Guide: How to Successfully Invest in Art 2
Art Republik continues the second part of its guide on art investment
For readers who missed part one (in Art Republik issue 8), this series looks at art investing via art connoisseurship. When I refer to art investing, I refer to the second definition of investment found in the Oxford English dictionary, namely, “to devote one’s time, energy and money to an undertaking with the expectation of a worthwhile result”. To really invest in art, the worthwhile result is the pleasure and enjoyment of the art itself. If, by the end of your collecting life, you have a culturally valuable collection, you may also have a financially valuable collection.
It seems that many of the biggest art collectors have a deep understanding of this. Of the 2,000 affluent individuals that Barclays surveyed globally for report titled ‘Wealth Insights: Profit or Pleasure?’, only 10% said they bought fine art purely as an investment. The report concludes that most art collectors are buying for their own enjoyment or for cultural or social reasons.
For those readers new to art and collecting: where to begin? I believe that investing in art, with the mindset of a connoisseur, is open to all, with time and a financial investment of $50 to $50 million (USD, that is). Artists themselves often invest in art buying sketches and smaller works or bartering with their peers. One the most famous collecting couples of recent history are Herbert and Dorothy Vogel whose collecting budget was modest, using his earnings as a postal clerk, yet during their lifetimes they created a collection coveted by major museums and worth many millions. They bought conceptual work when it was unfashionable over a period of years, by cutting edge young artists, which captured their evolving careers. They collected the zeitgeist in real time before the artists were critically acclaimed or on gallery rosters.
For the second part of this series, I will look at how one might go about starting a journey as an art connoisseur with $50, $5,000, $50,000 or $50 million. I use this simplification to allow me to give examples of art works as I believe there are limits to the adequacy of written or verbal explanations. This is particularly true in the visual arts, where your ‘eye’ and your ‘gut’ can be as important as the reading and listening.
The Entry Points
$50 million and more
If you are in a position to begin your art collection at the multi-million dollar level, then art is likely to represent a ‘safe house’ investment with its value proven over many years. To invest at this level is to acquire a museum quality work; a Picasso, a Van Gogh, a Bacon, and imagine a legacy for your collection from the outset.
Let’s look at the most expensive work ever sold at auction by British artist Francis Bacon (b.1909 – 1992). ‘Three Studies of Lucian Freud’ (1969), sold in 2013 for US$142.2 million. It has been sought after for decades. In the 1970s, the three panels were sold off separately, much to Bacon’s dismay. However, in the 1980’s, a Rome-based collector patiently set about reuniting all three over a 15 year period. He succeeded and spent years living with them before selling them privately. The legion of advisors in the sale room were certain that the work would retain its value. One of the bidders was quoted in the New York Times afterwards, saying “I loved that painting and I couldn’t control myself,” he said. “Maybe someday I’ll have another chance.” This bidder will likely battle it out with other collectors if this work sees the auction room again. This group of unsuccessful bidders comprising private collectors and super dealers, such as Gagosian, ensure Bacon’s market is secure.
At the news worthy end of the art market, the best advice is to stay close to the market, don’t bet against those controlling the market and ensure you have watertight provenance. For tens to hundreds of millions, you are buying a degree of certainty. You are buying works by artists whose place in art history is undisputed and whose works are rarely available in the market.
Aside from the museum-worthy paintings, an investment of $50 million would allow you the freedom to create a sculpture park featuring sculptures by established artists such as Ai Weiwei, Henry Moore, Barbara Hepworth, Yinka Shonibare, Anish Kapoor, Tony Cragg, and Richard Serra, creating a cultural legacy and a sound investment. In addition to the permanent collection of established (value-proven) artists, an annual $1 million sculpture commission would make a wonderful addition to the sculpture park. For mid-career artists this would provide much-needed patronage, allowing them to break-out and make ambitious, monumental sculpture and installation work (the production costs often prevent younger artists creating monumental sculptures). This path has been followed by a number of private foundations and collectors globally. These sculpture parks offer an immense service as they open up to visitors and give artists high profile commissions.
To continue our journey with Francis Bacon, it is interesting to note that you can become a Bacon connoisseur and collector with an annual investment of around $50,000. His triptych, ‘Sabatier 17’ (1983), sold in 2015 for $68,000 (edition of 180). Keeping an eye on the pragmatism, in 2013, edition 77/180 of the same work sold for around $20,000.
Of course, $68,000 is a significant amount and the same level of due diligence on provenance, pricing and the importance of the work should be carried out. As for the headline Lucian Freud triptych however, to put it in another context, a BMW 5 series is around $50,000 and is unlikely to double in value over two years.
$50,000 a year would allow you to develop a deep understanding of works on paper and build an exquisite collection of prints and original works on paper by blue chip artists. For example, David Hockney’s ‘Swimming Pool’ prints (the paintings in this series sell for $1-7 million) and a set of 10 Yoshitomo Nara prints are both available in the region of $50,000.
Another collecting approach would be to look at the most senior contemporary artists in Southeast Asia and allocate time and resources to understanding and collecting their work. With $50,000 you could collect original works on paper and smaller paintings by some of the regions’ most senior living and recently deceased artists such as Chua Ek Kay, Ahmad Zakii Anwar, Natee Utarit, Ian Woo and Jumaldi Alfi.
These are just some examples of approaches to collecting. There are as many avenues as there are personalities and this is where you can exercise your singular vision or your curatorial approach with the help of a curator or advisor.
A Dorothy and Herbert Vogel style approach to connoisseurship would work really well at this level of investment; buying graduates’ work over a number of years and supporting their peers to create a unique art historical narrative. This requires a lot of time if you do this solo but the journey can be rewarding.
At the other end of the spectrum, famous ‘factory-based’ artists such as Takashi Murakami and Damien Hirst release large edition prints available at auction for a few thousand, whilst other well-known artists who work with print publishers, such as Anish Kapoor, to create print series at this level.
Between these two ends of the spectrum, an annual investment of $50,000 would allow you to build a collection of Southeast Asian photography by emerging to mid-career artists. The region has strong contemporary photographers and contemporary artists working in this medium with local and international support. Works by Manit Sriwanichpoom, Genevieve Chua, Robert Zhao, Michael Lee and Yee I-Lan would make an interesting start.
If you follow emerging artists, I would advise buying the very best the artist is producing, having examined his or her entire practice. The question people often ask is how to identify if a young artist is one to follow.
So how do you know who to work with? Firstly, it goes back to the overarching advice of buying art you connect with on a personal level; something that will fascinate you for years to come. Then, see as much work as you can and identify artists that demonstrate originality at a conceptual, technical and aesthetic level and make the right career choices. Finally, build a network of like-minded collectors and curators and talk to that network all the time.
I often go with my initial ‘gut’ instinct and then cross-check this split second reaction later with background information. It is sometimes hard to articulate why I select one artist over another. This difficulty had puzzled me for a while, until I read ‘Blink – The Power of Thinking Without Thinking’ by Malcolm Gladwell. Gladwell argues that we need to “accept the mysterious nature of our snap judgments”. He provides numerous examples to prove this theory, which are wholly convincing. There is a fire-fighter who suddenly senses he has to get out of a burning building and the art expert who sees a ten-million-dollar sculpture and instantly spots it’s a fake. Suffice to say, if someone has sufficient experience in their field, they should be adept at making snap decisions when necessary.
With a love of art and $50, visit The Royal College of Art ‘Secrets’ exhibition or Pamaran Poskad in Singapore. Both invite well-known artists and students to create postcard sized work. I looked back at the postcards I bought around eight years ago at Pamaran Poskad to see how my gut instinct played out and found a series of Heman Chong and Ezekiel Wong Kel Win postcards. Heman now has gallery representation in Singapore, Amsterdam and Shanghai, and is opening a solo show at the Rockbund Art Museum, Shanghai in January 2016. Ezekiel has just been selected as one of three Ion Young Talents for 2015. Even with a small postcard sized work by a young artist, you can become invested in their career which is interesting, rewarding and a worthwhile journey.
I mentioned divestment in the first part of this series and this is something you may want to explore before deciding to buy. I strongly advise keeping art work and passing it to the next generation. However, occasionally divestment is necessary and it is worth knowing how this works. This is very different to ‘flipping’ a work or ‘trading’ in art. For now, I will just note that art is illiquid and successful divestment can depend on timing, pragmatism and a trusted network.
Some collectors are visionaries themselves and can, blink and identify artists changing the face of the art world in real time. This vision doesn’t come out of no-where. In fact, it comes from meticulous research and relentless looking. Art connoisseurship cannot be viewed as trading and the best case scenario for anyone with $50 or $5 million is a journey and a collection from which you derive immense enjoyment, has personal value to you and perhaps cultural value in itself. Behind the scenes this can be supported by financial pragmatism and due diligence. With patience, a gut instinct (your own or others) and passion, art collecting is a journey waiting to be begun. Bon Voyage!
*Tolla has 8 years of experience in the Asian art scene as a gallerist, curator and art advisor. Tolla founded Give Art Space in 2009 to create artistic dialogues between Southeast Asia and the UK. During this time she conceptualised, managed and curated three editions of the Artist-in-Residence Exchange Programme co-founded by The British Council and The Singapore International Foundation.
Prior to this she was a commercial lawyer in London, latterly with Beazley PLC. Tolla has completed the Art Law module of the Sotheby’s MA in Art Business and has an LLB (Hons) European Law from King’s College London.
Tolla is currently curator/consultant at The Artling.
Text by Tolla Duke Sloane
This article was originally published in Art Republik