Investing in the bigger picture
With the dizzying prices commanded by big-ticket artworks, investing in art may seem like a passport to riches. But appearances can be deceiving, says Matthew Partridge.
Investing in Art- Not a Get Rich Quick Scheme
Investing in art is always a tricky subject to write about because there are so many elements that need to be considered. The first rumour to dispel is the ‘get rich quick’ fallacy. Art is expensive, no doubt, but if you’re looking to double your money overnight, you’re in the wrong place. Baylon Sandri, owner of the Stellenbosch Modern and Contemporary (SMAC) gallery, notes that art is ‘illiquid – unlike conventional investing, where assets can be traded with relative ease over short time frames and within established margins’. The scale used for establishing the value of an artwork is almost entirely manufactured by a web of players who are continually re-stacking the decks. The art world is dominated by private sales, and the details of who sells and for how much never reach the public domain. The real commerce of the art world is kept to a clutch of insiders – typically dealers – who have their own interests to protect.
Long Term Investment
That is why it is near impossible to make money by investing in art if your intentions are purely commercial. So you need to be a little savvier when choosing where to put your money. The concept of ‘investment’ also needs to be looked at holistically. As Sandri says, if you think of an investment as a long-term gain and are not motivated by short-term profits, then you are on the right track. Investing in art does not mean simply buying one artwork and hoping that it will appreciate in value; rather, at the core of making an investment in art is building a collection.
A collection can be built in several ways but, ultimately, speaks of your journey through the process of buying and loving the objects that you choose to surround yourself with. Artworks have no use beyond their aesthetic appeal. Sure, they may be calming or decorative, but they will never be used for anything other than as a curious commodity that reflects an individual’s taste. Investing in art, then, is about investing in the career of the artist whose work you have chosen to buy – because artworks, too, have careers. The key is research. When choosing young artists, it helps to know how they relate to their contemporaries by comparing details such as where they have exhibited and how frequently, or in what collections they are represented. In short, it is crucial to keep a level head and to do your homework – gut instinct is important but, when spending significant sums of hard- earned money, it pays to be calculating.
Frame of Reference
Unless you are lucky enough to be purchasing directly from the artist’s studio, there are two other locations where you can buy art: the primary market, such as an art gallery or an art fair, and the secondary market, such as auction houses and art dealers. Both have their merits as well as their pitfalls. Art galleries are considered to be the gatekeepers of taste. It is in their best interests to establish and protect the market value of an artist (although not necessarily of their careers). Consequently, they are often guilty of over-inflating prices in order to build hype around an emerging artist (not to mention earn a sizable commission for themselves).
Know your Investment Market
The best time to get a sense of how the market averages out on the primary market is when all the galleries come together to show their stock and, effectively, lay their cards on the table. This is the role of the art fair. Art fairs are a relatively new concept in South Africa. Traditionally, they are little more than a dressed-up trade fair at which vendors market their goods and set the trends for the forthcoming season. Currently in its seventh year (and the oldest fair in the country), the FNB Joburg Art Fair opens in August and follows the traditional model of the international art fair. Founder Ross Douglas identifies three major benefits that art fairs provide to the buyer. First, he notes, ‘galleries often keep their best works back to show at art fairs’, which consequently serves as a good way to measure a gallery’s stable. The second advantage that Douglas sees, particularly in the case of the FNB Joburg Art Fair, is that ‘it is a great place to discover new artists from the continent’. The FNB Joburg Art Fair has several foreign galleries that exhibit, giving it a distinctly international flavour. Finally, Douglas explains that the greatest advantage of these events is the opportunity to spot trends ‘by looking at what people are buying across the board’.
It’s necessary to add, however, that the downside to having so few established art fairs is that you do not necessarily get an objective look at the playing field, owing to practical considerations, such as location and exhibitor numbers. Set in the central business district of Sandton and hosted by Artlogic, the FNB Joburg Art Fair also has its diversity limited by the cost of exhibiting. Due to this factor, smaller galleries are not as willing to buy into the model and a lot of artists are subsequently excluded from the equation. Another factor is the provincial situation of such an event – as art costs a considerable amount to transport, a vast majority of smaller galleries based in Cape Town have in the past chosen not to participate. However, this monopoly was challenged by the introduction last year of the Cape Town Art Fair, courtesy of events company Fiera Milano, which has created a market platform that has been conspicuously absent and sorely needed.
The Cape Town Art Fair
Cape Town’s tourism appeal means that the timing of the fair – at the beginning of the year – is a well-considered decision. Nevertheless, much like its Joburg cousin, the prices may be intimidating to the first-time buyer. At this fair, too, many galleries adopt the same approach they do in Joburg, focusing their efforts on representing a few artists with major works. ‘That’s my strategy,’ admits Jonathan Garnham, owner of Blank Projects. As the Cape Town Art Fair is only in its second year, Garnham speculates whether South Africa has the ability to sustain two art fairs. Showing big, bold abstract paintings by Kerry Chaloner and Jan-Henri Booyens, whose works were sold on the opening day of the fair, suggests, however, that there is room in the market for outstanding works. A similar opinion is held by Justin Rhodes, owner of Whatiftheworld Gallery in Cape Town. ‘The thing about art fairs is that you have to buy unique works that you feel are not going to be there tomorrow,’ he advises. Having exhibited at all the Joburg events as well as at several international fairs, he should know.
Some of the popular favourites earmarked by Rhodes in Whatiftheworld’s stable include painter Michael Taylor, whose work regularly sells out, as well as Dan Halter and Cameron Platter, who will be showing at this year’s fair in Joburg. ‘If Cape Town markets itself well enough overseas, it should be very successful in attracting international audiences because of the city’s appeal as a travel destination,’ Rhodes anticipates. One of the highlights of this year’s Cape Town Art Fair was undoubtedly upcoming artist Jody Paulsen, whose bold felt collages with their distinct pop sensibility proved a hit with buyers and earned him a considerable commission for the Zeitz Museum of Contemporary Art Africa, which is being built at the V & A Waterfront and is due for completion in 2016. ‘I was lucky to have that much big work at the fair,’ says Paulsen, whose gallery, Brundyn+, took a focused approach towards exhibiting trophy items. Paulsen has just released his own fashion label in collaboration with local menswear label Adriaan Kuiters, further suggesting that he is worth watching in the future.
Art for the People
The reality that needs to be faced is that the South African art market is still relatively small and insulated, which means that it is not always very welcoming to new buyers who are starting to build a collection. This is where the Turbine Art Fair in Newtown, Johannesburg has stepped in, providing a platform for smaller galleries and those with an altogether humbler budget. Long-time dealer and collector Warren Siebrits, whose gallery Maker exhibited at this year’s Turbine Art Fair, is enthusiastic about the event. A first-time dealer would do well to establish a relationship with dealers such as Siebrits. Open and generous with his knowledge, he deals in works by artists whose repertoires are carefully chosen for their historical value. At the 2014 Turbine Art Fair he sold a number of works by Walter Battiss, who has proven to be a major hit at auction. ‘The Turbine Art Fair was exceptionally well received,’ says Siebrits, who notes that the attendance figures doubled from last year and that on the first day alone. Identifying the points that made it successful, Siebrits says that it was ‘less stuffy’ than the other fairs – ‘It was easy for people to make contact with galleries’ – and that he spoke to a number of attendees who had been keen to build art collections but had not felt confident enough to do so at other venues. ‘A good place to start buying art is one that you are comfortable in,’ says Siebrits, who believes that there needs to a greater range of forums that facilitate a dialogue between members of the public and galleries.
Speaking of his role as dealer, he says, ‘Think about it: when you facilitate a sale you’ve not only introduced a new person to the art world, but are also growing an artist’s career with such investment.’ Siebrits says that he bought a work by Andrzej Urbanski, known for his outdoor murals, from a smaller Cape Town Gallery called Salon 91. ‘I felt stoked about buying a one- off work that I loved.’ That’s a feeling he tries to encourage when facilitating a purchase.
Just because artists do not have major gallery representation doesn’t mean their works are not worthwhile additions to a collection. One of the issues to navigate carefully when buying art has to do with the kind of work in question, and here size usually does matter, especially when it comes to editions. While most galleries will encourage you to purchase original works such as paintings, these may be out of your price range; if that’s the case, then prints are often a good way to begin building a collection. When buying prints, a specialist printer is usually the best place to begin. Two such galleries that specialise in prints and editions are David Krut in Johannesburg and Warren Editions in Cape Town. Strictly speaking, these are not galleries, but rather print studios where editioned prints are sold. David Krut typically deals in artists who are more established, such as William Kentridge and Deborah Bell, whereas Warren Editions is noted for representing up-and-coming artists whose careers are blossoming.
One of the wonderful things about prints is that artists who are noted for their skills in other mediums, such as painting, can very often successfully translate their style into print. An example of such an artist is Georgina Gratrix: she is represented by the SMAC gallery, which sells her paintings and drawings, while her prints can be acquired through Warren Editions. Known for her distinctive use of thick impasto paint, Gratrix’s prints carry the same playful tone as her other works.
Going, Going, Gone
The secondary market is a great place to try your hand at buying prints if you are looking to expand your collection to older, established artists. Apart from the blockbuster sales that make headlines, auctions can be the perfect space in which to lay the foundations of a collection. The secondary market is, in many ways, kinder to the buyer, because the economic precedent of an artist’s track record has already been firmly established. By looking at the history of an artist’s prices, the prospective buyer can see what is affordable and what is outrageous, and spot a good deal when it comes along. The problem with auctions, however, is that they are often perceived as an intimidating environment in which to begin buying art. Emulating international trends by removing the traditional stuffiness associated with auctions, Strauss & Co has recently launched its online auction platform. Senior specialist Ruarc Peffers says that one of the primary benefits of this new platform is that ‘it makes good art accessible to the public on the same terms as an auction, but without the formality of such an event’.
Another advantage that Peffers identifies in the online auction is that ‘it gives a less threatening platform for artwork to establish a market precedent’. Auctions are all about precedent, and their primary advantage is that all the sales history is available to the prospective buyer, which means that investments can be made after considered research.
With the advent of art fairs, which are still a relatively new phenomenon in this country, there is a similar transparency developing, with the marketplace becoming less rarified and consequently attracting new collectors. While investing in art may never bring stratospheric short-term financial gain, it will spark a fire that you will feel the constant urge to feed, and it will continue to give you pleasure as you grow your collection. And that, ultimately, is an investment in yourself.
Aimed at educating buyers and enlarging the art market, the annual Turbine Art Fair, which took place in July at Newtown’s Turbine Hall, attracted almost 6 000 visitors. A showcase of contemporary local art (more than 40 galleries exhibited), the fair emphasises accessibility and affordability: all works are priced below R30 000. ‘Too few people have the opportunity to acquire art, let alone the confidence to start their own collections, which is why we started the Turbine Art Fair,’ says Glynis Hyslop, managing director of The Forum Company, the fair’s organiser and sponsor.
Safe and Sound
Tonya Lehtinen is an art storage consultant at Aspiring Logistics Group, the only internationally accredited climate-controlled specialised art storage and crating company in South Africa. Lehtinen, who spent five years managing the Henry Moore, Picasso, Kandinsky and Giacometti collections at the Didrichsen Art Museum in Helsinki, provides pointers for safeguarding your collection.
‘The lack of sophisticated art storage in SA forces many collections to be kept in environments that are less than ideal. Aside from the peripheral support services you have access to, like crating, logistics and in-house insurance cover, a professional storage facility will house work in a controlled climate with consistent temperatures and appropriate relative humidity. Factors like fire-retardant materials and water protection are built in, and stringent security measures are put in place to limit access to the artworks. Aside from physical safety, the biggest advantage of storing art with a specialised art-storage company, however, is the tracking, documentation and management of each piece.
These components become invaluable when accessioning work to a collection or when art works get recalled from storage for exhibition. Condition reports are updated, location and tracking are recorded and work is packed on site by white- gloved handlers for transport. ‘There are art logistics and storage companies that offer the option of curated floor space or cubicles, and have professional consultants on hand to advise on the layout and planning of your private cubicle. A viewing room may also be provided, which is ideal for photographing, evaluating or viewing artworks without having to transport them to an alternative location.’ Fine Art Logistics (011 404 1421) and Knox Titanium Vault Company offer secure art storage in Joburg, albeit without climate control.
- Aspiring Logistics Group: aspiring.co.za
- Fine Art Logistics: 011 404 1421
- Knox Titanium Vault Company: knoxvault.co.za
- Blank Projects: blankprojects.com
- Brundyn+: brundyn.com
- David Krut: davidkrut.com
- Maker: makerstudio.co.za
- Salon 91: salon91.co.za
- Stellenbosch Modern and Contemporary: smacgallery.com
- Warren Editions: warreneditions.com
- Whatiftheworld Gallery: whatiftheworld.com
- Cape Town Art Fair: artfaircapetown.co.za
- FNB Joburg Art Fair: fnbjoburgartfair.co.za
- Turbine Art Fair: turbineartfair.co.za
- Strauss & Co (online): straussart.co.za/straussonline