'We launched the fund in difficult market conditions, confident that our experience and expertise would enable us to identify and purchase rare coloured diamonds that would grow in value for our investors, and the increase to our net asset value has proved this to be true,' says Codiam managing director Philip Baldwin, who co-founded the business with Mahyar Makhzani.

Baldwin and Makhzani, who together have more than 50 years' experience in the diamond and jewellery industry having worked with Bulgari, Tiffany and Habsburg, say they wanted to offer investors the opportunity to invest in a relatively closed and otherwise illiquid market.

'This is just the beginning of the adventure,' says Makhzani, also a managing director. 'We decided to market this opportunity to, initially, sophisticated investors now and moving forward we know that we have a viable instrument for institutions to invest in, imagine a positive return in a near total negative world.

'The investment in this category rather than white diamonds has been proven correct as we are not dealing nor speculating but intelligently investing in a very rare commodity. Our vision and mission will continue on that path.'

The fund does not handle rough stones due to the risks involved in the process of cutting and polishing a diamond, instead they only purchase finished stones.

Coloured diamonds have not decreased in price on a wholesale level in 35 years, consistently outperforming other diamond categories, with their value increasing on average between ten and 15 per cent in a year.

Coloured diamonds have held their value and not suffered from the current economical crisis as other traditional assets have.

Codiam Fund, which is domiciled in the Netherlands Antilles and has offices in London, was established in August 2008 by Baldwin and Makhzani as a specialist alternative, scarce commodity fund investing in the acquisition of rare coloured diamonds.