For those looking to invest, art is more attractive than ever, and it’s not a bad time to sell either.
When Princess Diana’s family, the Spencers decided to have a clear out of Althorp — the ancestral family home, they decided to get rid of old skis, collectible jelly moulds… and a 1613/4 Rubens which Christie’s has just sold for $19 million to an anonymous bidder. As a whole the Old Masters sale smashed expectations to raise a total $64.2 million; and on the same day rivals Sotheby’s sold a giant silver wine cooler from the early 1700s for $3.8 million — a record for English silver. Even for silverware and Old Masters which have suffered from a lack of fashionable appeal, now is looking like a good time to sell. But who is doing the purchasing? And are they set to keep art shopping?
Well, the 18th century silver wine cooler was bought by a private Asian collector, and it would seem that he is one of many. The Chinese art market in particular took a knock last year in the aftermath of the global economic crisis. But now, not only does it look to have recovered, growth is actually accelerating. ArtTactic, specialists in art market research and analysis, have drawn encouraging points from their most recent study:
- The overall contemporary Chinese volume in 2010 might come close to the 2007 level, the second highest achieved for contemporary Chinese art.
- With a sale total of HK$303 million/US$39 million (including buyer’s premium), the Evening Sale of Asian Contemporary Art and Chinese 20th Century Art on May 29th, 2010 achieved three times its pre-sale estimate and was the first white glove auction for any Evening Sale in Asia.
- Total volume of Chinese Contemporary Art sales ($15,634,990) was more than double that of both Spring 2009 ($7,587,710) Autumn 2009 ($7,134,920).
- There is a new group of internationally renowned contemporary Chinese artists that are generating strong auction interest, such as Cai Guoqiang and Ai Weiwei.
Nor is the upsurge in art sales confined to Asia. Millionaires the world over are putting more money in art than ever, according to a new report by Capgemini SA and Merrill Lynch & Co. For the increased number of millionaires (up 17% from last year) art has emerged as the most popular category of ‘passion investment’ according to Capgemini’s Ileana van der Linde who managed the research.
‘Passion investment’ might sound like nothing more than a romantic idea, but according to the World Wealth Report which surveys 1,200 wealth managers who present 150,000 clients across 71 countries, the world’s wealthy dedicate around a third of their overall holdings to passion investments. Indeed over a quarter of those surveyed(29.8%) said art was the top choice of passion investment for financial gain. There is a clear message for luxury companies: if you can ignite passion, you can also drive sales.
“There has been a real shift in psyche,” said Van der Linde. “There is major distrust of financial markets and regulatory bodies, and people are looking to put their cash into tangible assets.”
Of course, emerging markets have long been known for turning to art and collectibles as a potential inflation hedge. The cliché is that rich Indians buy gold and jewellery while their Chinese counterparts buy up historic artefacts from their own culture. The trend is less well established in more mature markets yet, presumably largely as a consequence of residual distrust in the markets, 37.4% of European, and 31.1% of North American millionaires now view art as the most fruitful passion investment. “This is a significant turning point in the perception of art as an asset class in western societies,” said Michael Plummer of Artvest Partners.
Admittedly 90% of those surveyed had investible assets of $1 to $5m, excluding their primary residence, so they are unlikely, indeed unable to rush out to buy the next headline-grabbing Rubens, but this belief in art as investment is likely to be felt in the more modestly priced art categories. Moreover, since 63% said they would be more likely to invest if they had better access to expert advice there is clearly a market for commercial art advice which is not yet being fully exploited and satisfied.