2012 Diamond Investment Forecast

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Geminii proudly present the premiere and official edition of the Global Diamond Investment Forecast in compilation with the leading industry figures within wealth management, asset ownership, geology and alternative investment activity.

This is the first ever type of activity to provide interested investors - both private and corporate - the opportunity to delve in to the minds of a variety of industry spearheads and gauge a thorough analysis and appreciation of the prospect in question.

Visit www.geminii.co.uk for further information

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2012 Diamond Investment Forecast

  1. 1. 2012 Global Diamond Investment Forecast Complied in association with:
  2. 2. “Throughout the course of 2011, investments within and in 2012 plan to release ‘The ABN AMRO Guide to seized from Cecil Rhodes by Ernest Oppenheimer, onethe diamond asset class surged, partially due to the the Diamond Market’ as a result. We are confident that of the founders of Anglo American ironically. Theincreased media publicity of this arena but also in line we will continue to see the emergence of a series of remaining 15 per cent remains held by the Governmentwith additional crucial factors. Although they are not international diamond funds with a similar perspective of Botswana. Analysts and Executives at Anglothe first choice for investors seeking a quick gain; to the aforementioned, with the attempt to target American are delighted with the acquisition in line withsavvy, shrewd and patient investors can expect larger corporate and institutional investment bodies, their projections for the diamond industry as a whole.handsome returns if the exclusiveness of diamond and this will again, gauge a stronger perspective within More recently we have also learned that BHP Billitoninvesting and the potential are instructed alongside a the global financial media. are currently ‘reviewing’ their diamond arm of businessformulation of the correct strategy. Investment activity with the strong possibility that a large segment will be “Coloured diamonds have already started to penetrate the sold in 2012 as BHP Billiton state the diamond businesswithin other alternative and/or lifestyle asset classes is mainstream. This past year has seen news reports on CNN no longer sits and fits well with their personal agendatypically and more widely recognised, whilst the and Fox Business - as well as articles in the Wall Street Journal and strategy. On the other hand, Alrosa may not be ainvestment grade diamond market simplifies from a and other major periodicals - discussing Argyle Pink Diamonds, name on everyone’s lips at present; they are howeverstealth position as a direct consequence of remaining important auction sales, along with dealer and retail sales of by quantity, regarded as the largest diamond miner.below the radar as such”, starts Sharanjit Singh Rao. coloured diamonds. Given this, the general public is becoming The state owned Russian diamond miner is planning aThe increased global publicity by the financial press more aware of the value and rarity of coloured diamonds. We hefty IPO in 2012 which is widely expected to reach aand media of this sector will change the ‘below the expect to see this trend advance and develop in the coming minimum of 1.5-2 billion USD and are considering aradar’ status over the course of 2012 and has years. listing in London at this stage, so during the course ofundoubtedly prepared investing professionals to 2012 it may fast become a name to remember?consequently think about the thought of diamond One needs only look at the coloured diamond market ten years Subsequently, Rio Tinto may be a more familiar nameinvesting as a viable prospect. This has been ago to see that it has grown by leaps and bounds in a fairly that springs to mind. For the past years the Argylesupplemented by the emergence of a number of short period of time. Thus, with growing pressure on supply and an ever-increasing demand base, coupled with the Diamond Tender has been taking place and this hasinternational diamond investing funds, with the prevailing financial conditions, the market is poised to enjoy a attracted the attention of connoisseurs, collectors andprimary aim of ‘pooling’ investor capital and investing very strong period of activity in the future. investment professionals equally. The Diamond Tenderin to the direct acquisition of larger, rarer coloured and is the highlight of the coloured diamond industry’scolourless gemstones. The Rapaport Group for When you take into account the fact that only a very small calendar, with all equally drawn to the highly desirableexample, headed by industry spearhead Martin percentage of the diamond-buying public owns a coloured and sought after Argyle Diamonds. The Argyle Mine inRapaport, plan to launch the Rapaport Diamond Fund in diamond, and further consider the potential for new the East Kimberley region of Australia produces almost2012, initially offering institutional and corporate a mere one carat from every 1 million carats of buyers making acquisitions, there are very good prospects forinvestors the opportunity to buy and hold polished diamonds mined, and the diamonds are extensively the market going forward” claims Stephen Hershoff.diamonds with high analyst expectations to increase considered as the finest pink diamonds in the world. Inthe size of the fund to the 100 Million USD region Furthermore 2011 also witnessed a series of 2011, 55 diamonds were placed within tender andwithin the opening six months. This will certainly gain management decisions by some of the leading industry attracted the prime attention of a number of newthe attention of many corporate and institutional institutes. The largest which comes to mind is the De markets alongside the traditional markets. Rio Tintoinvestors alike, some of whom have been and are Beers buyout from the Oppenheimer Family. Anglo recently extended the life of the mine until 2017 -19 byalready considering and partaking within the prospect, American increased its stake in De Beers from 45 to 85 expanding procedures from the open pit mining system per cent after acquiring the Oppenheimer stake of theABN AMRO Bank for instance, have recently created the to the more elusive and expensive underground mining business. The company has been owned by theInternational Diamond and Jewellery Group (ID&JG), procedure, by committing to a 1.5 billion USD Oppenheimer Family since 1927 when control was
  3. 3. program. Investment diamonds released from the Argyle Mine are undeniablyprincipal investment prospects and a true beauty and miracle of nature, and as aresult command a sound appreciation because of rarity, diminishing supply andexpected finite resource status; coupled with the already apparent growth andappreciation visible within the pink diamond sector and market; so without a doubt,the 2012 Argyle Diamond Tender will definitely be one to watch out for, especiallyas we draw closer to the 2017 -19 mark. 110.03 Ct ’Sun Drop Yellow’ 24.78 Ct ’Graff-PinkStephen Hershoff is confident that “The most important development is theincreased acquisition of rare Argyle Pinks. Rio Tinto has done a fabulous jobeducating consumers, retailers and dealers on the beauty, grading standards and Christie’s and Sotheby’s are regarded as the leading entities in the auction world,rarity of their pink stones - especially at the annual Argyle Tender - and this has and both loose diamonds and diamond jewellery have benefitted from there globaltranslated into a strong increase in sales for these types of stones. reach as a result. Industry observers agree diamonds are maintaining and achieving record breaking prices at the global hubs of Geneva, New York, Hong Kong andGiven that the Argyle Mine is expected to close in the coming years, and that this London, attracting record audiences and participants from a worldwide client base.Mine produces over 90 per cent of the world’s supply of rare pink diamonds, many “In this new climate, large coloured diamonds, rare gemstones, and signed jewelsbuyers at the dealer, collector, investor and retail level want to acquire these rare are attracting an ever-expanding community of collectors and investors frompieces before it is too late, placing an upward pressure on prices. Argyle pinks around the world,” François Curiel, International Head of Christie’s Jewelleryhave been one of the strongest performers in 2011 and should continue to lead Department, noted recently.the market through 2012. But why, is the question which principally comes to mind?The supply has become so scarce that for the first time ever, Argyle offered severalstones well below a 0.50 carat at their annual tender. In the past, the cut off was Stephen Hofer states that “Since the release of my book ‘Collecting and Classifyingusually around a half carat, but this year they had stones of 0.30 carats, 0.36 Coloured Diamonds’ in 1998, the coloured diamond market has grown incarats, 0.42 carats and other pieces well below a half a carat in size.” considerable leaps and bounds, as new investors flock to this rare commodity in record numbers. This is most evident at the public auctions, where experiencedAs natural fancy coloured diamonds continue to shatter records, the highest ever dealers are bidding against wealthy private clients for the top stones, with manypaid for a diamond or jewel at auction was for a 24.78 carat Fancy Intense Pink (VVS cases; the private clients are submitting the winning bids. I believe this trend will2 Grade) diamond at Sotheby’s in Geneva in November 2010. 2009 and 2010 continue for the future, as private clients begin to acquire more knowledge andadditionally saw a number of record breaking diamond acquisitions from auction confidence in this one area of investing.houses across the globe and the 46.1 million USD ‘Graff -Pink’ as it was renamed,was purchased by Laurence Graff who declared “It is the most fabulous diamond I With that said, I think that private clients are eager to obtain more knowledge onhave seen in the history of my career and I am delighted to have bought it.” the subject, and yet acquiring accurate knowledge on coloured diamonds isNonetheless 2011 witnessed a series of momentous significant auction purchases difficult, as there is general confusion in the market regarding the exact colour ofalong similar lines. The ‘Sun Drop Yellow’ – a 110.03 carat Fancy Vivid Yellow (VVS 1 some stones, and there is a lot of misinformation being passed off as ‘truth’, andGrade) diamond sold for a record 12.4 million USD, achieving record results as the opinions differ as to which colours are the most valuable, which colours are thehighest ever fetched for a yellow diamond at auction, at Sotheby’s in Geneva in most saturated, which colours are truly pure colours, and which colours are theNovember 2011. It sold for an amazing 112,347 USD/per carat in comparison to the most rare, etc. However, this confusion regarding the colour grades also presents a‘Graff-Pink’ which managed to achieve 1,862,739 USD/per carat. unique opportunity in the market for the savvy investor, because there are some
  4. 4. stones that ‘fly under the radar’. In other words, certain fancy colours are not carat, as well as the Elizabeth Taylor collection of yellow and cognac diamonds,immediately recognised as a great treasure. Sometimes inherently rare, or highly which went for 5-10 times the estimated selling price. There were also importantsaturated stones, or well-made stones are overlooked, or not recognised at first, sales of one of a kind stones, like the Graff Intense Pink, which sold for over 45yet these unique gems represent a hidden value as an investment.” million USD, and the Wittelsbach Blue, which sold for over 24 million USD.The global high net worth and respective investing communities continue to actively In short, the last couple of years have seen coloured diamonds truly take overseek out areas which illustrate and identify preservation and directly storage of the headline sales at the major auctions around the world.”wealth. An investment grade diamond for instance is regarded as the mostconcentrated, portable and as equally as importantly, private form of wealth in the We have been collectively experiencing immense levels of uncertainty, 2011 willworld to date, some even go as far as to regard it is real estate in your pocket. particularly be remembered for the ‘Arab Spring’ for example. These protests illustrate civil resistance, resulting in a primary effect on the globe, as a result ofStephen Hershoff states that “Owners should be aware that coloured diamonds are the Middle East and North Africa and enraptured volatile times, consequentlyan unregistered hard asset, and not defined as a monetary vehicle by regulatory producing stock market upheaval, and gold and oil price fluctuations.bodies.” He further adds “Investors are always attracted to the privacy andportability of rarer coloured diamonds, where you can literally fit millions of Stephen Hershoff feels that “The volatility in global markets will continue todollars in the palm of your hand and discreetly transport it anywhere in the world. increase buying activity in the coloured diamond market as people move aThe flexibility that the market offers is probably the most important factor they percentage of their wealth out of paper assets and into tangible assets.consider when looking to put some of their hard earned dollars into rare coloured Historically, wealthy merchants, industrialists and royal families have always kept adiamonds. much higher percentage of their wealth in tangible assets than we see today. All the paintings, rare furniture, coins, antiquities and jewelry changing hands throughIn addition, coloured diamonds have always been a good hedge against currency dealers or at the auction houses each year represent real wealth in real assets,devaluation and inflation – yet another reason why interested parties consider rare which also have the benefit of possessing elements of beauty, rarity andcoloured diamond acquisitions. Henri Barguirdjian, President and CEO of Graff, USA craftsmanship that people can appreciate and rely upon rather than suffering thestated: ‘I would rather have my money in rare diamonds, than in stocks or a bank.’ vagaries of many other forms of investment.”And of course the fact that they are so unique, beautiful and rare is the ultimate The stock markets in particular to the gold and oil markets independently andattraction. To hold a gorgeous pumpkin orange or rose pink diamond in your hand collectively experienced an extremely turbulent period regardless of what theand see the vibrancy of colour, the stunning reflection of intense beauty that the situation was around the Middle East and North Africa. Throughout the course ofstones emanate, is an indescribable feeling for many. With each stone utterly 2011, the lack of resources on part of a majority of investors, restricted them to notdistinctive and having its own history, the sheer wonder of these items Mother be in a position to monitor the effects and external influences and without theNature created over the course of hundreds of thousands of years engenders strong opportunity to have constant access to an online connection were unable to payemotions relating to their value, power and beauty.” viable phases in order to readjust the position and holding.Stephen Hershoff continues by saying “In the last two years, the coloured diamondmarket has seen a number of significant developments. The most recognized is, ofcourse, the new record prices at major auction houses for several categories of themarket. In May 2011, a 9.08 carat emerald cut Fancy Vivid Yellow diamond sold inHong Kong through Christies for almost 1.15 million USD, a 3.18 carat marquiseshaped Fancy Vivid Blue sold for almost 3.3 Million USD in New York throughSothebys, and a 0.91 carat Fancy Vivid Purplish Pink sold for over 242,000 USD/per DJIA Index (2011) FTSE 100 Index (2011)
  5. 5. The Eurozone Debt Issues will also be noted during the course of 2011, with Italy India and China recently entered in to large lucrative deals with Canada andand Greece achieving particular limelight status for the wrong reasons. Both nations Belgium respectively during 2011 to enhance the commitment and endurance of theexperienced extreme difficulties during the course of 2011 resulting in loss of diamond investing community, with Canada and Belgium already establishedconfidence, re-elections and large bailout assistance from the EU, IMF and diamond communities forging expansion in to semi -established and ever-increasingSovereign nations. This fiasco imploded on to the global markets and resulted in communities of India and China. Global business research institute IBIS -Worldcarnage and bought an extreme slowdown to financial markets as all awaited the recently forecast a 39 per cent increase in diamond and gemstone revenuesimportant news and events to unfold. Some financial and investors commentators throughout 2012, "The revenue rebound will be driven by stabilizing prices andeven expected the ‘Euro-Collapse’ to take effect, and even went as far as to higher production levels, which are forecast to increase by 39 per cent," Karencomment that should this be the case, it would have led to similar if not a worsened Dobie, IBIS-World General Manager said.situation, then that of years prior in 2008 during the Lehman Brothers Investment Stephen Hershoff feels that the decline in production of major diamond minesHouse collapse and the knock -on domino effect which constantly ensued. around the world plays a significant role. “With Argyle production down over 60 perThe UK in particular experienced an extremely turbulent ride throughout the course cent in the last three years, South African production down over 30 per cent fromof 2011 as a result of its lack of ‘independence’ and in turn, positive correlation to its previous highs of 2007, global diamond production continues to decline at aboth the US and the Eurozone. Property prices in the UK have remained extremely time when demand is growing at a healthy rate. A major developing factor behindstagnant and traditional property investors have also been feeling the slump as a this is the growth of coloured diamond sales in the BRIC countries as well as otherdirect result, in line with current bank lending criteria. secondary markets. From Dubai and Mumbai to Hon g Kong and Sin gapore, coloured diamonds have been one of the strongest p e rf or m er s at th e r eta il,A number of emerging markets nonetheless have been experiencing buoyant au ct ion an d d ea l er l e ve l . Ti f fan y s Y el lo w Di am o n d Collection was so successfulprosperity. India and China are the first to fast come to mind but, they are no that they had to pay over 20 per cent more for their yellow diamond rough fromlonger alone: Dubai, Russia, Brazil and Japan have all made their individual yet the Australian Ellendale Mine earlier in 2011.”imperative marks on the investment world alongside the diamond investingcommunity. Dubai for instance, impressively increased diamond trading by 58 per Diamonds MSCI S&P ML Life- Gold Spotcent throughout the course of 2011; Ahmed Bin Sulayem, Executive Chairman of World GSCI TR style Index USD/OzDubai Multi Commodity Centre (DMCC), commented “This year’s record diamond ₁ ₂ ₃ ₄trading volumes are testimony to Dubai’s global standing in the diamond industry. VolatilityThe DMCC is proud to have cemented Dubai’s place amongst the top three diamond 3.5% 17.0% 15.5% 24.5% 19.0%centers in the world.” In addition, the Shanghai Diamond Exchange (SDE), theprimary and leading Diamond Bourse in China illustrated an equally impressive year Average 19.3% 4.5% 3.0% 9.5% 19.0% Growthon year diamond trading increase of 63 per cent throughout 2011. China alsoovertook Japan as the world’s second largest diamond importer throughout the Linked 1.00 -0.09 -0.08 -0.04 -0.15course of 2011 and India and Russia are not far behind in any aspect whatsoever. CorrelationConsiderable additional emerging economies are set to take centre stage Inflationary High Low Medium Medium Highthroughout the course of 2012 with the CIVETS (Columbia -Indonesia-Vietnam-Egypt- HedgeTurkey-South Africa) nations being mentioned frequently at present, all of whom Recessionalready have an active role and presence within the diamond world fortuitously High Low Low Low Medium Proofenough. However the typical BRIC (Brazil -Russia-India-China) nations are undeniably ₁Diamond pool is equal to core allocation from 14 global institutes and based on loose coloured diamonds only ₂Morgan Stanley Capitalnot to be ruled out just yet as they have and will continue to expand. International World Index ₃Standard & Poor’s Goldman Sachs Commodity Index Total Return ₄Merrill Lynch Lifestyle and Luxury Index *This data illustrates a comparative index relationship January 2005/October 2011 Source: Rapaport Group, Merrill Lynch, Goldman Sachs, Morgan Stanley, Bloomberg, Reuters, Berenberg Private Capital, Geminii Limited
  6. 6. The information displayed Table #1 works very well in description. In the end, a coloured diamond is not Stephen Hershoff goes on to add “ There was a timeline with the current distinguishing factors in play. merely a simple colour description printed on a grading 10 years ago when you could buy a (steel-coloured)There are in addition many ‘myths’ still active in an report, polished coloured diamonds are actually tiny, Grey Blue one carat diamond in the region of 40 -investor’s mind surrounding these endeavors: De Beers crystalline, ‘works of art’, which combine the unique 50,000 USD/per carat. Now you are hard pressed tocontrol the monopoly and in turn the supply of qualities of nature (i.e., hue, lightness, saturation, find an option similar to that for less than 150,000diamonds and that diamonds are considered to be rarity, etc.), with the expert skill of a master craftsman USD/per carat … We feel that new heights willextremely illiquid for example, but these are exactly (i.e., shape, proportions, facet pattern, polish, gradually be reached in the main growth segments ofthat – myths. A number of decades ago De Beers may symmetry, etc.), which unlocks their ultimate beauty, the market — namely high quality pinks, blues, yellowshave had a stranglehold of the diamond market to a resulting in a restless and undulating mosaic of and reds. We will also see the emergence of the valuedegree but those days are past behind us, and De Beers reflected colours in the face -up direction that investors stones come to the forefront, such as the orange andalongside Graff, Harry Winston and others, no longer are starting to recognize and appreciate.” green colours, which are also extremely rare and are starting to find their comfort zones. Larger cognacmonopolize the market and may have coffers filled with An additional common myth surrounding these sectors diamonds of good quality — as well as some of thediamonds to an extent but nowhere close to the is that diamonds are widely regarded as an extremely more esoteric segments of the market, such as grey,quantities people may expect? During previous illiquid asset. Should an investor be executing a correct black and even milky white diamonds — will start torecessionary and slower economic conditions, the (so - investment strategy with an Investment House capable gain a stronger foothold in the market as well.”called) stockpile was used as a result to continue of illustrating compliant exit procedures with the Chameleon diamonds are another segment of thefuelling the ever increasing demand and over the assistance of direct and indirect secondary market market that offers true rarity as they are a beautifuldecades has taken its toll. It is true the likes of De factors, the investor should be in a primary position to shade of green and are the only diamonds that changeBeers, Graff, Harry Winston and others may have alleviate these so-called myths from one’s mind. colour, truly magnificent stones.”access to a limited resource of quantity but the factthese institutes are clearly spreading their business But what does 2012 hold in store? Since the Lehman Brothers Investment House collapsearms to different diamond ventures illustrates their and the domino effect which ensued as of Septemberrequirements to achieve a broader client awareness in Stephen Hershoff begins by confidently suggesting 2008, Natural Fancy Coloured Diamonds illustrated a “That with continued volatility in global financial compounded growth of 58 per cent to September 2011,order to both increase publicity of the market as well markets, higher taxes and concerns about the equating to the region of 19 -20 per cent growth peras increase revenues. Sovereign debt situation, we have seen an increase in annum. This is widely expected to continue in to 2012“There are new stones coming to the market at all the number of investors looking to acquire rare and the coming years. When taken in to comparisontimes, much less than we saw ten or twenty years ago. coloured diamonds to balance and diversify their against the continued traditional market volatility andThis is the new reality, as the number of rough portfolios. Coloured diamonds are the most private, uncertainty, lack of diminishing belief and faith in thecoloured diamonds (supply) is in sharp decline across portable form of wealth in the world and have been a banking and financial institutions alongside a continuedthe board, yet the appetite (demand) for rare colours is very good long term holding for owners of these stones desire of diversification, investors will do well tosurely increasing with every passing month, especially over the last 35 years.” benefit from a Natural Fancy Coloured Diamondnow that people have a renewed interest in finding investment as they continue to seek out areas ofsafer alternatives for their currency.” With the increased luxury market growth in the growth which protect and preserve their wealth. emerging nations, this is undoubtedly true. The wealthStephen Hofer goes on to add “I am confident that and want within certain nations at present is “As there are so few coloured diamonds to meet thedemand will continue, supply will wane, and there will undeniably ‘pushing’ the diamond investing market entire global demand, this will have a profound effectbe occasional stones in the market that defy forward in leaps and bounds, as is this new found on the market. Major dealers are already reporting appetite.
  7. 7. that their inventory has halved in the last year, as new buyers come into the market Diamond demand is expected to increase by about 6 per cent per year through toand stones get harder and harder to replace” said Stephen Hershoff. He goes on to 2014, providing strong support for prices, Asian demand especially that from Indiaadd “These buyers are looking to buy into the next big trends in the market going and China, is largely expected to be an increasingly positive and importantforward, so we expect to see many promising developments in the coming years component of that growth in the upcoming years, including 2012. An upward trendand are very excited about the prospects of the market.” which is already in motion, coupled with the growing diamond demand, especially given the increasing appetite from Asia, is expected to outstrip supply in the future. But, demand for investment grade natural fancy coloured and rare diamonds is already visibly outstripping supply. According to Saul Singer of Fusion Alternatives, “This has been the case for the past five years. These conditions are expected to continue in the medium term,” he added “As there has not been any world class diamond mine discovery in the last decade to shift the supply curve, a primary factor that adds to the optimism surrounding coloured diamonds’ performance.” 2012 will without a doubt prove questionable in many aspects, however this is one arena which will deliver a sound degree of certainty and stability to proceedings, an area which seems to be ticking all the correct strategical boxes and one which set to lose its undisputed ‘below the radar’ achievements throughout 2012: Rare natural fancy coloured diamonds — where investors will flourish whilst achieving: Actual Capital Growth: Natural fancy coloured diamonds have a solid history of steady price appreciation and they are expected to continue increasing in value over time. Over the past decades the price of coloured diamonds has remained strong; in fact the price of investment grade coloured diamonds has steadily increased by approximately 15 -20 per cent per year even during the recent financial turmoil, with some significant diamonds illustrating certain characteristics showing in excess of 45 per cent. Wealth Preservation: The rarity of fancy coloured diamonds has taught investors that they are recession proof. Over the decades and especially during times of economic uncertainty, investors have learned that fancy coloured diamonds provide a reliable store of wealth. Past performance shows that in both national and global Fancy Coloured Prices: 1 Carat Radiant Shape, Internally Flawless (IF) Clarity Grade Natural Diamonds *Present and Existing Values recessions over the past decades investment grade diamonds have sustained their based upon collection of data from Auction Results and Private Sales *Future Values are determined upon Past Performance and key market fundamentals at the specific time Source: Rapaport Group, JCK, Christie’s, Sotheby’s, RCD, HSFA, Berenberg Private Capital, value and have continued to upsurge. Geminii Limited Non-Correlation: The unique and rare nature of fancy coloured diamonds meansWhen Table #2 is taken in to consideration with the semi -finite going on to finite their value is unconnected to and unaffected, by the trials and tribulations put uponsupply and the increased demand as a result of the new found wealth, investors are other forms of investment, including the stock and share markets as a prime resulthighly regarded to wish to balance and protect their portfolios. As there is so few of the lack of association with many external factors which would typically affectcoloured diamond supply to meet the ever increasing demand, this is likely to result alternative options.in a positive reflective effect on diamond prices and in turn investment profitability.
  8. 8. Tangibility: Because of the uniqueness of diamonds, they are the most portable direct physical asset ownership and control in its purest essence, and the marketform of wealth in the world today. Unlike other tangible assets, such as gold for expectations will undeniably result in a positive effect and outcome given theinstance, diamonds can easily be taken anywhere in the world and liquidated. current factors backing an investor.”Anti-Inflationary Hedge: When there are so many other forms of comparatively Martin Rapaport finishes his group’s ‘2011 Diamond Price Statistics Annual Report’high risk investment opportunities to provide capital growth, investing in diamonds by stating that diamonds can be more than an investment play. He adds “There is anprovides a relatively low risk hedge against any losses in comparison, which may be artistic or luxury aspect to investing in a diamond. Many people have a relationshipincurred by investing in other alternative assets or financial products over the with diamonds, so owning diamond jewellery is going to make your wife happy andmedium to long term. illustrate a status symbol. Most importantly however, it will make you returns.”Discretion and Portability: By contrast to their diminutive size, weight and easeof transportation, diamonds have an extremely high value which in times of need Geminii are pleased to introduce the exclusive ‘Geminii 4 -C’s’ at this stage inprovide an efficient, effective and personal way of moving wealth from one place to respect of rare natural fancy colour diamond investing:another. Diamonds are the most portable form of wealth in the world at present. ◊ Commitment: As a vital element of the company’s operating philosophy andExotic and Rare Ownership Qualities: With a mere one carat discoverable commitment to an investor, the quality of all Geminii investments stimulate awithin every 10,000 carats mined globally, and distinct colours even further apart, degree of integrity and satisfaction which ultimately result in lasting ventures andrarity of ownership of this asset class is clearly visible and apparent. However value for our investing peers to benefit from.without question, fancy coloured diamonds are truly exotic; people derive muchpersonal pleasure and satisfaction from simply owning something so unique, ◊ Credibility: Credibility is paramount, and we endorse and encourage investors toassociating a certain degree of status levels. learn more about the markets and the company. All strategic operations withinInheritance Planning Assistance: As an heirloom, fancy coloured diamonds can Geminii are overseen by an international executive consultant with proficienteasily be passed from one generation to the next, and thus are able to provide experience within diamond trading, diamond valuations and diamond sourcing. Ourunnoticeable transfer of wealth without the added restrictions or implications consultants are highly accomplished and display skilled expertise within a variety ofimposed on other assets within this category. the correct category of investment activity.Martin Rapaport recently noted in the Rapaport Group’s ‘2011 Diamond PriceStatistics Annual Report’ that diamond investing had outpaced the Yen and Euro ◊ Competence: Geminii are proud of their unrivalled expertise in the brokeringcurrencies, and the Nasdaq and Dow Jones indices over the course of the last and servicing of the rare natural fancy coloured diamond opportunities. Throughdecade. He went on further to add “For every 1,000 USD spent on a diamond 10 our sincere reputation we have and will continue to work with the leading industryyears, an investor would have seen a minimum return of 1,645 USD in 2011”. figures and thus provide any and all investors with direct access to the world with the greatest potential for appreciation.Sharanjit Singh Rao finally concludes that “The 2012 outlook for investment gradeddiamonds and rare natural fancy coloured diamonds in particular is exceptionally ◊ Confidence: We express a long standing level of ethical confidence within thepositive. When this asset class is viewed singularly, and it is reasonable to expect diamond investing markets and communities and as a result have direct buoyancy inpositive performance from the diamond market, though selection continues to play the rare coloured diamond investing market, our prime abilities, and our evera major role in success. A simplified tried and trusted strategy should be passionate ethics and levels of integrity. As an investor, you can be sure to feel theimplemented with an institute who can deliver.” He goes on to add “It is important same degree of confidence having discussed your investment requirements with ato note that this form of investment activity can fit extremely well when viewed Geminii consultant.from a medium to long-term viewpoint, however you are always in control as this is
  9. 9. Biography: Pastor-Genève & Pastor-Genève provides a worldwide client base with access to including the global background of Managing Director, Stephen Stephen Hershoff coloured diamonds, whilst continually tracking the market to Hershoff. keep up to date on activity at the auction, dealer and retail Stephen Hershoff has over forty years of experience in the level, as well as major trade shows and mines around the world. diamond business, beginning in London in the 1960’s; where he In addition to the pleasures of collecting, our high -end clients’ was a dealer in diamonds and other coloured gems. Throughout goals include wealth preservation, diversification, privacy, the late 1960’s and 1970’s, he concentrated on advising a portability of wealth, offshore discretion and a long -term private client base of international collectors and connoisseurs growth strategy of a well-balanced portfolio invested in diverse through his own consulting company and in the early 1980’s, he asset classes. moved to North America to assume responsibility for a company that became one of the four most important gem dealers The expertise includes extensive market research, scientific recommended by the Dow Jones-Irwin Guide to fine gems and expertise through a continued relationship with Stephen Hofer, jewellery. and over 30 years of experience within our international staff,Stephen Hofer began his career in the Earth Sciences as a invited by Christie’s to measure the colour of the famousGeophysicist at the University of Connecticut in 1976. He went ‘Hancock Red’ prior to sale in 1987 and in 1988 invited to theon to study Gemology at the Gemological Institute of America Smithsonian Institute to measure the colour of the equally(GIA) in 1979 and in 1980 accepted a position with the GIA famous unmounted ‘Hope Diamond’. Stephen HoferResearch Department, where he specialised in the study of In 1989, Stephen began to document the 260 Aurora Collection,coloured diamonds and the interactions of light and gem and following a labour of love expanding eight years of researchmaterials using various scientific instruments. and writing, culminated ‘Collecting and Classifying ColouredIn 1982, Stephen Hofer completed the requirements to become Diamonds’. In 1997 following the release of his book, Stephena Fellow of the Gemological Association of Great Britain, Hofer was invited by Harry Winston Inc. to measure the colourgraduating with a distinction, where he was also selected as one of the famous ‘Pumpkin Orange’ and the ‘Agra Pink’ in 1998,of sixty featured speakers at the inaugural International documenting its colour and eventual re-cutting. Stephen hasGemological Symposium, where he conducted a lecture of Fancy continued to publish numerous technical paper in scientificColour Diamonds. In 1985 he went on to publish the first journals and is often quoted in industry articles about colouredscientific papers detailing the characteristics of the Argyle Pink diamonds, alongside a variety of auction catalogues. He isDiamonds from the Argyle Mine in Australia; and in 1986 widely regarded by many as the industry expert on colouredbecame President of the Coloured Diamond Laboratory Service, diamonds, and continues to examine rare fancy coloureda grading laboratory servicing the diamond trade, specialising in diamonds for various clients, and works closely with diamondfancy coloured diamonds. As a direct result of Stephen’s cutters and collectors from around the world.recognised contributions and efforts to the industry, he was
  10. 10. Kemp House | 152-160 City Road | London | EC1V 2NX Telephone: +44 (0) 20 3195 3888 | Website: www.geminii.co.uk | Email: mail@geminii.co.uk STAY CONNECTED …..This Aide has been prepared and complied as a supplement to the Geminii Limited ‘Investment Grade Diamond Market’ Brief. All of the material and contents listed within this has been gained from reputable sources and with the sought permission to publish. Any dissemination, duplication, copying, and/or distribution withoutthe prior written consent of Geminii is strictly prohibited under Copyright Law. DISCLAIMER: Geminii Limited does not offer or operate any form of collective investment scheme, nor can the Company or any employees or representatives offer any form of investment advice whatsoever in these areas. The Company is notregulated by the Financial Services Authority and the purchasing of Global Alternative Asset Investments is a self-regulated activity and should only be considered by those who are comfortable making their own investment decisions. Investors should seek to rely solely upon their own research and due diligence whenpurchasing Global Alternative Asset Investments. Past performance is not a guide to the future and as with any investment, the value may go down as well as up and you may not get back the original amount invested. Any opinions regarding future returns and opinions expressed are based upon the a strategically formulatedforecast and should not be relied upon as indicating any guarantee of return for any investment. Except where otherwise stated, the source of all information is the Company. Geminii Limited is Registered in England & Wales: 07749775 and VAT Registered: 122093256. This documentation and contents is the property and forthe sole purpose of Geminii Limited © 2012.

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