Investing in Luxury

Increased urbanization and population growth have lead to fast economic growth and one of the consequences of this is an increase in personal wealth. The middle class has increased significantly and it is likely to continue to grow.

More individuals have disposable income and this, in turn, leads to an increased aspiration for improving lifestyles. These aspirations include lifestyle elements that are not just needed but wanted such fast cars, fancy homes, and beautiful clothes.

A unique definition of luxury

Investing in the luxury sector, is not only about exclusive, expensive items like expensive sports cars, yachts or private jets. To some people, luxury may be a small purchase that improves the quality of life.

Many individuals may regard a holiday, a smartphone, or even a great cup of coffee as a luxury.  Seeing luxury investing in this way takes it beyond the obvious definition of luxury. We all aspire to the nicer things in life in one way or another.

Our strengths as a company

One of the challenges of investing in luxury is to be able to define luxury. The perception of what is considered as luxury, changes constantly and so identifying consumer spending patterns becomes important.

The stocks most likely to be affected by massive increases in consumer spending need to be identified.  We believe that this is one of our strengths as a company. We are also committed to the idea that everyone’s definition of luxury may be different. The less obvious forms of luxury that don’t fall into the exclusive, expensive category often create great investment opportunities.

The Luxury Fund

Our company takes traditional metrics into account when managing Luxury Fund but it also takes other less scientific metrics into account. Fashion trends, social media trends, and brand strength are also assessed as well as the appeal of products to customers of today and tomorrow. Opinions and tastes matter in the luxury sector,  making investing and managing such a fund quite fascinating.

Companies in the luxury section

Many of the companies that operate in the luxury sector are high margin businesses that generate cash. These companies are mostly based in the west and are well regulated, transparent and cannot easily be displaced or imitated.

Did you know?

The middle class is expected to grow to three billion by 2030. Globally, they are already spending approximately $35 trillion a year and this could increase by $29 trillion by 2030. 

Deloitte has identified the Chinese as the top spenders in the world when it comes to quality, with 93% buying luxury products of premium quality and 90% preferring to buy handmade products.