Friday, December 24, 2010
What billionaires splurged on in 2010
What's more extravagant than spending $330,000 on two white truffles, the pricey fungi popular with foodies around the world? Spending $330,000 on the mushrooms and then not even eating them. Billionaire Stanley Ho, the casino king of Macau, did just that at a London auction last month. According to a truffle expert, the large, aged Italian specimens Ho bought--"grand champions," in industry parlance--were not the sort you'd want to sprinkle on your risotto. "They're mostly or entirely unusable for culinary concerns," says Britt Bunyard, publisher of Fungi magazine. "They're over-mature, split open, and often have bad or decomposed parts. The truffle connoisseur would pass them over for younger, fresher ones."
This wasn't Ho's first time spending six figures on inedible mushrooms. November's $330,000 purchase matches the Hong Kong-based developer's own 2007 record for the delicacy, and he's well-known to Bunyard and other truffle specialists as the man to beat at auctions worldwide. The high prices Ho routinely pays for truffles are inflated, as proceeds from these auctions generally benefit charities, but Bunyard is still not sure why the ultrarich flock to buy what he calls "a strong-smelling, black, dirty potato" over any other luxury item on the market.
"It has me scratching my head," he says. "When anything gets to be rare and really expensive, the rich have to have it."
[See Toys of the Ultra Rich: What They Cost]
Some of the other extravagant purchases made by members of Forbes' World Billionaires list this year are decidedly more appealing than Ho's decomposing truffles, but no less frivolous. Hong Kong real estate magnate Joseph Lau paid $16.7 million for two antique incense burners at Christie's earlier this month. They're shaped like cranes, the long-legged birds symbolizing longevity in China.
The London jeweler Laurence Graff paid a world-record sum for a gem, spending $46 million at a Geneva auction in November for a rare 24.78-carat pink diamond that was last on the market 60 years ago. The chairman of Sotheby's (NYSE: BID - News) international jewelry department, David Bennett, believes the emerald-cut stone is worth its enormous price tag. "Truly extraordinary objects will bring truly extraordinary prices," he said in a statement after the sale.
American hedge fund billionaire Steven Cohen bypassed the auction circuit to snap up the year's priciest piece of art via a private sale. He is understood to have spent $110 million on Jasper Johns' famous "Flag" painting, setting a record for most expensive work by a living artist. Last month Cohen won the star lot at Sotheby's contemporary sale: Andy Warhol's iconic 1962 painting of a Coca-Cola (NYSE: KO - News) bottle. He spent $35.4 million, way above the $20 to $25 million estimate.
The world's wealthiest didn't break any real estate records this year, but they've certainly contributed to a rebound in the ultra-high-end market. "I've seen a 125% increase in property selling for over $20 million in 2010 vs. 2009," says Beverley Hills realtor Joyce Rey, who deals exclusively in luxury mansions. "It's a thin market, but that growth is considerable." Texas pipeline tycoon Kelcy Warren did his part to boost sales figures, spending $46.5 million in April on the 3,500-acre BootJack Ranch near Telluride, Colo. The estate can house 50 guests, and includes a 12,000-square-foot spa and aquatic center.