ELITA Journal • August 2025

• Global wealth at the very top has continued to expand. The worldwide ultra-high-net-worth population grew by just over 4% in 2023 and is projected to rise by almost 30% over the next five years, sustaining structural demand for scarce, real assets.
• "Passion assets" have gone through a sharp repricing rather than a collapse. Knight Frank's Luxury Investment Index (KFLII) fell around 3% in 2024, with handbags, jewellery and coins posting small gains, while fine art, wine and whisky recorded double-digit declines. Over the 2005–2024 period, however, the index still delivered cumulative returns of roughly 440%, marginally ahead of the S&P 500.
• For professionalised collectors and private offices, this environment favours selectivity, documentation and liquidity planning. Top-tier pieces in each category remain fiercely contested; mid-tier and speculative segments are where most of the price damage has occurred.

What follows is a concise briefing across the main asset classes ELITA covers, with an emphasis on practical signals rather than headlines.

By mid-2025, the investment landscape remains shaped by three forces:

1. Persistently higher base rates compared with the 2010s, even as markets price gradual easing.
2. Sticky inflation in services and labour-intensive sectors.
3. A structural expansion in private capital, particularly in Asia and the Middle East, where the UHNWI population is growing fastest.

For collectors and family offices, this has two implications:

• Carry costs matter again. Leverage against art, jets or property is no longer "free". The hurdle rate for holding lower-quality or marginal pieces has risen.
• However, real assets with proven scarcity are still in demand. In Knight Frank's long-run data, a diversified basket of collectables has broadly kept pace with, or slightly outperformed, global equities since 2005.

The task is not to abandon passion assets, but to treat them as a governed sleeve of the balance sheet – with clear entry criteria, time horizons and exit options.

2.1 Luxury investment index

Knight Frank's latest numbers show a fragmented picture for collectables over the last year:

Best performers 2024:

• Handbags: +2.8%
• Jewellery: +2.3%
• Coins: +2.1%

Flat to modestly positive:

• Classic cars: +1.2%

Weak spots:

• Fine art: -18.3%
• Fine wine: -9.1%
• Rare whisky: -9.0%

In aggregate, the Luxury Investment Index fell around 3.3% in 2024, its weakest year in more than a decade. Yet over 20 years the same index has compounded strongly, underlining the importance of cycle awareness rather than headline panic.

2.2 Global art market

The latest Art Basel & UBS Art Market Report estimates global art sales at roughly US$65 billion in 2023, broadly flat year-on-year, with the US share slipping as Europe and Asia gain ground. High-end evening sales have become more selective, with fewer guarantee-backed lots and a clear preference for museum-quality works with strong provenance.

2.3 Precious metals

Gold broke through US$2,100/oz for the first time in early 2024, driven by persistent central-bank buying and expectations of future rate cuts. Into 2025 it has traded close to those highs, reinforcing its role as a liquid hedge alongside more illiquid collectables.

2.4 Secondary watch market

After a speculative spike in 2021–22, the secondary watch market has normalised. Indices tracking "blue-chip" pieces from Patek Philippe, Rolex and Audemars Piguet suggest prices are 30% or more below peak levels, with a further mid-single-digit decline in early 2024, concentrated in the most hyped references. Liquidity remains robust for truly best-in-class pieces; opportunistic sellers of commodity models have found the new reality less forgiving.

3.1 Timepieces

Market tone

• Broad market: cooled and rational. Speculative day-trading has largely disappeared.
• Top echelon: still competitive. Early, rare or historically important pieces continue to attract multiple bidders.

Opportunities for collectors & offices

• Upgrade within the same budget. In many cases, a reference that required a premium in 2022 can now be acquired at, or even below, its original retail – allowing a quality step-up without extra capital.
• Focus on depth, not breadth. Coherent sub-themes (e.g. early QP chronographs, neo-vintage independents, period-correct sports models) are more resilient than scattered "greatest hits" buying.
• Documentation is non-negotiable. Given the increased emphasis on originality and condition, full papers, service history and expert inspection are now a baseline, not a luxury.

3.2 High jewellery

Market tone

Jewellery has been one of the few segments to post positive returns over the last year. Index data attributes this to enduring global demand for pieces by houses such as Cartier and Van Cleef & Arpels, and the perception of signed, high-quality stones as portable wealth.

Strategic themes

• Signed pieces with important stones – especially period creations or one-off designs – remain well bid.
• Unbranded but exceptional stones (old-mine cuts, high-colour, high-clarity) offer value but require expert gemological support.
• For private offices, there is an emerging overlap between jewellery holdings and estate planning, where pieces are ring-fenced or designated for specific family members. Clear inventory and insurance records are essential.

3.3 Fancy diamonds & coloured stones

The deep end of this market – superlative reds, vivid pinks and blues – is structurally supply-constrained. The closure of mines such as Argyle has removed a key source of certain colour profiles, while demand from Asia and the Middle East continues to rise.

In the last 18 months, auction results for truly exceptional stones have remained strong even as more commercial categories have softened, underscoring a principle that applies across asset classes: the further up the quality spectrum, the thinner and more resilient the market.

For family offices, the key questions are:

• Is the stone certified by a top-tier laboratory with clear origin and treatment status?
• Does it sit within a defined allocation to gemstones, or is it an orphan holding?

3.4 Hermès & handbags

Knight Frank's data identifies luxury handbags – led by Hermès – as the best-performing category in 2024, up 2.8% on the year and approximately 85% over the last decade.

Specific models – certain Birkin and Kelly leathers, limited colourways, Himalaya variants – trade with the same seriousness as watches or jewellery. For ELITA clients, these pieces increasingly feature in diversified passion-asset allocations and estate inventories.

3.5 Collector cars

Classic cars posted a modest +1.2% in the LII for 2024, a marked slowdown from the double-digit annual gains seen earlier in the decade.

Market dynamics

• Blue-chip stability. Halo cars (Ferrari 250 series, early air-cooled 911 RS, select McLaren F1s) continue to hold or gain.
• Mid-tier correction. Modern supercars and "spec-for-resale" builds have seen extended selling times and price resets.
• Regulatory overhang. Emissions restrictions, city bans and electrification narratives are reshaping collector psychology – though classic combustion icons remain highly desirable precisely because they are finite.

3.6 Private aviation

Demand for private jets surged during and immediately after the pandemic but has since normalised. Pre-owned large-cabin prices have softened from 2022 highs, while new-build order books remain extended at major OEMs.

For ELITA clients, the current environment offers acquisition opportunities in the pre-owned segment for those with clear usage profiles and an appetite for operating cost modelling. Fractional and charter alternatives continue to compete with full ownership for lighter users.

3.7 Yachts

The superyacht market mirrors aviation: a pandemic-driven surge has given way to more balanced conditions, with build slots at top yards still in high demand but pricing stabilising on the brokerage side.

3.8 Fine art

Fine art was the weakest category in Knight Frank's 2024 index, down 18.3% as high-end auction volumes contracted.

Context

• Trophy works (US$50m+) have seen fewer buyers willing to guarantee sky-high prices.
• The middle market (US$500k–$5m) remains more active, with selective demand for blue-chip names and emerging recognition segments.
• Private sales and advisory-led transactions are increasingly favoured over public auction exposure.

3.9 Estates & trophy property

Knight Frank's Wealth Report notes that super-prime residential sales (US$10m+) rose 7% in 2024, with a 30% spike in Q4 driven by post-election US activity and continued offshore demand in gateway cities. Monaco, Dubai and select US markets continue to attract capital flows from mobile UHNWIs.

3.10 Bullion & precious metals

Gold's move to record highs underpins bullion's role as the liquid anchor in a passion-asset portfolio. Allocated physical holdings in reviewed storage pathways offer optionality that watches, art or cars cannot: near-instant liquidity and global fungibility.

1. Quality over quantity. In a higher-rate, more selective environment, concentrated positions in best-in-class pieces outperform scattered holdings.
2. Documentation and provenance are non-negotiable. Full papers, service records, lab certificates and clear title are now baseline expectations.
3. Liquidity planning matters. Ensure some portion of the passion sleeve is easily realisable (bullion, widely traded references) to avoid forced sales of less liquid assets.
4. Stay opportunistic. Repricing creates entry points for patient, well-capitalised buyers with clear mandates.

The Private Desk remains available for mandate discussions, portfolio reviews and specific sourcing briefs across all asset classes covered above.