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The fund, which manages around $50 million, uses trading and buy-and-hold strategies for long-term appreciation. It invests in diamonds in rare colors such as red. While some are making efforts to create a liquid market, the process has been slow.Įntry level for Sciens Coloured Diamond Fund II, one of the more established closed-end funds now shut to new investors, is $1 million. However, the diamond investors’ club is shut to most ordinary savers due to its complicated, insider nature - characterized by poor liquidity, a lack of price transparency and high fees. They can’t afford the Oppenheimer Blue, perhaps, but they can take a stake in rare diamonds via specialist investment funds. And it’s no longer just a top table of “super rich” billionaires who are gravitating to this arcane world.Ī second division of wealthy is emerging. Some are eyeing rare diamonds as a best friend, or long-term haven at least. With new fortunes being created around the world faster than at any time in history, more of this expanding elite of wealthy investors are looking at different ways of protecting cash that now earns close to zero percent interest in bank accounts, while asset market turbulence can wipe out millions in hours.
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The sale some weeks ago was the latest in a series of world record prices per carat paid at auction for extraordinarily magnificent and rare diamonds. When the auctioneer’s hammer came down, spontaneous applause broke out as the winner, who retained anonymity, bought the 14.62-carat Oppenheimer Blue for a world record $57.5 million for any jewel sold at auction. The room in the Four Seasons Hotel des Bergues was filled with multi-millionaire collectors and diamond dealers, listening intently as the bidders, each speaking by phone to a Christie’s representative, took turns adding a few hundred thousand dollars in a tense struggle dragging on for more than half an hour. A Christie's employee poses with the 14.62 carats Oppenheimer Blue diamond during a preview in Geneva, Switzerland May 12, 2016.
