Knight Frank Wealth Report 2022, released last week, alternative investments in all classes rose as investors sought stability away from the volatility in stocks. The Knight Frank Luxury Investment index (KFLII), which tracks ten classes of collectables, from classic cars and art to wine and whisky, rose 9% on the previous year in the strongest annual growth since 2018. Watches and fine wine were the bestperforming luxury assets, both appreciating by 16%, no doubt helped along by the series of high-profile watch auctions held at Phillips towards the end of last year. November, for example, saw the sales of an “extremely important” Patek Philippe wristwatch (pictured), reference 2499 from 1952 for CHF3.5m (£2.9m), and a repeating grande and petite sonnerie wristwatch made by Philippe Dufour, which sold for CHF4.7m (£3.9m). As for fine wine, Champagne was the fastest appreciating region, rising 31% from a year earlier, with the 2008 vintage in particular attracting investors. Burgundy also had a good year, rising in value by a quarter.

Art was the third highest riser in Knight Frank’s index. Sales rose 13% year-on-year, driven by artworks by “bluechip” artists, such as Jackson Pollock, whose Number 17 fetched $61.2m. Of the big auction houses Sotheby’s led the way, racking up sales worth $7.3bn in 2021, followed closely by Christie’s with $7.1bn. But a shift is under way. Last year also saw the rise of “ultracontemporary ‘red-chip’” artists, who use social media to build a followings says Art Market Research‘s Veronika Lukasova. The craze for nonfungible tokens (NFTs) is the most visible expression of this trend. Leading auction houses sold “crypto art” worth a total of $227m in 2021, and that trend looks set to continue.