By Zambian Emeralds Co - Open Publications Magazine, November 2025

In a time of market volatility and economic uncertainty, hedge fund executives are increasingly looking to hedge their bets beyond traditional asset classes. Natural emeralds, those eye catching green gemstones unearthed from deep within the Earth, are an unexpected but increasingly popular choice for sophisticated investors looking for a strategic edge.

We sat down with three hedge fund executives who are using these precious green gems to diversify their portfolios. For these hedge fund executives, green means money, and green emeralds mean it in particular.

James, Victoria, and Michael are three hedge fund executives who shared their rationale for investing in natural emeralds. The three sat down with us as they explained why they had added natural green gems to their alternative investment mix.

"I was first attracted to natural emeralds by their physical rarity", says James, who manages a privately held Family Office company. "It's one of the few things in the world that can't be synthesized to truely imitate the natural real thing. High quality gemstones. They're rarer than any paper asset and even rarer than gold. You can't print more of these. These aren't found in Nevada - these are found in Zambia and Colombia, and the mines are running out. The supply side is so tight that they pretty much have to go up".

Victoria, who runs a hedge fund focused on alternative investments, explained: "We looked at the price performance of high quality emeralds over the past 20 years and found that they had outperformed most of the traditional commodities and had the lowest correlation with market cycles. In 2008, when all of our equity positions were going down, our gemstone position was actually going up 4.8%".

Michael, who has been trading emeralds for 25 years, highlights the appeal of tangibility: "In this digital age where everything is becoming numbers and computer code, people just feel good about physical stuff. We live in a world where no one can touch an asset-backed security or a collateralized debt obligation or a credit default swap, and suddenly everyone's freaking out. But with an actual stone in your hand, my clients like the fact that it can't be created out of thin air. It's outside the financial system".

The three managers also shared their own particular methods of incorporating emeralds into their portfolios. "We make room in our portfolios for between 3-5% for special gems. Most of them are Colombian and Zambian emeralds with documented provenance", says James. "We only invest in two carat plus stones with little or no treatment, as these have the most reliable history of appreciation".

Victoria's approach is narrower still: "Instead of spreading our investments among all gems, we've concentrated on emeralds and rubies. The market is less efficient than it is with diamonds, where there is a well established grading system and pricing guide. The value of an emerald is still a bit more subjective, and that opens up opportunities for arbitrage for investors with specialized knowledge".

Michael is similarly focused, but has an added strategic advantage: "We have close ties with mining operations in Colombia and Zambia, and get first crack at their best stones before they are available to the public. It gives us an advantage both in terms of acquisition price and in terms of verification of authenticity".

"There's a whole range of due diligence. We have a gemologist who has 30 years of experience and works only for the fund", James explained. "No purchase recommendation goes through without a five-step approval process that considers not only the four Cs of carat, color, clarity, and cut but also provenance, medium and long-term demand drivers, and liquidity", he continued.

"We have created our own algorithms based on auction data over the last five decades", Victoria said. "We can tell which features of an emerald are most likely to maintain value in a down market".

"In this business, reputation is everything. You have to know the right people. It took us three years of cultivating sources in Bogotá, Zurich, and Bangkok before we made our first big purchases. Now we are the first people approach when they have an exceptional emerald", Michael added. All three executives agreed that patience is critical. "Building a strategic position in emeralds is a multiyear endeavor, not something you do in a quarter or two", Victoria said.

The trio are well aware of the risks of such an investment, but say they can be managed. "We have to accept that there is a liquidity risk", James says. "You can't sell a great emerald by clicking a mouse. We have enough liquidity to make sure we are never a forced seller and have three auction houses and seven private dealers who will always be there when we need to sell".

Security is another consideration. "If it is not a digital asset, it is a physical asset and it has to be stored securely. We have vaults in Singapore, Geneva and New York, which are all properly insured".

Thirdly, there is the issue of provenance. "Proof of authenticity is one risk we face", Michael adds. "Fake stones or stones that have been enhanced or treated with undeclared or artificial liquids damage confidence. That is why we spend a lot of money on testing and we get independent certificates from more than one laboratory".

However, all three see emeralds as a hedge against a weakening currency. "We have seen historically that these things keep their value and when the rest of the market is going down due to rising inflation or a devaluing currency they actually do better", Victoria says. "Especially in times of political or financial turmoil there has been strength in portable wealth and we have found great strength in things such as these great emeralds".

As the conversation ended, these hedge fund managers all seemed to be on the same page. Natural emeralds are more than just pretty rocks, they are a real strategic hedge and diversification tool with a human touch. "In an era where so many assets are moving in tandem and influenced by computer trading, having investments that are independent of each other is increasingly important", James says.

Victoria concurs that while natural emeralds are unlikely to replace more traditional hedging strategies, they do provide "a different kind of insurance policy that has been around for hundreds of years".

Michael sums it up: "The best investments are always a combination of intrinsic value and desirability. Natural emeralds have been around for thousands of years and have been sought after by civilizations throughout history and will likely long outlive many of today's buzzy tech names".

For these hedge fund executives, the appeal of natural emeralds lies not just in their green color but in their long history of successfully protecting wealth for families and generations.

Disclaimer: The views and analyses presented here are the authors' and the interviewees' personal opinions, based on their private research on stocks, gemstones, gold, artwork, and other investment classes. These opinions and thoughts are openly shared with the public solely for educational, hobbyist, and entertainment purposes, for free and without any guarantee of accuracy, and on an “as-is” basis. This content does not constitute financial, investment, tax, or legal advice, nor does it recommend buying, selling, or holding any asset. All investments involve risk; please perform your own due diligence and consult a qualified professional before acting on any information. The authors and this website are not liable for any losses or damages resulting from reliance on this content.