The new stone age

The desire for rare gemstones is growing among both consumers and investors. As seasonal sales peak, Vivienne Becker reports on the new connoisseurship.

Leviev yellow diamond necklace, worn in a Pamella Roland fashion show.
Leviev yellow diamond necklace, worn in a Pamella Roland fashion show.

This week a galaxy of glittering guests, flown in from across the globe by Harry Winston, gathered in Washington DC to view a very special stone. What drew these illustrious visitors to the US was not just another high-priced headline-grabbing rock, but arguably the most famous gem in the world: the Hope Diamond. This exquisite blue diamond, said to be bedevilled by a legendary curse, has just gone on display at Washington’s Smithsonian Museum in its new setting, chosen last year by an online public poll in the US.

At the same time, Harry Winston revived its lavish “Court of Jewels” exhibition of exceptional diamonds and other gems which toured the US and Europe in the 1950s, though this time the event was confined to Harry Winston’s flagship store on Fifth Avenue in New York. The exhibition paraded gem rarities, including a 15ct D flawless briolette-cut diamond pendant, and a 30ct Kashmir sapphire ring.

Tiffany yellow diamond necklace, £1,897,000.
Tiffany yellow diamond necklace, £1,897,000.

What makes these events significant is that they are emblematic of a shift in the rarefied world of high jewellery, a move that puts the focus firmly back on the purity of the ultra-precious, ultra-rare gemstone. As Frédéric de Narp, CEO of Harry Winston, says: “Now is the time to bring back the power of the stone.”

This shift is in part a reaction to the escalating drama of high jewellery in recent years, in which complex design has taken precedence. This has led to a desire for a cool, calm, classic but contemporary alternative. But the move towards gemstones is also driven by a loss of confidence in traditional assets and a renewed perception of the gemstone as a safe store of wealth – a tangible, desirable asset with serious investment potential.


Lending extra momentum to the trend is a fast-growing appetite for important gems and statement jewellery in emerging markets – China, India, Russia, Brazil. François Curiel, president of Christie’s Asia, and international head of jewellery, says, “With the arrival of new buyers from China and Russia, and the financial difficulties of the past few years, we have seen a greater number of collectors wishing to buy quality gemstones as an investment, or simply for safekeeping, fuelling an increase in prices for the top level of gems and jewellery and a greater appreciation for rarity.”

Scarcity is a key factor in today’s renewed focus on the gemstone. According to Curiel, the value of rarity is widening the price gap between the fine and the truly exceptional: “The benchmark of $1m a carat, which prevailed for decades, has risen to $2m a carat in just a couple of years for a gemstone of the highest quality.” And Laurence Graff, whose presence has dominated the market for decades, recently unveiled two of the world’s biggest and finest diamonds: the Graff Constellation, a 102.79ct D Flawless round brilliant, and the spectacular fancy vivid yellow square emerald-cut Delaire Sunrise diamond, 118.08ct. He describes the Graff Constellation as “the definition of rarity. Diamonds of significance are so hard to find that you never know if another will appear. This rarity increases their attractiveness from an investment point of view.”

The Blue Room of Leviev’s Moscow boutique.
The Blue Room of Leviev’s Moscow boutique.

At the same time, the crucial level of expertise needed to quantify the value of rarity keeps the market “real”, as opposed to the late 1970s/1980s crisis when diamond prices were artificially inflated by indiscriminate commoditised investments.

It is also what prompted Philip Baldwin and Mahyar Makhzani, both with years of experience in high jewellery and diamonds, to set up a coloured-diamond fund 18 months ago. “It was perfect timing,” says Baldwin, “as coloured diamonds have seen such strong demand, particularly with the growth of markets in China, Hong Kong and India, as well as the Middle East. A vivid blue pear-shaped diamond of 7.96ct made $443,014 a carat in 1999; 10 years later, a comparable 7.03ct vivid blue stone fetched $1,349,752 a carat.”

Mahyar Makhzani (left) and Philip Baldwin, investors in coloured diamonds.
Mahyar Makhzani (left) and Philip Baldwin, investors in coloured diamonds. | Image: Sim Kanety Clark

The fund, attracting ultra-high net worth investors and institutions and projecting a 20-25 per cent annual increase, operates on three levels. The first is arbitrage and short-term trading. The second is a medium-term strategy aimed at improving the value of a stone, usually involving subtle repolishing or waiting to find a match to create a pair (a pair of 5ct heart-shaped yellow diamonds can demand a 45 per cent increase per carat over a similar single 5ct diamond). The third level is “hold” – keeping a stone as a longer-term proposition.

It was not long before Baldwin and Makhzani found the “corporate backbone” they needed in John Rigas, chairman and CEO of Sciens Capital Management, a New York-based diversified alternative investment management firm, who also happens to be chairman of Asprey. Rigas studied the market for a long time before identifying this area as a potential new asset class and forming a joint venture now named the Sciens Coloured Diamond Fund.

Gems from Harry Winston’s “Court of Jewels”.
Gems from Harry Winston’s “Court of Jewels”.

“Since the [financial] crisis, the emphasis throughout the luxury sector is on products that retain their value,” says Rigas. “Within the jewellery segment, the more sophisticated investor is looking for coloured diamonds as a store of significant value that works against inflation. Prices have gone up more than 10 per cent a year over the past 37 years and the market can’t be flooded or artificially influenced. But,” he adds, “you have to buy and sell properly.”

There is great synergy in the set-up: Asprey will now have access to some of the finest specimens via the fund, which will also be on tap to meet special orders or commissions, and a new collection and series of travelling exhibitions are planned.

Graff’s new salon in Shanghai.
Graff’s new salon in Shanghai. | Image: Graff

It’s a similar story at the De Beers Group. Stephen Lussier, executive director, and CEO of Forevermark, the De Beers diamond brand, says: “Diamonds have shown a strong recovery in prices since the downturn. The fact that diamonds have intrinsic value and, more importantly, that they hold and grow it, certainly contributes to people’s desire.” This desire can be channelled in two ways: first, into loose stones, bought at auction or through specialists such as, a division of diamond broker H Goldie; and second, more appealingly, into jewellery in which the stone is the main event.

In this case, clients turn to the great classical jewellers – Graff, Harry Winston, Moussaieff, Leviev and Alexandre Reza, perhaps the greatest gem collector of modern times – for whom high jewellery has always been about celebrating the purity of the stone and honouring its intrinsic value. Alisa Moussaieff believes that connoisseurship on the part of the client characterises today’s market. “My clients have always been very seriously investment conscious, but now it’s about gaining in-depth knowledge about the gemstones, in order to make a worthwhile investment.” The resulting demand for exceptional stones, especially from the new markets such as China and India, is creating scarcity. Some 20 per cent of all diamonds polished in India are also bought there.


Lisa Klein, executive vice-president of Leviev, confirms that there are fewer desirable stones than previously available. Leviev, whose parent company is responsible for mining one third of the world’s diamonds, takes the top one per cent for its own brand. “Our clients insist on only top quality – they know it will retain its value. These stones have continued to climb steadily in price over the past few years.”

But there is another, more subjective, even poetic dimension coming into play: the superlative gemstone as a work of art. Andrew Coxon, executive vice-president of De Beers’ Diamond Institute, says this new subtext is not a question of what is rare on paper, it is about moving beyond the formulaic criteria of the “four Cs” (carat, colour, clarity, cut), and looking for the beauty of a work of art. “The eye, brain and heart measure the qualities of a stone in a flash, producing an emotional reaction that a client should trust.”

Perhaps the most intense emotional responses are those triggered by precious coloured stones, especially the traditional gems: Kashmir sapphires, Burma rubies, Colombian emeralds. These classic stones, with their rarity value, their association with connoisseurship, are sharing in the renewed focus on purity. David Bennett, chairman, Europe and the Middle East, at Sotheby’s international jewellery department, feels that greater growth potential could lie more in fine-quality coloured stones than in diamonds. “This is not acknowledged as widely, and judging the stones is much more subjective. No two rubies are similar; I’ve seen probably a handful of super-quality 10ct rubies in 35 years in the jewellery business.” Graff acquired the 15.97ct Mogok ruby, from the now extinct Mogok mines in Burma and said to be the finest in the world, in 1987 for more than $3.5m. He has bought and sold it three times since then, most recently for more than five times the original price. “Rubies of significant size and quality have increased in value as much as diamonds, and are exceptionally rare. A ruby to compare with the Mogok ruby will never be seen again.”

As the gemstone comes into focus, so jewellery design is changing to reflect this, generating new interpretations of traditional settings. At Sotheby’s Diamonds, a joint venture with diamantaire Steinmetz, creative director James de Givenchy brings a sleek, strong but sensual edge to his settings for the finest stones, often using blackened steel and rubber (from $50,000), while at leading jewellery houses modernity is achieved by a new lightness, settings with “more air”, says Moussaieff. For Raphaele Canot, creative director of De Beers Jewellers, it is a question of introducing a “new soul” to classicism, through exquisite, symbolic detail – a tiny love-knot, a flower – but with no nostalgia, no fuss, no drama. Its Aura Collection rings a stone with an “aura” or outline of radiant micro-pavé light, sometimes in pink diamonds (from £3,400; £8,150 for pink diamonds). “Colour is a vital element, not in the mix, but in little details, or in the metal, like an eyeliner around the stone,” says Canot.

Tiffany has responded to the new mood this season by launching a collection of yellow diamonds (from £1,475) that cleverly also pays homage to the monumental Tiffany canary-yellow diamond that is so much part of its story. The designs are modern-traditionalist, with the all-important lightness, and settings that flatter yet take second place to the sun-coloured diamonds.

So, it is all about the stone. And while jewellery always tops wish-lists at Christmas, this year a gift of one substantial, serious, “investment” gemstone must be a likely contender. Or as Daniel Goldberg of IDH Diamonds, Antwerp, says: “Today, the gemstone represents order – calm, reassuring, perfectly created by nature, rare and pure.”

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