The coloured diamond is the phenomenon of the modern jewellery world. A highly concentrated form of wealth and among the most valuable of natural materials, the coloured diamond has in the past 10 to 20 years gone from a gemologist’s curiosity and glass-case mineralogical specimen to today’s ultimate luxury object of desire, the ne plus ultra of possessions. Natural coloured diamonds – cherry-blossom pink, powder blue, sunlit yellow, gooseberry green, vibrant orange, shades of earth and sky, sunrise or sunset – are now showcased in the highest of high jewellery, in private salons and exclusive jewellery houses across the globe. They grab the limelight and smash records in auction rooms in London, Hong Kong and Geneva.
The record for any jewel or gem at auction remains the fancy intense pink diamond of 24.78ct that sold at Sotheby’s Geneva to Laurence Graff for a staggering $46m in 2010. Meanwhile, the auction record price per carat for any diamond is $2.4m, realised by a fancy vivid orange pear-shaped example of 14.82ct sold for over $35m last November at Christie’s Geneva. In the past 10 years or so, prices have escalated at a frenetic pace – an appreciation, says Rahul Kadakia, Christie’s international head of jewellery, that was unthinkable a decade ago. In 2007, the finest pinks and blues were realising around $1m a carat, an immense sum; this May, at Christie’s Geneva, a ring set with a fancy vivid blue pear-shaped internally flawless diamond of 13.22ct was purchased by Harry Winston for $23.8m, $1.8m a carat. It was named the Winston Blue.
In October, Alisa Moussaieff, indefatigable diamond merchant and jeweller and owner of one of the most important red diamonds in the world, was on her way to Hong Kong to bid at Sotheby’s Asia for a superlative fancy vivid purple-pink internally flawless diamond that she believed would set today’s benchmark for coloured-diamond prices (in the event, it went for $17.8m; $2.12m per carat). “I believe in the continuing strength of the market,” she says. “There are so few important pieces of new rough coloured material and many educated, discerning buyers. As long as we can buy at today’s prices, tomorrow we will pay more, of that I’m 100 per cent sure.” So, not only does the coloured diamond lure with a mesmerising, unfathomable beauty, a unique, emotive blend of light and colour, it also dazzles as a hard asset.
“It’s a connoisseur and investor market,” says Jean-Marc Lieberherr, managing director of Rio Tinto Diamonds – although he prefers to talk of “collectability” or of “investments of passion”. His firm owns the Argyle Diamond Mine in Western Australia, the world’s only consistent source of pink diamonds of a very particular deep, candy-sweet hue and scintillating brilliance. Prices of Argyle pink diamonds greater than 0.15ct have seen on average sustained double-digit growth for the past 12 years, he says, and, on a normalised price-per-carat basis, have trebled since 2000.
In the US, The One and Only One is a group of leading diamantaires specialising in extraordinary coloured diamonds of “investment quality” that, says CEO Joseph Padulo, have doubled or tripled in value over the past 10 years. These stones (price on request) are specifically offered to ultra-high-net-worth individuals on a private, appointment-only basis and for a limited time.
Philip Baldwin, managing director and co-founder of Sciens Diamond Management and fund manager for Sciens Coloured Diamond Fund, explains, “We’re dealing here with the truly rarest of the rare. Prices for coloured diamonds haven’t fallen at a trade level since 1959, and in fact have gone up since then an average of 10-12 per cent per annum.” His private equity fund, which was set up in 2008 with partner Mahyar Makhzani and had a “handful of connoisseurs” as investors, now taps into a much larger investor pool that includes corporations and institutions. He partners with firms such as Asprey, showcasing diamonds in museums and exhibitions around the world. Coloured diamonds, states Baldwin, provide a bridge to the world of finance, but it takes an expert to know how to buy and when to sell. “We strongly believe the value is in the top end, in the finest, rarest coloured diamonds, the so-called ‘vivid’ and ‘intense’ stones. These have seen the biggest uplift.”
The value of rarity is undoubtedly the most significant driving force in today’s elite jewellery and gemstone market, and that rarity is at its most extreme in the coloured diamond. According to Andrew Coxon, president of the De Beers Institute of Diamonds, for every 100,000 gem diamonds unearthed there will be just one natural coloured diamond of the finest colour or intensity. Coloured diamonds, known as “fancy colours”, are evaluated less on brilliance, clarity or fire and more on intensity of colour, taking into account hue, tone and saturation. The highest colour grade, according to the classification system of the Gemological Institute of America (GIA), is “fancy vivid”, followed down the scale by “fancy intense”, “fancy” and “fancy light”. And what a difference a grade makes: a “vivid” stone can be between 30 and 100 per cent more valuable than an “intense” coloured diamond, even though the actual difference in colour may be minimal to the naked, unpractised eye.
Israel-based diamantaire André Messika tells me that his son has just shown him a diamond supposedly of pure orange colour (very rare, very desirable), offered to them at a pure orange price. Before buying, cutting and polishing it, Messika has to decide if there might be a touch of gold or yellow within the orange. Although the stone would still be beautiful, that could lower its value by as much as 50 per cent. He will spend a few days looking deep into it, deciphering, deciding.
A coloured diamond – formed through millions, even billions of years, deep in the earth’s mantle, like all diamonds – gets its colour from the random interaction or interchange of trace elements with its carbon make-up, or from the equally random distortions wrought by tremendous heat and pressure. Yellow diamonds, fresh and contemporary like golden sunlight, are the result of nitrogen in the crystal. Blue diamonds are formed when boron is present. Violet is believed to come from hydrogen in the carbon mix during formation. Green diamonds are created when natural radiation impacts a diamond after the crystallisation process. Pink, red (the rarest), purple and brown diamonds (the most plentiful) are even more mysterious; their colour results from distortion of the atomic structure of the diamond, compressed and changed by heat and pressure during the long formation process. And so the coloured diamond is a fabulous, unpredictable fluke of nature. Even when a rough crystal is found, it is not always possible to tell exactly what the end result will be; nature has the last word.
Resources are dwindling. The Argyle mine, where less than 0.1 per cent of total yield are pinks, may well be depleted within 10 years. The historic Cullinan mine in South Africa, operated by Petra Diamonds, offers up very few but superb rough blue diamonds; Petra says that since it took over the mine six years ago, it has mined 18m tonnes to recover around 5m carats and during this time has found five world-class blue diamonds. Petra has also recovered a mere sprinkling of bubblegum-pink diamonds (different in hue from Argyle pinks) at the Williamson mine in Tanzania, after acquiring it in 2009. There are yellow deposits in South Africa and also the Ellendale mine in Western Australia, which supplies Tiffany & Co with great success. Since 2009, Tiffany has had exclusive rights to Ellendale’s entire supply of yellow diamonds of the right colour and quality, what Melvyn Kirtley, Tiffany’s chief gemologist, calls “buttery”. It’s a reference to the historic Tiffany Diamond, a massive stone, some 128ct, discovered in South Africa in 1878.
While finds of intensely coloured diamonds are few and far between, marketing by Argyle (now a diamond brand in its own right), as well as jewellers such as Graff and Tiffany, has broadened appreciation and demand. This all makes for a supply-driven market, says Patti Wong, chairman of Sotheby’s Asia. “Buying coloured diamonds requires knowledge and also following a market. There is a great deal of energy in the market now, much of it coming from the mines, which understand marketing, the whole story.”
The story of coloured diamonds is also playing out at the new Star Diamond Private Jeweller, installed in sleek, modernist splendour at an upstairs gallery in London’s Mayfair. I say new, but this is really an evolution for Star Diamond Group, a leading diamantaire established in 1948. The private-jeweller venture is masterminded by Philippe Roth, son of Star Diamond Group’s Jacques Roth, and André Abadjian, a passionate, acclaimed dealer in diamonds and especially coloured diamonds, which form the heart and soul of the design-driven high jewellery showcased in the gallery. The shimmering, silky, articulated Giverny bracelet, for example, is composed of 259 pastel-toned diamonds, hand-picked by Abadjian over a number of years, to show the range of diamond colours and create the effect of light rippling on water.
Abadjian explains the recent rise and rise of coloured diamonds: “After 2008-9, people turned to tangible assets: art, property, coloured diamonds. White diamonds dropped in value after 2008, but coloured diamonds continued to rise unabated, largely due to scarcity, rarity and dwindling resources.” Over the past five years, he has seen fancy pink diamonds move from an average of $180,000 a carat to $350,000. Demand is broadening, and many clients are building collections. “As with art, clients keep buying. Once you’ve really looked at a coloured diamond, it’s hard to stay unmoved or dispassionate.”
While the “straight” colours, such as pink and blue, command a premium, he has seen growth in the so-called double colours, the in-betweeners, like orangey-pink and greyish-blue. (The second word in the description is the main colour and indicator of value.) “Some are magnificent, and there can be a little more opportunity in these stones.” He shows me a stunning 10ct greenish-grey diamond, with its captivating mix of dark and light. “A GIA report is important, but it’s more important to find a stone that speaks to you.” The greenish-grey definitely speaks to me. Abadjian breaks in on my gem reverie, adding that a violet-grey diamond, unique, intriguing and divinely sophisticated, is for the client who has absolutely everything.
De Beers’ Coxon agrees that beauty, allure and individuality, regardless of classification or certification, become even more important when it comes to choosing a coloured diamond. Sometimes the most valuable stone is not necessarily the most beautiful. “It’s very subjective; different people respond to different colours. And it’s addictive. Someone buys a fancy yellow, then they need a fancy pink, and so on.” At De Beers Diamond Jewellers – where coloured diamonds highlight the globe-touring 1888 Master Diamonds and Creative Solitaire collections – CEO François Delage also finds a parallel between the coloured-diamond phenomenon and the art-market boom, in terms of both investment potential and the desire to own a masterpiece. It is, he says, a mix of the financial and emotional, hard-headed investment and falling in love. “People are looking for good ways to store value, but also to enjoy lifestyle assets.”
These diamonds cannot be pigeonholed or categorised in an exact scientific way. The process of evaluating the subtleties of colour differentiations, the nuances of shade and tone, the way they play with light, interacting with the fire and brilliance of the stone, demands expertise and cultivated taste. The elements of connoisseurship and subjectivity set coloured diamonds apart from white ones, which can be clearly classified and commoditised.
These aspects also offer an additional window of opportunity for keen-eyed experts. Sciens Diamond Management’s Baldwin agrees that the specialism and acute sensibilities required, coupled with the opacity of the market, appeal to collectors and investors alike. “As a fund, we look to add value to the stones, sometimes in building collections, in finding matched pairs or in repolishing to improve colour and clarity.” Two round, matching vivid coloured diamonds, he explains, could double each stone’s value.
Recutting coloured diamonds is the sacred territory of specialist coloured-diamond cutters and polishers, mostly based in Israel or New York. It is, of course, hugely risky; one degree more or less and a stone could be ruined. It is a process demanding near-mystical expertise and artisanship, not to mention diamantine nerves. Laurence Graff is revered the world over for his ability to see true colour potential inside a stone and for his courage in repolishing stones such as the record-breaking $46m pink. It was transformed from fancy intense to fancy vivid, to become the Graff Pink – a paragon of perfection and even more valuable. The stunning yellow Delaire Sunrise is also among his standout diamonds.
Graff’s audacity showed again this year when he and his son, CEO François Graff, assembled an entire collection of spectacular coloured diamonds, amassed over two years, and piled them onto a $55m high-jewellery watch, the Hallucination. Graff has also been instrumental in changing perceptions of coloured diamonds. He was one of the first to use Argyle pinks in the 1980s, and in the 1990s made a speciality of superb yellow diamonds, which, says François, are now a Graff hallmark. He has seen growth accelerate in the past five to 10 years, with premium-coloured diamonds – the best in their class – having “quadrupled or quintupled” in value. “There is no reason this won’t continue,” he adds. “Wealth has grown, there are fewer and fewer stones available, plus collectors don’t want to give them up. There’s not one occasion when we’ve parted with an important coloured diamond that we haven’t regretted it.” This summer he sold a 20ct blue diamond, a special, exceedingly rare, immensely valuable stone, to a European client who had to prise it out of his hands. “I will never see its like again, nor will my children or grandchildren.”
The phenomenon of the coloured diamond looks set not only to strengthen at the top end, but to filter down into younger, less formal fine jewellery, as at Messika, the dynamic diamond brand launched by Valérie Messika (daughter of diamantaire André), and into more accessible jewels through less valuable but fashionably seductive diamonds in shades of brown. At Rio Tinto Diamonds, Lieberherr says, “The darker cognacs are starting to gain significant status.” Meanwhile at De Beers, Delage is savouring the shift towards more esoteric, less definable colours, shades of green, grey and purple. “We live in a world where people are always seeking the most precious, wanting what others can’t or don’t have. These diamonds are not only rare but unique; the only ones of their kind.” The wondrous coloured diamond, the one and only. The absolute.