The ultra-rich are piling into Rolexes, rubies and Klimts as inflation hedges—but the real return may be about more than money

BNY Wealth recently surveyed investment decision-makers at 290 single-family offices—the private firms that manage the fortunes of families with at least $250 million in investable assets. Nearly half of respondents oversee more than $1 billion.

Notably, nearly two-thirds of the family offices surveyed held assets uncorrelated to their broader investment programs, almost double last year’s share. More offices reported investments in luxury assets, from watches, fine jewelry, art and spirits to sports teams and music rights.

The report suggests the growing popularity of luxury assets may reflect their potential as inflation hedges. Inflation, along with potential central bank missteps, ranked as the top risk family offices see over the next five years.

“Certain luxury assets, such as sports and media rights, that we are increasingly seeing in UHNW [ultra-high-net-worth] portfolios can offer protection against inflation through pricing flexibility and recurring cash flows,” said Chuck Long, head of international markets and family office at BNY Wealth.

But the categories that grew most year over year weren’t those that throw off cash. They were tangibles like watches and fine jewelry, art and spirits.

In that sense, buying a Patek Philippe may not be so different from buying gold: Both are tangible stores of value meant to hold up against market volatility, geopolitical tension and rising inflation.

Recent performance data is mixed but points to overall stability. The Knight Frank Luxury Investment Index, which tracks 10 categories of collectibles, slipped just 0.4%........

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