In The Magazine

Financing the Stone

by Wendy Sy Photographed by Jessica Nash
Thursday, June 22, 2017

Those familiar with the story of Arcot Finance have likely heard about it via word of mouth. The investment firm, which specializes in buying and selling rare gemstones was launched just seven months ago by seasoned diamond expert Henri Barguirdjian and Harbinger Capital hedge fund magnate Philip Falcone.

Most recently, Barguirdjian served as the president and CEO of Graff North America for 16 years before retiring from his post. The idea for the new venture started as an innocent conversation between the longtime friends. “We talked about two factors that are happening in the world of gems at the moment,” says Barguirdjian, a European turned New Yorker who comes from a fifth-generation family of jewelers.

“Number one is that there is a strong interest in rare stones, such as colored diamonds and really fine sapphires. Those continue to go up in value, as their demand is far superior to the supply.” Affluent clients have realized the significance of putting a small percent of their wealth in stones. Many are even purchasing pieces for their children and grandchildren to set aside for security.

“Number two,” he continues, “is that there is a tremendous shortage of cash for dealers and jewelers worldwide. Many financial institutions have pulled away, mainly because of all the anti-money laundering regulations and so forth.” The result? An increased need for money to buy stones. Arcot fills this void in the market.

There’s no such thing as a typical day for Barguirdjian. When he’s not traveling or out at a meeting, there’s a good chance he has clients at the office, located  on the 30th floor of 450 Park Avenue. Recently, he went to Jaipur and Mumbai in India with his son, Matthew. “We bought a few beautiful, unusual pieces,” Barguirdjian says, while dialing a combination to open his safe. Revealing one of their finds, he says, “This is probably the finest yellow sapphire in the world.”

Barguirdjian’s key rule for gem investment is to focus on quality versus size, which will allow for a higher retention of value in the long run. After obtaining a stone, they will either have it mounted or keep it as is, then resell to other clients, jewelers and auction houses.

Of course, there’s also sentimenal value. “Usually, people buy stones to celebrate a happy moment, whether it is an engagement, anniversary or birthday,” says Barguirdjian. It’s wearable art that can be enjoyed for many years, and with a wise purchase, you can earn quite a pretty penny upon reselling.

As for the future of Arcot? Says Barguirdjian, “The sky’s the limit.” 


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