Why an art advisor is not only essential for novice collectors, but also those looking to grow their portfolio
You either love a Basquiat or you don’t. It isn’t everyone’s cup of tea. But there are some who understand the value of art as an investment, and adding a contemporary piece from the late Jean- Michel Basquiat to your collection, makes for a great long- term investment. However, investing in art doesn’t mean you pass up on pieces of interest. In fact, it’s vital to buy a piece you love, one with a great history, that you connect with and speaks volume. After all, it will most likely be hung in your home or office. Take for instance the Japanese billionaire Yusaku Maezawa, who purchased the Basquiat ‘Untitled’ impressionist, contemporary piece for $110.5 million at a Sotheby’s auction in New York earlier this year. Maezawa’s affection for the artist’s collection resulted in a record- breaking sale, the most expensive piece ever bought, that was previously purchased by a couple (who left it to their two daughters) for a mere $19,000 in the Eighties. The piece appreciated by $109,981,000 in just 33 years, yielding a high return that could never be anticipated. This isn’t the only piece in Maezawa’s collection however, he previously bought another painting by Basquiat for $57.3 million. Other works in his collection include the likes of Jeff
Evidently, Maezawa has a penchant for contemporary art, but if we had to follow in his footsteps, where would we begin and how does one go about securing, or investing in, a piece that appreciates overtime? That’s where art advisors are brought into the equation. “There’s been a huge shift in appetite for art. We’re seeing great, exponential growth in the post warrant contemporary art genre in particular,” says Salma Shaheem, head of Middle Eastern Markets of The Fine Art Group (an art investment advisory house). “Over
the last 10-15 years or so, art has been made accessible to everyone. Ten years ago, it probably wouldn’t make the headlines of the New York Times and no one would talk about it. Now, every time there’s a record-breaking auction, all the media outlets talk about it. So, people are constantly bombarded by this art news which I think is great,” says Sylvain Gaillard, who transitioned from private banker to an art advisor and Director of the Opera Gallery, to immerse himself and grow his adoration for art and curation.
The sudden inflation can be attributed to the increase in wealth, people looking to build a collection for investment purposes and the fundamental law kind of mix, of supply and demand. “You have a lot more people who want to buy art. And the good pieces are either taken care of, spoken for, or in a private collection or museums. So, when a good piece comes out on the market, you have many who want to acquire it and that drives the price and demand up,” he goes on to say.
The UAE, as Shaheem states, is an emerging market with a strong foundation for the future of arts. As an advisor, her job entails visiting museums, galleries, keeping an eye out for art that has just come up on the market, and helping clients pick the right piece for their specifically curated collection. There are several ways in which art advisory works. “I meet a client that knows they want to start collecting art and might have an affinity towards it but they don’t know where to begin. That’s one scenario, the other is a person who began collecting a few years ago, or inherited art, and now has over 40 pieces and doesn’t know what to do with it. We come in and help with disposing of that and reinvesting whatever money we can gain into better pieces,” she tells us.
But with art comes a price tag that can be considered quite a risky investment. That’s where Shaheem stresses on the necessity for an advisor. “The market is highly unregulated and very opaque. If you don’t know what you’re doing, you will spend and not be able to recover it,” says Shaheem. “I’m not saying don’t buy art you love. All I’m saying is you can have a piece that you’re in love with, and one that may have the ability to increase in value over time too. It’s significant that thorough research is conducted with every transaction,” she explains further. Gaillard, on the other hand, suggests approaching art as an investment with caution. “By definition, I’m always very cautious when people approach art as an investment because it is something you buy hoping that the value will go up in the future. Art must be taken extremely cautiously, because you can strike gold.” His guidelines? “Always buy what you like because you are going to leave with the piece, and should go for the long run. People always hear about the guy who made millions from selling one or two paintings, but what they don’t tell you is that probably in the same year, he bought another five paintings which are worthless today. So, you always have to be careful about investing in art as there’s always two sides of the story.”
There are a few established names that are rooted in history and probably will continue to be a great investment opportunity over the next few years or so. For instance, Gaillard reveals that Picasso has done over 50,000 pieces, most of which are in the Catalogue Raisonné. He is amongst the top five artists at 2017 auctions. “If you buy a piece right now, guess what? In 30 years, it’s going to be older, rarer, so most likely, will appreciate again. There’s no guarantee but most likely it will.” The lesson to learn is if you’re adamant about investing in art, think long term. “Go with true and tested names and make sure you buy them at the right price. That’s where you’re going to get the upside. If you just want to flip things, you will flip it around one, two, three or four times and then the fifth time you may go bust and lose everything. Just because you buy a painting and sit on it for ten years doesn’t mean it will appreciate,” says Gaillard.
At The Fine Art Group, Shaheem works with clients on a retainer basis, wherein she advises on a piece, evaluates something a client spotted while travelling and even pitches artwork her team have spotted, reporting on the provenance, condition and value. Opera Gallery in DIFC, on the other hand, is a playground for art enthusiasts and those who want to see talent before their eyes. Here, you can walk in and build a relationship, gaining guidance and support along the way. “The goal is not to sell the piece. It is to get into their brain, understand what their aim is, whom they are buying it for, the purpose, and then manage their expectations. We also advise clients what might be tax-efficient. It’s a lot more than just the transaction,” says Gaillard.
At the end of the day, any investment requires careful thought, and art is just the same.