2/16/2020

Keynesian Economics and Investing in Art, Emotional Dividends


The Washington Post ran an interesting Bloomberg article on noted economist John Maynark Keynes about collecting and owning fine art.  The Post/Bloomberg article reviews a recent Oxford Academic article looking at Keynes' collection and value based on insurance appraisals and note the increase in value over the years, showing strong increases, but still lagging behind the stock market index. Also, the article notes the following on the value increases "The ten most valuable items of the works he amassed account for 88% their total value — and just two of the works account for almost half of the entire collection’s valuation."

If you wish to review the Oxford Academic article which studies the portfolio and art collection of economist Keynes, click HERE.

The Washington Post reports
John Maynard Keynes was an economist, an investor, and an art patron. In the aftermath of the global financial crisis, his eponymous flavor of economics has become fashionable again. After a faltering start losing money in the currency markets, Keynes enjoyed a glorious run as a stock picker, building an endowment that still benefits his alma mater King’s College, Cambridge. For those wanting to emulate his prowess collecting paintings, a new study attempts to calculate how his art investments have fared compared with market returns.

The good news is that the study, published on the Oxford Academic website, suggests wealthy collectors can potentially enjoy the “emotional dividends” of owning art without missing out on returns. The bad news is that they’ll have to be either pretty astute in picking winners, or damned lucky in the artworks they buy. Keynes probably benefited from both. 

Keynes started building his collection in 1918, buying works by Cezanne and Delacroix. In the following years, he added pieces by Cezanne, Degas, Matisse, Modigliani, Picasso, Renoir and Georges-Pierre Seurat. The latter purchase,  at a price of 400 pounds ($520), was a preparatory study for the pointillist artist’s most famous work, “A Sunday Afternoon on the Island of La Grande Jatte.”

He resumed purchasing artworks between 1935 and 1937, including spending 3,500 pounds on Cezanne’s “L’Enlevement,” the most Keynes ever parted with for a single piece. By the time he bequeathed his portfolio to King’s College at his death in 1946, he had spent a total of 12,847 pounds amassing 135 pieces. (I sit on the King’s College investment committee that manages the endowment.)

While the report says it found no evidence that Keynes ever sold a painting he’d purchased, he wasn’t sentimental about his collection; in his will Keynes gives permission for its executors to sell parts of his bequest if needed to maintain his widow’s income.

The study values the collection over time by using various insurance appraisals conducted over the years as well as estimates commissioned by the authors from specialists in 2013 and 2019. If the combined works had kept pace with inflation, they would have been worth about 500,000 pounds last year. Instead, they were worth 76.2 million pounds, not too far short of the 90.2 million pounds the authors calculate Keynes would have generated in the U.K. stock market. “The long-term returns from the Keynes collection are substantial,” according to the report’s authors, David Chambers and Elroy Dimson of the University of Cambridge’s Judge Business School and Christophe Spaenjers of HEC Paris.

But there’s a catch. The ten most valuable items of the works he amassed account for 88% their total value — and just two of the works account for almost half of the entire collection’s valuation.

While the study doesn’t identify which works they are, I’m pretty confident that the Seurat study I mentioned earlier, which currently hangs in Cambridge’s Fitzwilliam Museum, is one of the blockbusting pair. The other, which the study says Keynes acquired for the princely sum of 1.50 pounds, was worth 20 million pounds in the most recent valuation. That’s quite a return.

If Keynes hadn’t been lucky or skilled enough to have bought those two stellar performers, the value of his collection would fall far, far short of what the stock market has delivered. “Extreme idiosyncratic positive returns — or the absence thereof — will matter a whole lot for the total return of any art portfolio,” the authors of the study write, with masterly understatement.

So the lesson from Keynes, if there is one, seems to be that in buying art, those emotional dividends stemming from the joy of ownership are probably a more reliable motivation than the prospect of turning a profit. 
Source: The Washington Post 



2/12/2020

Fine Art and Fractional Ownership


 Yahoo Finance ran a rather interesting and good article on fractional investments in fine art and collectibles. This is a growing sector for investing in fine art, and appraisers, art advisors and financial advisors should all be aware of the various products and offerings and have a basic understanding of how fractional investing and ownership works.

The Yahoo/Bloomberg article gives a good understanding of the process and the currently players in the fractional art and collectible ownership marketplace.

Yahoo reports
Jonathan Sharpe, a 25 year-old accountant in Greensboro, N.C., never thought of himself as a “baseball guy,” but when he saw a 1909 Honus Wagner T206 baseball card valued at $520,000, he decided to buy it.

Not all of it, though. The card was being issued through the fractional ownership collectibles site Rally Rd.—there were 10,000 shares valued at $52 apiece. “I thought it was a good idea,” Sharpe says. “They broke it down into enough shares that it was affordable.” He had the Rally Rd. app open when the card listed and bought a single share; less than 20 minutes later, every single share had sold. “It was insane,” he says.

Sharpe, who heard about Rally Rd. on Twitter, is one of thousands of individuals around the globe who’ve bought tiny fractions of luxury collectibles in an effort to participate in an economy previously reserved for the very wealthy.

“There’s a big focus around the investment aspect” of collectibles, says Micaela Saviano, a partner at Deloitte Tax LLP. “There’s been such a run-up in the market in the last 20 years, and there’s more and more media focus around growth in the art market.”

It’s not just art and baseball cards. In the past few years, these fractional ownership structures have sprung up for vintage cars, Magic: The Gathering cards, racehorses, vintage sneakers, and comic books.

John Day, a senior manager at Deloitte and a Rally Rd. user, says he’s spent about $21,000 on shares in Lamborghinis, watches, baseball cards, and rare books. “As someone who’s not going to buy a full Ferrari, I now have access to [invest in] one,” Day says. “But I don’t have to maintain it, insure it, secure it, or store it.”

Different Models

Each company’s model is slightly different. Rally Rd. (“The investments of the rich, now available to all”) allows people to buy and sell shares of collectibles while maintaining a block of shares in each. Feral Horses allows people to buy and sell artworks, then takes a commission on the money raised for each object. Masterworks, based in New York, buys artwork at auction, sells shares of the art, and then takes a fee and cut of the profits when it’s sold.

There are more than a dozen of these companies around the globe. A partial list includes: Acquicent (collectibles and fine art), Artopolie (fine art), ArtSquare (fine art), CurioInvest (supercars), Look Lateral (collectibles), Maecenas (fine art), Malevich (fine art), My Racehorse (race horses), Mythic Markets (games and comic books), and Rally Rd. (cars, watches, sneakers, and other collectibles).

All share a unifying premise: Luxury goods won’t just hold value, they’ll appreciate. “Our thesis is that art is a large asset class,” says Masterworks founder Scott Lynn. “If you look at different segments of contemporary art, it’s performed at about 11% every year, and that’s outperformed every major public equity market.”

Survivorship Bias

The reality is far more complicated. All artworks, racehorses, cars, and trading cards are not created equal, and not all of the “investment opportunities” offered by fractional ownership companies are the best in their field.

Just because one racehorse wins the Preakness doesn’t mean that every racehorse has a shot, and just because one Picasso delivers 800% returns doesn’t mean that all Picassos will do the same.

The claim that the art market beats the S&P 500 has been largely discredited, due to its aggressive survivorship bias. “The performance of the [top 50 contemporary artists] is largely a function of the fact that hot artists keep on getting added—after they’ve become hot,” wrote Felix Salmon, then a Reuters columnist, in a 2012 assessment of art market indices.

“It’s a classic case of investing in hindsight: if you only bought things which performed extremely well, then you would have made lots of money.”

Nevertheless, stories about wealthy people buying paintings and then making a large fortune a few years later are seductive, and it’s those stories that many fractional ownership companies are banking on to drive participation.

“People have the perception that any given artwork will triple in value,” Saviano says. “And that’s not the case. Each work of art is unique and needs to be analyzed on its own.”

As a result, it’s easiest to break fractional ownership companies into two broad categories: “collectibles,” for which value judgments are relatively straightforward (is a comic book in mint condition? Does the Porsche have all of its original interior? Is the Rolex rare?); and fine art, for which perceptions of value are constantly in flux.

Collectibles

Multiple collectibles sites have quickly found adherents.

Rally says it currently has $10 million worth of assets under management, with 150,000 active users. The platform has already sold two of its “assets,” a 2000 Ford Mustang Cobra, and a 2006 Ferrari F430 Spider “Manual” realizing gains of 18% and 16%, respectively.

Currently, there are about 60 cars on the site, along with 40 objects that include a gold Rolex. “We’re investors in these assets, up to 10%,” says Rob Petrozzo, a co-founder of the site. “So we benefit from their appreciation.”

Meanwhile, Mythic Markets launched in August 2019, with a “Black Lotus” Magic: The Gathering playing card valued at $90,000. “We sold through the first offering pretty quickly,” says site founder Joe Mahavuthivanij. “One hundred and twenty-four investors got involved in that deal, and I think it came out to an average of $700 per person.”

To the uninitiated, hundreds of people buying shares of a $90,000 playing card they’ll never touch, and thousands of people buying shares in a car they’ll never drive, might seem like a stretch.

But Mahavuthivanij points out that, from his end, “these communities are huge, and global, and Magic’s been around for 27 years now, and it’s continuing to grow.”

It stands to reason, he continues, that a collectible tier has emerged. “There’s an active secondary market where these are changing hands,” he says. “There are aggregators and online auctions that we use as comparable data points—if you were to value a house, you look at comparables in the area; we’re doing the same thing.”

Art

In the art world, definitions of value—not to mention desirability—are much more fluid. Take an artist such as Andy Warhol, whose  market has been languishing since its high in 2014. Anyone can look at an artwork’s return—an 8,220% return in 30 years for Warhol’s Last Supper!—and assume that it’s a smart investment. The person who bought it for $99,000 in 1988 certainly was wise. It sold for $8.2 million in 2018.

But that doesn't mean its value will grow the same way in the future. The 2018 sale price, which includes an auction house premium of nearly 20%, barely eked past its low estimate $8 million hammer price (which doesn’t include that premium). So the work wasn’t quite worth what the auction house expected, making its future value far less than sure. Past results are no guarantee of future performance.

(Other artists whose markets have soared, then deflated in recent years, include Damien Hirst, Jeff Koons, Christopher Wool, and a baker’s dozen of young process-based abstract artists who rose and fell from 2007 to 2014.)

Some of the owners of fractional art companies are carefully messaging around this unpredictability.

“Our minimum investment is €1 [$1.10],” says Francesco Boni Guinicelli, who, with Fabrizio D'Aloia, co-founded Artsquare. It has 3,000 users, 500 of whom have bought shares in a 1984 Warhol silkscreen print valued at €28,000. “We’re not evangelizing investing in art, but rather participating in the art world on a different level.”

The share price, he says, “is symbolic, but our target is the person who goes to a museum and wants to buy a mug with a Picasso on it, or a poster. If you’re willing to buy that, you might want to buy a share of an artwork.”

Artsquare’s business model is built on a 4% transaction fee for buying shares; investors can choose to pay a flat subscription instead.

Feral Horses, one of the other fractional art companies, is based on effectively the same principle: “By making the entry point so low, it opens up completely new possibilities,” says Francesco Bellanca, the company’s chief executive officer. “We sold shares in a €200,000 marble sculpture, which we then loaned to a museum in Rome,” he continues. “Four hundred of the 1,000 or so co-owners then flew to Rome to meet, and mingled. They were part of a community.”

The point, both men say, is that investing in art could be a good investment, but it is definitely a way to become part of an art world community.

That alone, they argue, is worth the share price. “That’s what we try to do on a daily basis,” Bellanca says. “How do we make this [investment] become an increasingly active participation in the art world?” The answer, he says, is that “rather than just give investors an economic interest in the piece, we work with galleries and artists to give them the opportunity to have a follower base that participates in the journey.”

Lynn, of Masterworks, argues that people should feel confident in the art market as a viable investment vehicle. “If you think about portfolio construction in general, a core tenet for any investor is diversification and lack of correlation,” he says. “Art isn’t correlated with other asset classes, and historically, certain segments of the art market have performed very well.”

For some investors, that argument resonates. “It’s not a certain investment, but at the same time I don’t see art to be riskier than the tech world,” says Nadir Luvisotti, a 31-year-old investment banker at Deutsche Bank in London, who spent about €2,000 to buy shares in the Warhol print issued by Artsquare. “Andy Warhol is a famous artist, and probably right now, he’s a commoditized one—everyone knows him and the value of his paintings.”

Hitting A Wall

Investment or no, all fractional ownership plans have to reconcile their “investors” to the fundamental paradox of partial ownership: They’ll never be able to drive their cars, read their comic books, taste their wine, or hang their paintings on their wall.

Buyers might now have access to the theoretical returns of the very rich, but for many of these ventures, that’s it. One of the primary joys of being a collector will, for the time being, still be out of reach.

“Part of the reason people like to own art is to see it on their walls,” says Saviano, the Deloitte Tax  manager. “When you take that away, you have to focus on the investment [component], and when you do that, it has to be substantiated.”

For Day, who bought shares of Lamborghinis on Rally, that hands-on experience is beside the point.

“I’m not so worried about driving the cars,” he says. “If I wanted to drive a Ferrari, I can rent a Ferrari” through supercar adventure sites. “I invested in it because it’s accessible to me. Buying a whole car is a kind of luxury, and whoever does that can say that their collectible car is in their living room. Cool. But that’s not me.”
Source: Yahoo Finance 



2/09/2020

Amazon's Jeff Bezos Buying Art


Bloomberg is reporting that Jeff Bezos, founder of Amazon and one of the richest men in the world is starting to put together a fine art collection.

It is reported that Bezos purchased  “Hurting the Word Radio #2” by Ed Ruscha for $52.5 million at Christie’s this past fall setting a record for the Los Angeles artist and “Vignette 19” by Kerry James Marshall, at Sotheby's for $18.5 million.

Bloomberg is reporting
Jeff Bezos kicked off the new decade with a $1.8 billion windfall from the sale of Amazon.com Inc. shares. There’s growing excitement in the art world that some of that -- or another chunk of his 12-figure fortune -- may be used to build an art collection.

Bezos, 56, bought two significant works during New York’s November auctions, according to art dealer Josh Baer, writing in his newsletter the Baer Faxt this week.

One piece, “Hurting the Word Radio #2” by Ed Ruscha, fetched $52.5 million at Christie’s, setting a record for the Los Angeles artist. The second, “Vignette 19” by Kerry James Marshall, sold for $18.5 million at Sotheby’s, more than doubling its high estimate.

“Every season it seems someone new or some new region” comes in and starts buying art and props up the market - “but when it is the world’s richest man it has the chance to move the needle,” Baer wrote in his newsletter without detailing how he obtained the information. “I stand by what I wrote,” he said by email.

Representatives for Sotheby’s and Christie’s declined to comment. Amazon’s press office didn’t respond to requests for comment.

Bezos was seen walking through the previews at Sotheby’s in November. During the evening sale of contemporary art, “Vignette 19” was bought by Cassandra Hatton, Sotheby’s vice president and senior specialist in the books and manuscripts department, on behalf of an anonymous client.

Art dealers and auction specialists said that Bezos -- if he did purchase the works -- would be a major new player in the market. It’s unclear what else he’s acquired.

Entry into the art world would be the latest pivot from the formerly low profile Bezos once cultivated. In the past few years, he’s had a style makeover and rarely been out of the headlines since he and MacKenzie Bezos divorced in 2019. That includes hitting the red carpet with girlfriend Lauren Sanchez and hosting a bash at his Washington mansion for the political and financial elite. He’s also currently house hunting in Los Angeles, according to the New York Post.

The Amazon founder has unmatched firepower to support these interests. He’s the richest person on the planet with a $125.6 billion fortune, according to the Bloomberg Billionaires Index. His interest in art could have a significant impact on a market where new art buyers are often responsible for driving prices higher.

Japan’s Yusaku Maezawa burst onto the scene in 2016, scooping up $98 million of art in two days; a year later, he paid $110 million for a painting by Jean-Michel Basquiat, a record for an American artist at auction. Saudi Crown Prince Mohammed bin Salman bought Leonardo da Vinci’s “Salvator Mundi” for a record $450 million in 2017. The masterpiece was being kept on the superyacht Serene, according to Artnet.com.

Following a slowdown in 2019, the top end of the art market is poised for a boost with two significant collections, potentially worth $1 billion, in play. Some of it may land on the auction block in May during the next big round of New York sales.

“Whatever his motivation,” said Wendy Cromwell, a New York-based art adviser, “Bezos is buying art at the right time.”
Source: Bloomberg



2/06/2020

Art Basel Hong Kong Cancelled


The Art Newspaper is reporting that due to the coronavirus, Art Basel Hong Kong has been cancelled.  The fair has been struggling with many issues and dealer losses over the past few weeks, and it appears the coronovirus was what tipped the balance to cancel.  According to reports, in addition to the coronovirus the fair was dealing with issues such as dealers backing out of contracts,  concerns over attendance as freedom issues between Hong Kong and China and the various protest movements.

The Artnewspaper reports
After weeks of uncertainty, the organisers of Art Basel in Hong Kong have finally announced they are cancelling the eighth edition of the fair due to the coronavirus outbreak. "Numerous factors informed this decision, including: fundamental concern for the health and safety of all those working at and attending the fair; the severe logistical challenges facing the build-out and transit of artwork to the show; and the escalating difficulties complicating international travel, all arising as a result of the outbreak of the coronavirus," the organisers said in a statement released today.

Marc Spiegler, the global director of Art Basel added that the decision to cancel Art Basel Hong Kong was "an extremely difficult one for us. We explored every other possible option before doing so, gathering advice and perspectives from many gallerists, collectors, partners and external experts".

"Our thoughts are with those affected by the recent coronavirus outbreak around the world," he adds.

The virus has so far infected more than 28,000 people in China and killed more than 560—more than during the SARS outbreak in the early 2000s. The World Health Organisation declared the coronavirus a global emergency on 30 January, prompting outcry from several dealers who said they could not send staff to work in such an environment.

In Hong Kong, where 18 cases have been confirmed, museums and schools have been closed and authorities said that beginning this weekend they would mandate that anyone entering the city from mainland China "self-quarantine" for the 14-day incubation period of the virus. There has also been widespread cancellation of flights in and out of the region and cross-border trains have been closed.

The New York-based dealer David Zwirner told ArtNews that he had pulled his Luc Tuymans exhibition, which was due to open in Hong Kong to coincide with the fair. The show will be moved to another of the gallery’s territories. Pace Gallery’s Hong Kong outpost is also closed until 4 February “due to the coronavirus outbreak”.

Spiegler says the fair organisers are "acutely aware of the important role that the fair plays within the region's cultural scene and for our galleries, both in Asia and across the globe. Our team dedicated extensive time and effort to ensure our show in March would be a success over the course of the past year. Unfortunately, the sudden outbreak and rapid spread of the novel coronavirus radically changed the situation".

Before the outbreak of the virus, fair organisers offered to refund 75% of booth costs if the fair was cancelled. Some dealers suggest Art Basel’s insurance should cover further costs, however, insurers say that epidemics and pandemics are often deliberately excluded from cover.

It is only the second time an edition of the Art Basel global franchise has been cancelled; the first edition of Art Basel in Miami Beach was postponed in 2001 after 9/11, costing the organisers an estimated $4m.

‘We are deeply grateful to our exhibitors, partners and friends all over the world, and especially in Hong Kong, who have stood by our side, lent their support, and shared insights and opinions over the past days and months," says Adeline Ooi, the director of Art Basel, Asia. "Our commitment to Asia and Hong Kong has not changed, and we look forward to the 2021 edition."

Art Basel had faced increasing pressure from dealers to cancel the fair in the lead up to the announcement. According to The Canvas industry-insider newsletter last week, 12 dealers had already confirmed they would not participate, while 24 leading galleries including Lévy Gorvy, Lisson and Paula Cooper wrote a letter to the organisers on 16 January expressing concerns over a drop off in the number of collectors and patrons attending, as well as threats to freedom of expression due to increased Chinese control in the semi-autonomous region.

The pro-democracy protests that have rocked Hong Kong for the past seven months had also put a strain on business—the number of collectors expected to attend the fair had been significantly lower. Adding to the malaise, artists had also voiced concerns to their galleries about exhibiting in a region where freedom of expression has been increasingly curtailed by Beijing.

“Many of our artists are unwilling to have their work shown at the fair,” the exhibitors wrote, because increasing Chinese control is not “consistent with their core belief in the freedom of expression”.

One anonymous dealer said the fair would have been “a full scale disaster” if it had gone ahead, while the London dealer Richard Nagy had described the show as “fatally wounded” and “commercially on artificial life support”.

Despite this, fair organisers refused to pull the plug, saying they were “working hard to review all possible options”, but to cancel or postpone was “a complex process, with many factors and multiple stakeholders”.

Other casualties of the Coronavirus include the new X Museum, which was due to open in Beijing on 17 March. On a post on Instagram, the co-founder Michael Xufu Huang said: “In order to fully co-operate with the prevention and control of the outbreak, the opening […] has been delayed.” The VIP preview and dinner on 15 March have also been postponed indefinitely. Meanwhile, the CAFA Art Museum has postponed its inaugural triennial, which had been due to open on 18 January. Art Central, which runs concurrent to ABHK, has not yet issued any statement regarding the coronavirus or its plans.
Source: The Artnewspaper 



2/05/2020

Christie's Experiments at the Lowe End of the Price Range


artnet news is reporting on an experimental auction at Christie's, called Chrsitie's 100 where there were 92 lots with starting bids as low as $100.  The interest was high, 96% of the lots sold and the auction totaled $357,375. It was of course an online sale, but it proved very successful with about 300 registered to bid and 160 unique bidders.

artnet news reports
Christie’s bet that an online-only sale of lower-priced art would attract new buyers seems to have paid off big time. The sale, dubbed Christie’s 100, featured 92 lots by many well-known contemporary artists, with bids starting at as low as $100. Certain works even sold for considerably less than the average New Yorker’s monthly rent, including a Louise Lawler print for $1,000, and a John Bock work on paper for $750.

In all, 96 percent of the works found buyers and the sale pulled in $347,375. That might seem like a drop in the bucket for an auction house whose marquee evening sales routinely feature seven- and eight-figure trophy lots that draw bids from billionaires around the world. But it goes a long way towards locking in new and aspiring buyers—especially those more comfortable making bids online, without having to raise a paddle in a packed auction room.

Two nights after the sale went live on January 28 there were already 160 unique bidders out of 300 registrants, indicating even more activity to come. Bidding wrapped up today.

“I have wanted to do this ever since I took over First Open a couple of years ago,” said Christie’s postwar and contemporary specialist Noah Davis in a phone interview with Artnet News, referring to the house’s initiative to offer art at more accessible price points. “As the First Open venue matures, there are more objects in the $20,000-plus range. That is where we make the most money. But we didn’t want to lose sight of the opportunity to correctly market lower-value items too.”

Noting that there are typically hundreds of bidders registered for First Open sales, Davis says that sales like Christie’s 100 are a boon to a demographic with a modest collecting budget. “If there is a percentage that would like to bid, but [they] don’t necessarily want to bid on a $20,000 object, we want them to know that this is where they can come,” he explains, “as opposed to sifting through 300 lots in order to find things in their striking range. That can be tedious and overwhelming.”

While the vast majority of lots had an estimate below $5,000, a few objects were in the $10,000 to $20,000 range.

The top price of the sale was earned by a Vera Lutter triptych, Frankfurt Airport VII: April 24, 2001 (2001), that opened with a starting bid of $100 and sold for $37,500 on an estimate of $20,000 to $30,000. Other lots that opened with $100 bids included Roxy Paine’s Amanita Muscaria #5 (2002), which sold for $8,750; Jean Tinguely’s Vive la fête des idiots (1989) which sold for $8,750; Yayoi Kusama’s Yellow Pumpkin & Red Pumpkin (2015), which went for $3,500; and Matt Mullican’s Untitled (1991), which realized $8,750.

Also among the five-figure works was  a Jeff Koons Balloon Dog (Red) (1995) stainless steel sculpture, which sold for $16,250.

Davis said he saw patterns typical of online sales including strong bidding presence from New York and Los Angeles as well as London, and what appears to be a spike in bidding from people arriving at work early in the morning or bidding from home upon their evening arrival.

Following the successful experiment, Christie’s will see if the enthusiasm carries over to the next few First Open sales. “It’s not about trying to make an extreme or insane amount of money for Christie’s by nature of the profile,” says Davis.
Source: artnet news 



2/03/2020

Strong Attendance and Buying at London Art Fair 2020


Art and Collections reports on strong attendance and buying at the 32nd London Art Fair with over 23,000 visiting the fair. Dealers were noting strong interest in emerging contemporary art, photography and  British art. I need to post on the Americana week sales and shows, but from London this is a good sign for 2020 with active collectors and attendance, as well as strong international gallery representation.

Art and Collections reports on the fair
London Art Fair 2020 at the Business Design Centre in Islington concluded its 32nd edition on Sunday 26 January, reporting robust sales and an overall attendance of 23,000 visitors. Confidence in both modern and contemporary art was evident as the Fair opened with a Preview Evening on Tuesday 21 January, where collectors, institutions and art enthusiasts enjoyed a first look at presentations by 129 galleries from 14 different countries.

Sarah Monk, Director of London Art Fair, said: “ As we enter a new decade, London Art Fair endeavours to continue reflecting the art market in all its breadth, from established and more traditional mediums to new areas of growth, such as the surge in interest in textile art. We celebrate our heritage through initiatives such as our annual Museum Partnership, whilst also embracing change and disruption through our curated sections which feed our visitors’ and collectors’ appetite for discovery.”

Galleries
London Art Fair welcomed many returning galleries alongside new exhibitors from the UK, Europe, Israel, Japan, Singapore and Canada, who enjoyed strong sales across the Fair and specially curated sections. London Art Fair prides itself in nurturing collecting at all levels, welcoming both established and emerging artists to the Fair.

Confidence in the contemporary art market was evident with collectors acquiring emerging artists, including strong sales of Judith Berry and Jessica Quinn by first-time Art Projects exhibitors Art Mûr and Kittoe Contemporary, reflecting the continued interest in contemporary painting . Meanwhile, four paintings by artist Christopher Hanlon, priced between £5,000-£7,000, were sold to a notable collector by Domobaal.

Drawings by the Spanish artist Guillermo Martin Bermejo sold out at James Freeman Gallery, whilst two of David Theobald’s digital works on display in the Screening Room were purchased from a limited edition series of six.

See also: London Art Fair 2020 Announces Talks and Tours Programme

Another newcomer, Blond Contemporary, sold a selection of abstract works, while TAG Fine Arts sold multiple works including those by the contemporary British street artist Bambi, who explores contemporary female identity using a traditionally male-dominated medium.

Galleries specialising in Modern British art, which has long been a key component of the Fair, also reported healthy sales. Ten enigmatic canvases by Pat Douthwaite were sold for between £7,500- £15,000 each from The Scottish Gallery’s striking presentation of the outsider artist. The Nine British Art sold a cast bronze sculpture and the painting Levant (Cornwall) by Leigh Davis; Crane Kalman Gallery reported strong sales exceeding £100,000; and Beaux Arts sold multiple paintings by David Bomberg, with prices reaching up to £60,000.

Platform
The curated section, Platform, continued to perform well in its second year, with Candida Stevens’ solo presentation of Alice Kettle selling all twelve works by the artist with prices up to £24,000. Oxford Ceramics Gallery sold all four of their wall-hangings by the pre-eminent British weaver Peter Collingwood, created on the artist’s own handbuilt loom, priced at £6,000-£10,000 each. Textile art was also popular across the Fair as a whole, with Raw Editions selling Grayson Perry’s Marriage Flag for £7,000. Candida Stevens said: “The reception of Threading Forms has been phenomenal. The position of textile art within the wider context of the art market has grown exponentially in recent years and I am delighted that this has been reflected in strong sales at the Fair. While each of the galleries participating in Platform has brought something unique, together the section has become more than the sum of its parts. I hope that visitors who were not previously familiar with the medium will be inspired to explore textiles long after they leave the Fair.”

Photography continues to be a popular medium at London Art Fair. Peckham-based newcomers ECAD Gallery sold work by all three photographers on their stand – Olga Karlovac, David Magee and Eurivaldo Bezerra – working exclusively in black and white. Meanwhile, The Contemporary London sold eleven prints by Suzanne Moxhay presenting a timely look at the boundaries between nature and man-made objects.

Visitors’ interest in topical environmental issues was also evidenced by multiple sales of a portrait of climate activist Greta Thunberg from James Freeman Gallery. Elsewhere, the Fair’s annual Photo50 exhibition, which explored the vast pool of talented living female photographers aged over 50, sold six works by artists Sandra Jordan and Kim Shaw. Occupy the Void, curated by gallerist and writer Laura Noble, provided a forum to investigate the cultural ‘space’ inhabited by women, who make up 80 percent of photography students but only 15 percent of the professional industry.

Laura Noble said: “The response to this talented group of female artists, both established and in the early stages of their careers, has been fantastic. In each of their own personal ways, these women have ignited a conversation about how we take up space in all its different guises. I hope that visitors to the fair have gone away with more of an insight into the unique perspectives of these artists and appreciate the action taken together to address this imbalance within the art world and in society more generally.”

Partners
London Art Fair’s Museum Partner for its 2020 edition was Southampton City Art Gallery, who presented stand-out works from their important collection of Modern British and contemporary art by figures including Frank Auerbach, Stanley Spencer and Maggie Hambling, as well as a large Jeremy Deller wall painting installation titled I Love Melancholy.

Clare Mitchell, Curator of Art at Southampton City Art Gallery, said: “It has been a pleasure to share a platform with other galleries and make connections between their artworks and our own. We are very grateful to London Art Fair for affording us the opportunity to share some of our art with the capital and we invite visitors to the fair to see more of our collection at its home in Southampton.”

An extensive talks programme took place throughout the Fair with curators, gallerists, artists and other leading figures within the arts industry joining panels exploring art as therapy, code-based art and multi-authored photography, as well as identifying collecting trends for the home and museum. During the Fair’s popular Thursday Late, artist Samantha Humphreys staged an interactive performance responding to the Screening Room’s look at the boundaries between work and play, creating bespoke woodblock artworks for visitors based on their smartphone displays.

Hackney-based PEER Ambassador and artist Devinya Thomas also hosted a drop-in interactive workshop using analogue photographic processes as part of the Fair’s education programme.

Meanwhile, students from London Art Fair’s official tours partner Sotheby’s Institute of Art provided engaging daily tours around themes including Modern British art, contemporary art, prints and editions, textiles and emerging markets.
Source: Art and Collections 



2/02/2020

Wealthy Milllennials Prefer Luxury Goods Over Traditional Investments


The UK's Telegraph recently ran an interesting article on wealthy millennials and how they are spending and investing their money. Many choosing alternative investments and luxury goods over traditional investments such as stocks and bonds. 

The Telegraph article states "Research has shown that those under 34 are much more likely than other generations to own other ‘alternative’ investments, including art, jewellery and fine wines – and are shunning more traditional assets such as stocks, shares and bonds in the process."

The Telegraph reports
In today’s social media era, where appearance is everything, a share certificate no longer cuts the mustard, explained 32-year-old watch collector Silas Walton. “Young millionaires want to show off their wealth: you can’t wear stocks and shares so they put their money elsewhere,” he said.

He runs A Collected Man, a business selling investment-grade luxury watches, and said a significant number of his clients fall into this ‘millionaire millennial’ bracket.

“The typical buyer is usually a 30-year-old male, based in London, often working in the City or the head of a start-up,” he said. “It won’t be their first watch. They’ll have probably spent a few years following watch blogs and Instagram accounts, and will be looking to invest between £10,000 and £30,000.”

One of his richest clients under the age of 40 has spent in total more than £1m on A-grade time pieces over the past few years.

“Because there’s so much demand from wealthy millennials – particularly for vintage steel sports watches – our older clients are starting to realise that this is where they should be investing too. They’ve actually started copying the younger ones,” Mr Walton said.

What are they buying?
As a result, prices have started to pick up. The sleek design of the steel Patek Philippe Aquanaut 5065 is a favourite with young investors, said Mr Walton. Its price has doubled to around £25,000 over the past 18 months, while the cost of a steel Audemars Piguet Royal Oak 14700 has gone up from £9,000 to £20,000 over the same period. “The most desirable watches can easily sell on Instagram for £50,000 within half an hour.”

Mr Walton was an investor long before he started his horology business. He previously worked in private equity and used to own a number of stocks and shares. “But I sold them all a few years ago,” he explained. “I realised that if I was going to invest, I might as well invest in something I understand.”

It is not just watches that young investors are splashing their cash on. Research has shown that those under 34 are much more likely than other generations to own other ‘alternative’ investments, including art, jewellery and fine wines – and are shunning more traditional assets such as stocks, shares and bonds in the process.

The generational investing gap
For Dr Pete Brooks, a behavioural scientist who works with Barclays bank, much of the reason lies in the financial circumstances this group grew up in. “This is the generation that came of age during the Great Financial Crisis of 2007,” he said. “Seeing the disastrous effects of events like these in your formative years has a lasting impact on what you do with your money and can give people a mistrust of investment companies that lasts a lifetime.”

Barclays found that 25 to 34-year-olds are around three times more likely to invest in fine wines than people aged 35 and above, and twice as likely to invest in art or antiques. Around 10pc of the younger age group had invested in art, while 15pc had invested in wine.

Millennials are getting a taste for wine
Tom Gearing, 32, bought his first investment wine at age 13. “I went to an auction at Christie’s with my Dad and we bought a 12-bottle case of 1959 Domaine de la Romanée-Conti, Romanée-Conti for £16,000 – I was even allowed to hold the paddle,” he recalled. Today, that particular vintage is worth £16,000 a bottle – 1100% more than what he paid 19 years ago.

During university, Mr Gearing started a business selling fine wines to investors which, over time, has morphed into Cult Wines – a wine investment service managing £120m on behalf of its clients.

“We’ve been really surprised by how much interest there is from younger people,” he said. “They tend to invest much more heavily than our older clients: usually around 10 to 15pc of a £1m portfolio.”

Very few of these uber-rich millennials will hold government bonds as their parents or grandparents would have done, Mr Gearing said. “They consider wine to be their safe haven – a low-risk option for balancing their portfolio.” Most, he added, will have money invested in art, jewellery and classic cars too.

Younger investors also tend to be much more engaged with the technical side of things, he said. “They’re so keen to learn. We have a digital platform that allows you to check your portfolio and how the prices of the wines have changed on your phone at any time – they absolutely love it.”

Are these millennial millionaires in it for the money or the passion? According to Mr Gearing, it is a mix. Generally, he said, these young millionaires will already like wine, but at the end of the day, they want their investment to turn a profit.

“Older investors tend to have a bit more wealth so are less fussed if they don’t get a return on their money,” Mr Gearing said. “They just think: ‘Well, if it doesn’t make a return, I can still drink the wine’.”

Investing in a post-crash era
Like Mr Walton, Mr Gearing also comes from a financial background, being the son of an investment banker, and had a near scrape with the City. “I was meant to go and work at an investment firm – but when the financial crash hit my graduate scheme got cut.” That was when he decided to start the wine business.

It was a good time for launching it, Mr Gearing added, as the crisis pushed people away from stocks and shares and towards more esoteric investments.

According to Dr Brooks, this mistrust of financial markets among Britain’s young and wealthy could be here to stay.

“You see throughout history that generations coming of age during an economic crash carry this with them,” he said. “After the Great Depression in America, young people became much less likely to invest in stocks and shares – and this wariness lasted throughout their lifetime.”
Source: The Telegraph