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Super-Rich Being Taught To Invest in Alternatives, Claims AAA
Alternative Asset Analysis (AAA) has backed reports that suggest that the young super-rich are being ‘trained’ to invest in alternatives, such as art and real estate.
The research firm has identified a new trend for young Russian, Arab, Chinese and South Asian heirs to undergo tutoring on how to handle the fortunes they are in line to inherit. One such event took place at Christie’s auction house in London recently, where the young heirs were put through their paces at a simulated auction, while a genuine auction of a valuable painting was taking place in the auction room below.
These skill are thought to be increasingly important among the super-rich, according to AAA, which advocates investing in alternative asset classes. The group's analysis partner, Anthony Johnson, said, “Being able to spot and bid for a valuable piece of art, which could prove to be a wise investment in years to come, could be a great skill to learn for these young people. One day they will be responsible to protecting their family fortunes from the risks involved in the current traditional investment markets.”
The auction event was organized by Citi’s private banking arm. Citi art finance manager, Suzanne Gyorgy, explained, "[Trading art is] a way for them to get liquidity out of the art collection to invest back into their business or buy other new business.”
A report from Merrill Lynch and Capgemini issued in June claimed that the super-rich were now increasingly interested in buying art, rare watches, champagne and vintage cars – not for fun or prestige, but simply for their potential as assets and investments. Mr Johnson added, “These assets are seen as a safe haven for money and are selling for higher and higher prices, while stocks and shares are proving exceptionally unstable as an asset class.”
AAA gives the example of forestry investment, through firms like Greenwood Management, as a safer alternative investment that regularly produces returns that exceed those from traditional investments.
About Alternative Asset Analysis:
The remit of Alternative Asset Analysis is to analyse and provide news on the global performance of a wide range of alternative asset classes including, but not restricted to, commodities, real estate, forestry, foreign exchange, hedge funds, private equity and venture capital.
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