Art has overtaken classic cars as popular investment of passion option among Kenya’s wealthy population.
- The 18th edition of wealth report which gives a perspective on wealth investment trends in 2024 indicates 70 per cent of high-net-worth individuals in Kenya expressing keen interest on art, a significant uptick compared to the previous year when the majority (50 per cent) showed a penchant for purchasing classic cars.
- There is a tie between classic cars and watches at 57.14 per cent as number two preferred investment of passion among the high-net-worth individuals followed by whisky and jewelry at 42.86 per cent each.
- Making it to the top 10 list of investment of passion among the rich also include furniture (35.71), bags and wine (28.57 per cent each), Diamonds (14.29 per cent) and Coins (7.14 per cent).
“The shift from classic cars to art among Kenyan clients suggests a dynamic response to global investment trends and attests to the evolving nature of passion investments. The resilience of the art market in the face of broader economic fluctuations further underscores its appeal as a tangible and culturally rich asset class,” notes the Knight Frank Wealth Report 2024.
The shift aligns with global patterns, as evidenced by The Knight Frank Luxury Investment Index (KFLII), which tracks the performance of 10 popular investments of passion.
The latest data from the KFLII underscores the rising prominence of art as the best-performing luxury asset class in 2023, experiencing an impressive 11 per cent price increase.
Factors Driving Investments of Passion
Joy of Ownership: Knowledge is essential in selecting assets, particularly in categories like whisky, classic cars, and art. The pleasure derived from owning unique and culturally rich assets is evident, with a recognition that the joy of ownership complements the financial aspects of these investments.
Investment: The emphasis on investment as one of the reasons for collecting investments of passion is underscored by the performance analysis of various luxury assets. Notably, the discussion highlights fluctuations in the value of luxury assets such as whisky, classic cars, handbags, fine wine, watches, and jewellery. The financial aspect of these investments is a central theme, focusing on value appreciation, market corrections, and notable sales contributing to the overarching consideration of investments.
Intellectual Interest: Intellectual interest is the third-ranking factor in clients’ motivations for collecting investments of passion. There is a need for knowledge and expertise in making informed decisions, especially in areas like whisky, where understanding the scarcity and undervaluation of certain bottles is crucial. The intellectual engagement with the assets, their history, and market dynamics contributes to the overall appeal of investments of passion.
Status among Peers: Status among peers is also recognized as a contributing factor, albeit less prominent than the Joy of Ownership and financial aspects. According to the Classic car guru Dietrich Hatlapa, the retreat in the value of classic cars might be influenced by factors like changes in portfolio allocations and profit-taking. The discussion hints at the impact of market trends on the perceived status associated with certain investments.
To Belong to a Community: To belong to a community is identified as the smallest factor influencing clients’ motivations for collecting investments of passion. The sense of belonging to a community is likely associated with shared interests among collectors. For instance, the hip-hop culture influencing the jewelry market exemplifies how cultural trends and communities can shape preferences within investments of passion.
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