Brian Menell - Super Rich Turn to Diamonds as Prices Sparkle

Dec 15, 2010, 09:50 ET from Brian Menell Group

LONDON, December 15, 2010 /PRNewswire/ -- Unprecedented record prices for blue and pink diamonds, and important white stones, at international auction houses may be just the tip of the iceberg of a growing trend among the world's super rich to buy large diamonds as safe and high growth investments.

Brian Menell, former De Beers executive, and former partner of De Beers in the Venetia Mine (South Africa's largest diamond mine) through Anglovaal Mining (AVMIN), recently co-founded a boutique advisory business to assist the ultra-rich with the purchase of important white or fancy coloured diamonds.

Sotheby's recently broke the world record for a diamond after a bidder paid $46 million for a rare pink in Geneva. And an anonymous buyer recently paid $20.5 million for a 14-carat diamond at Christie's in Hong Kong.

Brian Menell said: "Diamonds are not only a uniquely concentrated form of transportable value, but also have a very compelling investment outlook. Diamonds in general, and important white and fancy coloured stones in particular, are rare and getting rarer. Many of the world's large mines are old and production is flat or declining. New discoveries are few and getting fewer. At the same time demand, particularly in the big emerging markets, is increasing at a growing pace. There is no doubt in my mind that price appreciation of polished diamonds over the next 20 years will outpace that of the last 20 years by a factor of 3 or 4 times.

"At the top end of the market, the attractiveness of important diamonds as investments has been undermined by large retail margins - between 100 and 200% - on the one hand, and the hit and miss nature of buying at auction on the other. The uniqueness of each stone, and hence the requirement for expert valuation, and the reputation of the diamond industry for sharp practices, have also been deterrents.

"My team provide a blue chip, discrete, confidential and expert service that gives individuals making large diamond purchases complete comfort with respect to price, origin, and certification. While my main business continues to be mining and energy projects in Africa, I love diamonds, and therefore assisting individuals to buy the right stone at the right price, regardless of whether they want it to adorn there wife or to hold in a vault, gives me great pleasure.

"While present demand at the super top end of the market appears to be largely from Russia and the Gulf, Chinese and other Asian demand is growing fast. Perhaps the rich of Europe and the US are being left behind in the scramble for the world's great gems.

"Whether for love, ego or greed, it appears that diamonds are set to grow as a focus for both new money and old."

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SOURCE Brian Menell Group