A rt I n v estme n t | Fine Art
The absence of genuine international buyers I believe is a trend that will eradicated over the course of the next decade. the same year! The absence of genuine international buyers I believe is a trend that will eradicated over the course of the next decade. The high flying results of Ron Mueck in the US and Europe (Man Under Cardigan sold through Christies in London last month for AU$1.01M inclusive of buyers) will in many respects be a catalyst. Primarily though the seasoned collectors, particularly in Contemporary Art, will look to the primary market first. To allocate AU$15M into a single work in the Australian market is to purchase an Australian masterpiece – it would something along the lines of Tom Roberts’ Bailed Up (in the permanent collection of the AGNSW). The masterpiece is not necessarily the best investment. The thing about the Richter is that while it is an enormous amount of money, it is still a long way below the prices realised for many of his contemporaries. We have started to see a similar move in the prices for Leon Kossoff as well. Richter and Kossoff represent the last of the old guard since the passing of Lucian Freud and CyTwombly earlier this year. I’ll be keeping a close eye on the movement in these two artist’s prices very closely moving forward as in the very top end of the market, I feel they are going to provide better investment than a mediocre Warhol or a scratchy Jasper Johns. In the Australian market, it is the likes of Rick Amor, Tim Storrier and Peter Booth that hold a similar level of interest for me where we have seen a trend establishing itself in the secondary market. Primary market wise
40 | AHA.Investor
Dec/Jan 2011
though is where the best buying from an investment perspective is likely to manifest itself and specifically in works ranging from the AU$50,000 – 150,000.00 bracket. In this bracket, while there is undoubtedly a level of risk, the strategies for managing these risks are more evident. For the more speculative investor then AU$15,000 – 50,000.00 range is still good ground to harvest, however the associated risk is increased. The Private Equity model of 1 in 10 will make it is not a bad philosophy to take in this end of the market even when you are looking to identify similar fundamentals within each artist you are considering. Most importantly for this sector of the market – remember it is FINE ART so buy what you like. Worst case scenario is you end up loving the work even if the artist’s prices don’t sky-rocket. Global Equity markets are continually being undermined by continued concerns over sovereign-debt in the Eurozone. With France teetering on the brink of joining the US and losing its Triple A rating, Berlusconi having realised that he isn’t going to charm his way out of this predicament and the thread for the Sword of Damocles hanging over Papandreou finally snapping coupled with anaemic growth reported out of the US, is it any wonder that investors are migrating en masse to safer havens? Intervention by the Swiss and Japanese authorities to curb the appetite for their respective currencies is a clear indication of this move and in conventional terms Gold has undoubtedly been over bought such is the volatility of the index. Of course these are hardly conventional times. Even so, if Gold has gone parabolic, as some reports suggest, it will test the constitution of investors for months to come. Fine Art purchased wisely continues to demonstrate its capacity as a strong long term alternative and store of wealth. £10.49M into a classic Richter all of sudden doesn’t appear to be quite so bewildering or absurd. Of course the trick is buying wisely – the investment will always lie in the quality.