Thursday, September 29, 2011

Wealth Watch: Forget about stocks; the ultra-rich turn to art

At Christie's auction house in London one evening last July, as art investors bid millions for an 18th-century painting of a horse, the sons and daughters of the capital's super-rich were going through their paces in a simulated auction.
In an upstairs room in London's plush St James's district, around 30 people mostly in their 20s chatted politely in fluent English, their accents Russian, Arabic, South Asian and Chinese. After a three-course dinner of salmon and roast lamb, the program began: a role-play in which teams bid in an imaginary auction for various works of art.

A crew of experts was on hand to advise on the value of the pieces. The bidding gathered pace. Staff took fake phone calls and bid on behalf of "mystery buyers." A young woman shouted encouragement in Arabic. One team bid hard, driving prices far higher than the recommended valuations. At the last minute they pulled out, landing rivals with an exorbitant bill. A large plasma screen showed the real-life bidding going on downstairs. George Stubbs' "Gimcrack on Newmarket Heath" sold for 22.4 million pounds ($35 million), making it the third most valuable Old Master ever sold at auction.

Art used to be known as an "investment of passion"; today for those who can pay, it is a form of haven. Demand for art, watches, rare wines, vintage cars, boats and wine expanded in 2010 as the world's super-rich rebounded from the 2008 financial crisis, according to a report by Capgemini and Merrill Lynch in June.

http://today.msnbc.msn.com/id/44708191

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