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THE SECRETS OF MAKING A GOOD INVESTMENT IN ART

From emerging talent to Old Masters, London is a creative hub for art fans looking at new ways to invest. Platinum Resident explores the secrets of investing in art…

Words: Melanie Gerlis

Would-be buyers of art are increasingly looking at works not just for aesthetics, but also as potential investments. While judging art in this way can be a risky prospect, several people over the years have made spectacular financial gains on the art market.

Traditionally, the best way to make the most, as quickly as possible, has been to buy young (and cheap) and sell once your burgeoning young artists hit the high times. The Young British Artists did wonders for the pockets of collectors such as Charles Saatchi and Frank Cohen. In July this year Saatchi sold Tracey Emin’s notorious My Bed, 1998, complete with its empty vodka bottle, condoms and cigarette packets, for £2.2m (he bought the work in 2000 for a reported £150,000).

However, as even the original price for the Emin suggests, works by living, contemporary artists have grown so high that the investment opportunity is shrinking. A signature scribble work — Untitled (Drawings off the wall), 2011 — by the current market-darling, Oscar Murillo sold at Phillips in London for $401,000 last September, against its $30,000 to $40,000 estimate. The Colombian artist was 25 when he painted the work; 27 when it sold.

Investing in art: Oscar Murillo's Untitled sold for $401,000 against a $40,000 estimate

Oscar Murillo’s Untitled (Drawings off the wall) sold for $401,000 against a $40,000 estimate

Such toppy prices, combined with a generally more risk-averse mentality since the most recent economic downturn, has meant that it has been older art rather than the crushingly contemporary that has begun to look like the better investment.

Victoria Siddall, the director of London’s Frieze Masters art fair, says that people ‘shouldn’t be intimidated by time, there is a continuum through the history of art.’ Indeed, the fair was founded in 2012 to tap into collectors who were used to buying contemporary art, but who were beginning to look at older works, partly because of their relatively accessible prices. ‘There are prints by Hogarth available from £2,000 upwards,’ she says.

Post-war Italian and German artists are having their moment in the sun

For those on a smaller budget, another popular area has been works by older artists who have either been overlooked by the market, or simply undervalued. Post-war Italian and German artists are having their moment in the sun (boosted by the ‘Zero: Countdown to Tomorrow, 1950s-60s’ at New York’s Guggenheim museum, 2015), but many feel that the prices of rediscovered artists still have further to go.

This season, the European gallery Robilant + Voena, is dedicating its London space to Paolo Scheggi, an Italian artist who died young in 1971 and has been arguably overlooked in a collecting field dominated by the likes of Lucio Fontana and Enrico Casetellani. Scheggi’s prices have already started to rise—the works in the Robilant + Voena show range from €40,000 to €300,000, while those in the trade say that, at the beginning of 2013, these averaged around €30,000. ‘There is still room for growth,’ reveals Mira Dimitrova, a director at the gallery.

One of the most rapidly growing markets is for ceramics by Picasso. Unlike his paintings, they are relatively cheap

Another area ripe for the taking is that of works by well-known artists – but not necessarily in the mediums for which they are famous. One of the most rapidly growing markets is for ceramics by Picasso. One reason for their popularity is that, unlike Picasso’s paintings, they are relatively cheap, while unmistakably by the Master (Christie’s specialist Keith Gill says that under £10,000 is still the norm).

Many buyers however—particularly those newer to the art scene—are still more attached to the art of their own time. Finding the next rising star is a gamble, but seeking those from emerging countries has proved a profitable pastime. And while Brazil and China have been favoured hunting grounds in recent years (with names to watch for including Ernesto Neto and Cildo in Brazil and Chen Yujun and Liu Di in China), a latest trend is for young African artists.

Finding the next rising star is a gamble, but seeking those from emerging countries has proved a profitable pastime

A new art fair dedicated to the continent, 1:54, launched in London last year and dealers such as London’s Jack Bell have been seeing roaring trade, particularly for artists from the West (he highlights Benin, Ghana, Nigeria and the Ivory Coast). Their politically-engaged works make them exciting to a collecting crowd while, says Bell, the growth of urban areas in many African countries has supported artistic growth.

One of the artists he represents, Aboudia (whose street-art inspired paintings respond to the 2011 civil war in his home country, the Ivory Coast) is particularly popular— with buyers including Mr. Saatchi. Prices for his work have grown from around £3,000 to £20,000, which, says Bell, is ‘still cracking value’.

Aboudia-Studio-Abidjan

African artist Aboudia has become a darling of the international art scene for his urban inspired images of his home country, The Ivory Coast

Whether buying from the highly popular art fairs, galleries or auction houses, would-be collectors have never had so much choice in London, where alongside New York and, increasingly, Hong Kong, most of the art market’s trades are made. The city retains its centuries-old expertise in Old Masters while its international status has made it a melting pot to buy art by living artists from all around the world.

‘London has benefited enormously these past ten years from being geographically positioned between Asia and America, as well as being the place to live for an international community,’ says Alex Branczik, Sotheby’s head of contemporary art in the city.

Indeed, throughout the world, the energy and punch of the art market has rarely been as magnetic. As ever, however, art belongs to a ‘buyer beware’ marketplace, with commissions, mark-ups, taxes and insider deals that are not always transparent. Would-be investors should be aware that, while the visible market seems to be on fire, it is estimated that a good 90% of new art, for example, will not go up in value. Making money is a challenge—but it should be fun trying.

Melanie Gerlis is the art market editor of The Art Newspaper. Her book ‘Art as an Investment? A Survey of Comparative Assets’ is published by Lund Humphries

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