King of Diamonds

“I myself am happy to pay higher and higher prices for rare stones, and so are my clients.†—Laurence Graff

SITTING IN HIS CORNER office overlooking New York City’s West 47th St., Laurence Graff is the picture of Continental chic. Dressed in the finest bespoke suit, he speaks softly, highlighting words with a twinkle in his eye that seems perfectly coordinated with the newly certified diamonds laid out on the table before him.

“Every time I open one of these—and, you see, I open them in a very special way—and I look at what’s inside, I get excited,†he says, his neatly groomed fingers swiftly unfolding a piece of paper to reveal a yellow cushion-cut diamond worth more than $1 million. “Even after all these years, it excites me because I never know what’s going to be inside,†he says. “What I see at first sight is what I react to. First impression is the best impression.â€

Graff, 65, one of the greatest diamond dealers in the world, started in the business at 14, peddling Victorian rings for a few dollars in London’s East End. It didn’t take long for him to realize that dealing, not creating, was his forte. So he started buying diamonds and slowly, over several years, they got bigger and bigger.

Today he is one of a privileged group of merchants known as sightholders—or wholesale customers—who buy directly from DeBeers’ mines in South Africa. It’s a status that gives Graff access to some of the most exceptional stones around, 60% of which he keeps for his company, cutting them in his factories in Johannesburg—where he employs more than 300 craftsmen—and then selling them in a network of 15 Graff stores around the world. As such, he is the foremost producer of polished stones in South Africa.

In the close-knit diamond community, Graff is also known for his ability to spot unique stones and snap them up, seemingly without a moment’s hesitation: “I know the minute I see a stone whether I want it or not.†It’s an assurance he says he has honed over the 40-odd years he has been dealing with diamonds, buying and selling some of the most expensive and famous stones in the world, including the 100.57-carat Star of America, an octagonal certified D-flawless; La Favorite, a historic 50.15-carat D-color, and the Idol’s Eye, a 70.20-carat Golconda diamond with an extremely rare blue tint.

“It’s an inside feeling of knowing an industry so well—knowing it inside out—and knowing the stones so well, knowing how rare they are and how very beautiful they are,†he says. “And knowing that people want to buy those things and that they will come to me for them. All of that’s within me, and it gives me the confidence. I have no hesitation at acquiring any kind of gem, as long as it’s fine and quality. It’s inside me, this confidence.â€

Indeed, he is known for diamond dealing on the highest level, jumping on his private jet to sell stones to heads of state and, once, jetting off to his yacht in the Mediterranean with $150 million worth of stones in his pocket to rendezvous with a U.S. businessman on a less traveled stretch of sea between Italy and France. Of course, he sold all three of the famous stones he was carrying that day.

“I learned very early on that if you give your customers the best, then you will have the best customers,†says Graff. “I myself am happy to pay higher and higher prices for rare stones, and so are my clients.â€

Although the value of diamonds dipped in the early 1980s owing to what Graff calls an influx of “bad buyersâ€â€”pension and investment funds that were buying diamonds as a commodity or an investment as opposed to buying them the way he does, as unique treasures to be coveted. “They just stockpiled them away,†says Graff. “They had no interest in them as stones to be treasured and loved and worn.â€

Eventually, in the 1990s, those diamonds that were “stockpiled†came back on the market at a just price. Today Graff estimates that the values of fancy and rare diamonds have gone up as much as 60% in just the last year. “The world is a wealthy place. It’s lateral wealth too,†he says. “There’s wealth everywhere.â€

One of Graff’s favorite stones is the Graff blue, an extremely rare, 3-carat round blue diamond that he has bought and sold three times over the past 25 years. The first time he saw it was at auction, where it sold to someone else for $180,000. Years later he spotted it on the hand of a client but couldn’t buy it until after the client died, and his widow offered it to Graff for a much higher price. He eventually sold it to a Japanese client who offered $1.5 million. Fifteen years later, the same client wanted to sell the blue diamond for $2 million, and Graff bought it back, repolished it and decided to keep it. But he couldn’t resist an offer for $3 million. “I’m a trader,†he says with a shrug. “But my dream is to buy it back someday.â€