Passion investments on the rise

Passion investments on the rise

SINGAPORE - Wealthy Asians are showing a growing appetite for alternative investments such as wine and fine art.

These sophisticated investors are increasingly looking at diversifying from traditional investments and are seeking safety and yields from more esoteric investment products, a Knight Frank wealth report shows.

These assets, also known as passion investments, occupy a niche that combines aspects of luxury spending with collecting and investing.

Asian high net worth individuals (HNWIs) increased their allocation for passion investments by 7 per cent last year, according to the report's survey of private bankers and wealth advisers.

This year, it is expected to increase by another 7 per cent, said Knight Frank.

In the report that compiles the attitudes of the wealthy towards alternative investments, Tilburg University associate professor of art finance and alternative investments Rachel Pownall said: "It is their potential as an alternative to traditional asset classes that is raising the profile of collectables."

"Reasons for investing in passion assets can be purely rational. Their performance tends not to fluctuate with that of stocks and bonds, and they can hold their value during periods of expected inflation," added Dr Pownall.

Last year, wine was the most popular investment of passion among HNWIs in Singapore, Hong Kong and China.

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