Michael H. Steinhardt believes there is money in antiquities. The legendary hedge-fund-manager-turned-full-time-philanthropist has quietly managed to assemble one of the largest and most important antiquities collections in the world. Now, he believes, its time has come.

"Ancient art has not appreciated much in value for a long time," says Steinhardt. "It has been under a certain cloud because there are issues of provenance, which have made headlines in the last five- to 10-years and continue to make headlines."
In Pictures: Ancient History For Collectors

To be sure, shady characters and illegally obtained objects are lurking, but the antiquities market is not dominated by crooks. In fact, it is possible to build a world-class collection of legal, museum-quality pieces for a fraction of what it might cost to build a collection of similar quality in another field, such as Impressionist or contemporary art.

Still, the collection of antiquities (ancient objects from western civilizations including Italy, Greece, Turkey, Mesopotamia and Egypt) has been around nearly as long as the items themselves. Julius Caesar and Pompeii were avid collectors. Thomas Jefferson collected ancient Roman coins. Financial titans from J. Paul Getty to J.P. Morgan to William Randolph Hearst amassed large antiquities collections. Today, Steinhardt is counted among the most serious of collectors, along with Shelby White who built an impressive collection with her husband, the late financier, Leon Levy.

Antiquities are considered to be relatively undervalued and only recently have prices begun to climb, much like the newfound popularity of Old Masters a decade ago. In 2000, Sotheby's (nyse: BID - news - people ) sold at auction a marble torso of Eros, the Greek god of love, that had been deaccessioned by the Santa Barbara Museum of Art. The low estimate for the 20" tall statue, which dates back to the Roman Imperial period (second half of the 2nd century), was $60,000 to $90,000. It sold to a dealer for a hammer price of $240,000. Four years later, the dealer sold it to a collector in Monte Carlo for $729,000. The current owner was recently offered $1.15 million for the statue.

Experts believe prices will continue to escalate, with fewer museum-quality objects remaining in private hands. The supply of high-quality pieces is dwindling because many objects have been taken out of circulation--either they have been donated to museums or are no longer allowed to leave their country of origin.

"Thanks to this positive recent clarification of the market, everyone is searching for the well-provenanced, works," says Hicham Aboutaam, antiquities expert and co-founder of Phoenix Ancient Art, a leading dealer with galleries in New York and Geneva. "This has obviously affected the prices for objects in this category, and they will continue to appreciate daily."

Certainly there's no shortage of mystery, intrigue or tales of the looting of excavation sites and illegal trafficking which has made antiquities arguably one of the most controversial areas of collecting.

In February, under pressure from the Italian government, the Met agreed to transfer title to Italy for some of its most prized antiquities including a group of 16 Hellenistic silver pieces and a 2,500-year-old vase. Since 1972, the vase, known as the Euphronios Krater, has been a showpiece of the Greek and Roman collections at the museum.

Collectors can avoid legal trouble by investigating an object’s provenance--the history of its ownership. "The due diligence before making a purchase can be exhaustive," says William Pearlstein, a New York-based attorney who specializes in the fine arts and antiquities trade.

"Collectors have to be very well advised," says Judith L. Pearson of the ARIS Title Insurance of New York, which underwrites title insurance for fine art. "Even then, you still might not know positively how it was acquired, whether it was legally imported or if it was stolen from an excavation site. And the provenance might have been faked, too. There are dozens of things that can go wrong."

The best documentation of provenance includes published articles, books and auction catalogs describing the object. Sales records and affidavits from previous owners are also helpful. An object should have documentation showing where it originated.

"Even then, it can still be very difficult to show provenance," says Pearlstein, a partner at the New York law firm, Golenbach Eiseman. Pearlstein recommends collectors buy from reputable dealers who are knowledgeable in both American and foreign legal environments.

Antiquities originating from certain countries routinely set off alarm bells when entering the U.S., including pre-Columbian artifacts, ancient Egyptian objects and items from Italy's pre-classical, classical and Imperial Roman periods.

It is important to determine when an object left a particular country of origin and if there was a national ownership law at the time. Italy, for example, enacted a cultural patrimony law in 1939 that declared all archeological artifacts to be government property unless the items were in private hands before 1902. The United States signed a bilateral agreement with Italy in 2001.

Likewise, if the object originated in Egypt, it would need documentation proving it left the country before 1983 when Egypt enacted its patrimony law. This law declares all antiquities discovered after 1983 to be government property though the U.S. does not have a bilateral agreement with Egypt.

"Inquire before you buy and check with customs before the object enters the country," says Lawrence W. Mushinske, the national imports specialist for the U.S. Customs Department. Potential buyers can protect themselves by writing to the Customs Department with a request for a written ruling which "binds" the Customs and Border Protection.

The written ruling will address the proper Harmonized Tariff Schedule number (goods that enter the United States must be categorized according to the HTS, which determines how much duty will be collected), as well as duties that will be owed and, most importantly, admissible, says Mushinske. As with the purchase of any work of art, it is always a good idea to check the Art Loss Registry to make sure the item is not stolen property.

An object with a documented provenance that dates back decades tends to be free and clear of headaches. Although rare, some provenances date back centuries. Aboutaam's Phoenix Ancient Art has two museum-quality ceramic vases (circa 520-500 B.C.) as part of "The Painter's Eye,” an exhibition of Greek vases at its New York City gallery. Both have a documented provenance that dates back to the year they were excavated in 1829.

The 45 cm. tall ceramic vases, each decorated with a scene depicting Dionysus, the god of wine and a lively entourage of satyrs and maenads, were discovered during an excavation in Vulci, Italy by Lucien Bonaparte, Prince of Canino (a younger brother of Napoleon Bonaparte, Emperor of France). Painted by the Leagros workshop (a group of vase painters who worked in the black-figure technique) the vases are offered for sale for $250,000 each.

Steinhardt says the inherent risk in antiquities collecting doesn't intimidate him. "It is a little bit dangerous, but that is what makes it exciting," he says. "But life is filled with risks, isn't it?"