“Buy art for pleasure, not for investment,” says Degroof Petercam expert
Global art market data researcher ArtPrice reported that three paintings were sold for over $30m (€26.3m) at Christie’s impressionist and modern last sale on 27 June in London.
Pablo Picasso’s Femme écrivant was sold for $44.4m (€38.9m) while Van Gogh’s painting Le Moissonneur and Max Beckman’s Birds’ Hell were for $30.8m (€27m) and $45.8m (€40.1m) respectively.
But these figures are not easy to read for the layman who adventures into the art investment space. Based in Brussels, which celebrates this year the 50th anniversary of the death of impressionist painter René Magritte, Hubert d’Ursel, head of Art Advisory at Degroof Petercam, advises to “buy art for pleasure and not for investment”.
Art is a very illiquid asset and no one can predict growth in value for an artist or returns that can be achieved through art, he says, adding that art is not a commodity like another and that not all of it is investable.
“Fashion is by far the most important criteria to define value for art, as long as it is available in sufficient quantity to satisfy demand. This is very much true with art departments where supply has dried out in time, weakening at the same time vigour from buyers.
“Antiquities, old masters before 1800, even impressionist art are all departments where shortage or export bans which have driven collectors to contemporary art where supply is unlimited. Indeed contemporary art is now in tremendous demand since year 2000 , with in some cases an enormous increase in value.
“What is remarkable is that prices have only soared for a handful of let’s say 100 post-war artists. You can easily speak of 1,300% increase in value for the last 15 years, which in itself can be considered as a great investment,” d’Ursel explains to InvestmentEurope.
Degroof Petercam’s art advisory chief says that what happens in the market is a very different story. The reason? Artists not making it to the “top 100” in value terms suffer from less marketing across the world.
The push for new names
D’Ursel says the value barrier amounts to $100,000 for one piece of art produced by a contemporary artist. Among well known contemporary artists entering the top category remain obviously Jean-Michel Basquiat, Andy Warhol, Gerhard Richter, Francis Bacon or Yves Klein but not only.
“Quite a larger number of Chinese artists are now in the top category, due to the huge art market in Asia, particularly China. A phenomenon not directly felt by Europeans at the moment, but the truth is that Asians entered the western market since a couple of years with new appetite for our stars like Picasso and Jean-Michel Basquiat , pushing prices even higher,” stresses d’Ursel.
“That situation shows that the art market is getting more mature, less speculative on new names. Blockbuster galleries and prime auctioneers are not taking risks to put new names on the market with big marketing efforts. The result is that this is widening the gap between the top artists and the thousands of less known artists who have little scope in seeing their prices progress,” he pinpoints.
The art expert encourages art confirmed and wannabe collectors to watch around in galleries and art fairs on a very regular basis in order to discover new talents. “New talents are generally not too expensive, lowering your financial risk,” d’Ursel says.
“Buy some good works of renowned artists if you can afford it. Such artist keep their good value in bumpy financial times , as long as they are what we can call established artists in the art market since some decades. Buy with our eyes, not with your ears. Do not be too influenced by fashion, which can be very damageable in the long term,” Degroof Petercam’s head of Art Advisory suggests.
D’Ursel draws a list of criteria that apply to any art investment : fashion, provenance, history, condition, subject matter, rarity, authenticity, legislation, compliance, size, quality.
Art is so volatile and unpredictable that it could appear as an unsafe investment if we look at it only from a yield perspective. Degroof Petercam’s art advisory chief highlights that most art funds that were launched since 2000 have either disappeared or failed to deliver promised returns.
To advise art investments, d’Ursel looks at data in specialised media such as the Art Newspaper, Le Journal des Arts, Art Price and Artnet.
One of his best acquisitions he says has been “an abstract and beautiful 1954 oil painting by Nicolas de Staël” for a 80-year old art collector who wanted a de Staël, but only with the right subject and in perfect condition.
“It took me ten years to find the right one which the collector bought immediately. Every time I met him after the acquisition, he said: “every morning I wake up, I look at the de Staël , it gives me pleasure and emotion.” This was my best reward, passion for art,” concludes d’Ursel.