The first UAE postage stamps were issued in January 1973, the set of 12 definitive values featured the late Shaikh Zayed Bin Sultan Al Nayhan, former President of the UAE.

A must-have memento for collectors of UAE heritage, and perhaps a must-have asset for the burgeoning breed of stamp collectors turning into 'philatelic investors'. "You can't be serious", I hear you say, well Stanley Gibbons are very serious, and in October 2005 are set to establish a Stamp Fund for investors willing to part with at least $37,000.

Stanley Gibbons are stamping their authority on the world of philately by setting up three investments. For investors glancing the 'eye of curiosity' on whether philately can be classed as a serious alternative investment, the Stamp Fund performance will provide the most interest. The fund's concept provides individual investors the opportunity to own part of a portfolio with ownership in a collection of rare stamps. No need to buy loads of those plastic bags of cheap stamps in the hope that someone has mistakenly left a "penny black" inside; no need for hours of sorting into the album. Stanley Gibbons themselves provide all the necessities of a good fund. They act on both the supply and demand side of the equation by collecting the rare stamps themselves, through to storage and providing liquidity from their auctions and collector base.

If funds are not your scene, the other two "investment products" are individual portfolios and fixed rate return contracts. The investment portfolios will interest those that are keen to feel "tangible" ownership. After all stamps are relatively easy to store, and provide an element of "show and tell" at dinner parties.

Whilst Stanley Gibbons will provide a discretionary service on what and when to buy and sell, the likelihood is that this would only appeal to the stamp collector turned investor. Like a stock-picking portfolio I would expect the investor to exhibit the following traits: firstly, some understanding of classification and authenticity; issues which could equate to the strength of the company, and the quality of the market on which the stock is traded. Secondly, auctions and market movements; issues that equate to understanding the liquidity of the asset; and finally storage. Stamps are not quite as easy as stocks and shares to store, as the condition of a stamp is very certainly going to affect its value. Stock ownership on the other hand is often protected by registers which means that you can spill the tea on them.

The fixed rate return contracts are an interesting "guaranteed" component to the product range. The appeal is likely to work only for sterling investors as the underlying assets appear to be sterling stamps. Nevertheless, the product concept is interesting. The corporate bumf indicates that "fixed rate contracts of 3 years at 5 per cent, 5 years at 6 per cent, and 10 years at 7 per cent" are available with the "option at the end of the contract to accept the fixed return or retain the stamps should the market have exceeded expectations". A return the company believes is "excellent for school fees and retirement planning".

Where do Stanley Gibbons get such confidence? A few years ago there was less enthusiasm for post-age as reflected in Stanley Gibbons attempt to float on the UK market as a stock. The stamp did not stick. The Guardian archives also carry an article written in 2002 which started by saying that Russians found stamps useful for hiding drugs (by mixing it with the glue!) other than that they were difficult to make money out of. The thrust of the article was quotes by Stamp Collectors, including Stanley Gibbons, that investment and stamp collecting should not be confused. How times change. The new-look Stanley Gibbons is now pushing the stamp thing with some confidence based on their ever growing collector base which they say approximates 10,000 people per year.

Now, in case you are thinking "what does this have to do with Shaikh Zayed?" consider the following: Stanley Gibbons say that most stamp collectors are in the 50 to 60 year age group; that age group is growing considerably and that age group is getting richer, and is being supported by the same age groups in developing countries that are also getting richer and who are also showing an interest in stamps. At an even faster rate of development is this also not true of the UAE? Those that agree will look for those 1973 stamps.

For me, the whole "substance" of implied growth is based on the demographic factor. However, for completeness, I should also add-in some of the other factors that Stanley Gibbons use as backing behind the inevitable success of stamps: firstly, they say that Merrill Lynch suggests that high net worth's should invest 10 per cent of their wealth in "alternative investments". Indeed, I would say that the Cap Gemini World Wealth Report suggests an increasingly higher figure, but that 10 to 30 per cent hedge/alternative space was not intended entirely for stamps! Secondly, Salomon Brothers studies of assets between 1907 and 1990 listed stamps as the fourth highest asset achieving a 10 per cent per annum return. I don't need to go into the "past performance" thing here do I? Thirdly, stamps are the third most popular sales category on the eBay website. Fourthly, for sterling thinkers, changes in UK Pension Rules will allow the inclusion of tangible assets such as stamps within personal pension funds.

A serious "alternative" asset or a marketing tool? Time will tell. It is for the moment further evidence that the "alternative" scene is diversifying at a stunning rate. In the meantime beware the content of your "alternative packaging".

The writer is managing director of Mondial (Dubai) LLC.