A group of private investors led by gemmologist and grader Lee Satariano, the Gaba Diamonds director, has established a venture to acquire finest quality coloured diamonds to amass a collection of some of the most desirable gems on the international market.
The Coloured Diamond Investment House Ltd, as the venture has been registered, will seek to secure coloured diamonds larger than 0.5 carats in the top colours pink-purple and yellow, Mr Satariano told The Sunday Times.
“Coloured diamonds are a natural resource and are very rare,” Mr Satariano explained. “Consider that in any given year, 88 million carats of rough diamonds mined worldwide will result in the production of less than 15,000 total carat weight of coloured diamonds of all colours.
“Coloured diamonds of over one carat are incredibly rare: perhaps one in 10,000 carats for certain colours and one in 500,000 for others.”
A year ago, Mr Satariano, spurred by his long-standing passion for coloured diamonds, brought together a select group of potential investors for the project. After intensive market research while following recent trends in coloured diamonds’ net asset value appreciation, the investors, guided by Mr Satariano’s expertise, compiled a “realistic” wish-list of stones of specific colours, cuts and sizes.
The venture’s ambitious but painstaking purchasing initiative will start in the next few weeks and is expected to span over four years. Stones closely matching the investors’ specifications will be acquired from world-recognised sight holders through the Diamond Trading Corporation.
The inventory is to be independently valued every year to monitor its appreciation against forecasts.
Mr Satariano said some of the stones will be put on display at Gaba Diamonds’ Iklin premises, not only as a way to “share” them, but also as a means to educate clients and potential clients in their characteristics and rarity.
None from the collection will be available for sale. However, Gaba Diamonds, one of Malta’s foremost investment jewellery specialists and a pioneer of the local sector, will be able to source coloured diamonds through its network should clients express an interest in acquiring stones.
“This is not a short-term investment,” Mr Satariano said of Coloured Diamond Investment House’s planned activities. “It is an old-fashioned form of investment in tangible assets. It was once said that ‘exceptionally fine coloured diamonds have no fixed price... with fine paintings, set rules do not hold’.
“We will determine the right time to grow different aspects of this venture. In the first years, we will evaluate the accuracy of our forecasts. We are keeping our options open.”
Mr Satariano became enamoured with coloured diamonds while studying in Antwerp in 1994. As part of his studies he engaged in sorting and grading diamonds and came to handle coloured diamonds for the first time.
“The inspection of white diamonds requires total focus, particularly to identify impurities,” he pointed out. “With coloured diamonds, it is different. You fall for the stone immediately because of the high intensity colour. In 1995, one of my colleagues was a manager at Christie’s. While I was undergoing valuation training there, a rare collection belonging to an Asian royal family came up for auction and I was roped into the valuation.
“There was a 550-carat stone in that collection. I was totally engrossed by it. Ever since those experiences I have constantly examined the potential business opportunities of coloured diamonds.”
Back in Malta in 1998, Gaba Diamonds, on Mr Satariano’s insistence, acquired some small coloured diamonds to include in a collection of jewellery. The pieces were very well received by Gaba’s clientele.
Encouraged, Mr Satariano continued to follow important stones’ performance on the international market, particularly diamonds larger than one carat: pinks, yellows, and blues with the highest intensity colours.
Gaba Diamonds, which moved into its new premises in Iklin last November, has continued to expand on its offering, both in terms of jewellery, diamonds and precious stones and premier giftware, and in ancillary services like servicing and valuation.
The coloured diamond investment venture falls under the continuous widening of Gaba’s business and has the potential to develop into an alternative investment option for select clients, Mr Satariano said.