The whacky investments of the rich

What a horrible end to the year for Newcastle coal billionaire Nathan Tinkler.

In the space of a week, Tinkler had his luxury beach house broken into, and his $500,000 Ferrari California stolen.

The car, one of only five in Australia, was later found abandoned and burnt out in bushland outside the city.

Then, to make manners worse, the Tinkler vehicle set to acquire the Newcastle Knights rugby league club missed a key deadline to provide a $20 million bank guarantee – a key part of the takeover process.

Tinkler’s Hunter Sports Group says deal to buy the club remains on track, although it could take longer than anticipated.

Tinkler might have ridden the resources wave brilliantly in the business world, but for the moment at least, it seems it can’t take a trick with what wealth advisors like to call “passion” investments – and what the rest of us think of as “because they can” splurges.

According to the World Wealth Report released last week by Merrill Lynch Global Wealth Management and Capgemini, spending on passion investments – which includes art, luxury collectibles like cars, boats and jets, sporting teams, and jewellery – rebounded in 2010 across all categories.

The art world saw several paintings sell for more than $100 million each (including a Giacometti and a Picasso); record prices were set at diamond auctions and a record $US91.2 million total for Christie’s main fine and rare watch auction.

Rare coin sales surged, while fine wine sales rebounded strongly from a post-GFC slump. According to the Wealth Report, Sotheby’s sold $US88.3 million in wine at global sales – double the 2009 sales.

But passion investments aren’t all about fine art, jewellery, wine and cars.

The rich also like to splurge on some rather unusual items as they indulge their passions. Here is a selection of quirky big buys from the last 18 months:

The $2.2 million cowboy photo

Last week US billionaire (and noted Tea Party supporter) William Koch made headlines when he splashed $US2.3 million on what is believed to be the only surviving authenticated portrait of cowboy icon Billy the Kid. Organisers at Brian Lebel’s 22nd Annual Old West Show & Auction in Denver expected the item to fetch about $US400,000. “I love the old West,” Koch said later. “This is a part of American history.”

The $330,000 mushrooms

In November 2010, Macau’s casino billionaire Stanley Ho spent $US330,000 on two white Italian truffles – the second time he had spent that amount on the ultra-expensive fungi. And amazingly, they aren’t even edible. “They’re mostly or entirely unusable for culinary concerns,” Britt Bunyard, publisher of Fungi magazine, told Forbes in December last year. “They’re over-mature, split open, and often have bad or decomposed parts. The truffle connoisseur would pass them over for younger, fresher ones.” Don’t tell Stanley!

The $46 million diamond

British billionaire Laurence Graff is the king of the upmarket jewellery world. His 31 stores around the world serve famous clients including the Sultan of Brunei. In November, Graff spent $46 million at an auction in Geneva for a rare 24.78-carat pink diamond, which was last offered for sale by another jewellery legend, Harry Winston, 60 years ago. Graff immediately renamed the stone “The Graff Pink” and described it as “the most fabulous diamond I’ve seen in my career”.

The $16.7 million cranes

Not live cranes, of course, but two exquisite five-foot statues that are thought to have been owned by the Chinese Imperial family back in the 18th century. The buyer was Joseph Lau, a property developer, art collector and the fifth richest man in Hong Kong. Cranes are a symbol of longevity in Chinese folklore and the provenance of the cranes – they had been in the same English mansion for 150 years – made them highly sought-after when they came to auction in December last year.

The $4 million wedding gift

What do you get for a man who has everything? A helicopter, of course. When New Delhi businessman/politician Lalit Tanwar married Yogita Jaunapuriais in a $22 million affair, the bride’s family gave the groom a Bell 420 helicopter, worth an estimated $4 million. Tanwar worked hard to be modest after the lavish event. “True, a Bell 429 helicopter was given,” he told the Indian press. “But it was a simple wedding.”

The $1.5 million dog

In March, an 11-month old red Tibetan mastiff pup named Big Splash was sold in the Chinese city of Qingdao for a staggering $US1.5 million to an unnamed buyer, described as a wealthy coal baron. The dogs are renowned as one of China’s most prized breeds – legend says Genghis Khan and Buddha each had one.

The $200,000 pigeon

It’s not just ceramic cranes that command a big price. In February, a wealthy Chinese bidder (who remains unnamed) paid $200,000 for a racing pigeon named Blue Prince. The auction for the bird was held in Belgium, and while bird racing has a long history in Europe, it is apparently even bigger in China, where big races are held for big money – and attract big gambling action.