Investment Art: A Beginner's Guide

Forget your shares portfolio - the recession-dodging art market is increasingly proving to be the most profitable place for high-stakes investment

Oscar Wilde may have been mistaken when he claimed “all art is quite useless”. A new use for art has been emerging in recent years, and it may be the most pragmatic of all – as a solid investment. In a time when stock markets are sinking, debts are rising and the looming threat of double-dip recession cannot be entirely eliminated, the art market still sporadically dazzles with record-breaking profits. The unique economic buoyancy of art has long caught the eye of not just aesthetes, but also discerning investors.

Art now falls under the category of the "SWAG" asset. The term, coined by analyst Joe Roseman of Investment Week denotes "alternate investments" which manage to defy economic gravity – namely silver, wine, art and gold.

As well as being decidedly sexier than the FTSE 100, the trend of investing in luxury assets makes a lot of economic common sense. SWAGs often outperform other equities in times of economic downturn for several logical reasons. Firstly, they benefit from the uniquely profitable principle of "scarcity economics" (their value is related to their rarity). Secondly, in an unsteady market, people are drawn to stability, and all the SWAG assets are durable – they have a historical precedence of desirability and can be bought and stored almost indefinitely. Lastly, as their returns are not related to the patterns of the stock market, they add a sensible diversity to any portfolio, the literal asset equivalent of not keeping all your eggs in one basket.

So, we’ve all been there - you’ve got a few spare million in the savings account and you can’t decide whether to invest in the Damien Hirst or the Château Lafite. Luckily, help is at hand. The art market’s unique ability to maintain a bubble of prosperity amidst a global recession has given rise to a new type of business – the art investment advisor.

Businesses of this sort were virtually unheard of a decade ago, and yet the demand  for art purely as an investment has seen a proliferation in recent years. As well as increasing numbers of private banks offering advisory services to their clients, specialist companies such as Fine Art Wealth Management and The Art Investor exist to assist buyers on making choices for bespoke portfolios which can maximise returns. Perhaps most significant in this field, however, is The Fine Art Fund. Set up just over a decade ago by Philip Hoffman, this was the first business of its type to invest in art as an asset. Currently, they manage more than $150m of assets and achieved a net annual return of 6.34 per cent over the past eight years.

Hoffman recently told the Sunday Times, “In the old days people invested in bonds, stocks and cash, and now they’re investing in ten different subject headings and art is just one of them ... People don’t look at their gold bars and, in some cases, they treat art in the same way.”

The rise of these businesses is necessary because the unregulated nature of the art market means that it still straddles an awkward line between solid economic sense and a frantic, wild gamble. On one hand, there are plenty of promising statistics: in 2011, the Financial Times reported that the art market made an 11 per cent return to its investors, a frantic outstripping of stock market return. This year, sales have been promising, with impressive prices achieved at Art Basel in June, and there is a wealth of evidence that the top end of the market has been immune to the turbulence underneath it. In fact, over half of the 20 most expensive auction sales of all time have been completed since 2008, indicating an economic buoyancy which overcomes even the recession.

So far, so lucrative. Yet, the mechanics of the art economy are governed by strange, volatile forces which means that it is never a safe bet. Charles Saatchi himself noted “Art is no investment unless you get very, very lucky” in his 2009 book My Name is Charles Saatchi and I am an Artaholic. In many ways the art market is an economist’s worst nightmare. It is wholly speculative and subjective, and therefore constitutionally unpredictable. The valuation of contemporary art, in particular, is based on a collection of changeable and changing opinions. It is constantly affected by external circumstances, and trends are capable of crashing out of fashion just as swiftly as they crashed it. Additionally, it is fundamentally impossible to confirm the value of the market as a whole. Private sales comprise approximately 75 per cent of the total market, and these are almost always undisclosed. “The art market is the most illiquid, opaque market in the world,” explained Jeff Rabin, quoted in The Art Newspaper. Given this, manoeuvring within it is always going to be a guessing game.

Other industries have, too, sprung up in reaction to the demand of fine-art investment, notably the specialist storage port. Investment art is, emphatically, not bought to be hung on the wall. Instead, collectors are increasingly storing their assets in state-of-the-art warehouses. Christies are currently expanding their "Fine Art Storage Service" due to increased demand, and new ports are due to open in Singapore and Luxenbourg, adding to existing onces in Geneva. These large-scale warehouses offer highly regulated storage controls with humidity and light protection as well as extensive on-site security. They also have a notably appeal to the money-minded collector in that they allow the temporary postponement of VAT and customs duty payments.

The implications of this are vast. Not only with regards to the valuation of art, but with an entire overhaul of its purpose. Art bought as an asset and stored, indefinitely in a warehouse, far from the damaging light of day denotes a new mode of art ownership – one where the object d’art is reduced to a purely monetary transaction.

“It’s a depressing thought,” comments Connie Viney, a London-based artist who regularly exhibits at The Vyner Street Gallery, “Just recently there was the news that Sotheby’s have once again broken their auction record by selling a Rothko for £47.3m. By all accounts, it seems that that price will just increase once again next time it’s sold. With sums like that, how can people think of art becoming anything but a get-rich-quick scheme?”

Is this the real status of art in today's world? Elite, out-priced, stored out of site and endlessly circulated in a micro-economy closed off to all but the super-wealthy? "Art for art’s sake" is a 19th century concept. "Art for the people", too, is becoming swiftly outdated. The motto for our times, it seems, is "Art for the 1 per cent".

Auctioneers place bids during the Damien Hirst's Beautiful Inside My Head Forever, at Sotheby's in 2008. (Photo by Daniel Berehulak/Getty Images)

Kamila Kocialkowska is a freelance journalist based in London.

@ms_kamila_k

 

Marc Brenner
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Carey Mulligan is oddly unemotional in Dennis Kelly’s powerful new play, Girls & Boys

If you intend to see Girls & Boys, don’t read this review.

If you intend to see Girls & Boys, then you should do two things. First, come back to this review: it’s a production best seen with no preconceptions. Second: have a child.

Still here? Good, because there is no way to discuss this play without spoiling its big reveal. It opens with Carey Mulligan centre stage, in orange shirt and red trousers, against set designer Es Devlin’s boxy backdrop of purest cyan. It’s a palette favoured by Hollywood posters, because the contrast is so striking. (Van Gogh once used it on a still life of crabs.) Mulligan’s unnamed narrator tells us how she met her husband, who is only ever “he”. Her monologue starts off funny – “Paris? Call that a world city? It’s Leeds with wider streets” – and sexually frank, but it’s also cleverly disconcerting.

She met him in an Easyjet queue and “took an instant dislike to the man”. Why? Because he was obliviously buried in a book – or because of his interaction with two models, who tried to queuejump by feigning sexual interest to stand next to him? (“And he’s just like, well of course… but I get to sleep with one of you, right?”) One of the models snottily tells him that she would never sleep with a Normal like him, and he acknowledges the truth of this. Then he calls them “bitches” for playing with his feelings, makes a chivalrous speech about the transcendence of loving sex, and suggests that sleeping with them would be “necrophilia… wanking into a pretty dress”. The temptation is to cheer – he put those stuck-up cows in their place! – and I wondered if my disquiet was evidence I’ve gone full Millie Tant. (Beware men who think there are some women to whom it’s OK to be sexist.)

But no. The husband is indeed a wrong ‘un. Mulligan’s monologues are interspersed with role-plays against another pure-cyan set; a living room, with details – a sippy cup, a blanket – again picked out in orange. She chides her children, Leanne and Danny, talking to the empty air about their petty squabbles. And then, halfway through the 90-minute running time, comes the punch: “I know they’re not here by the way. My children… I know they’re dead.” My mind went instantly to a routine by Louis CK. “A woman saying yes to a date with a man is literally insane,” the comedian says. “Globally and historically, we’re the number one cause of injury and mayhem to women. If you’re a guy, imagine you could only date a half-bear-half-lion.”

The narrator’s story, of a relationship going sour, is achingly familiar. Her burgeoning career, and growing confidence; the failure of his business, and his consequent loss of status. She asks for a divorce. He tells her: “There will never come a time when you have my kids and I don’t.” One night, he sweet-talks his way past the babysitter and twists a knife into little Danny’s heart, guiding it in with his thumbnail, before stabbing Leanne eight times. (Mulligan marks each wound on her body.) He tries to kill himself.

My friends with kids tell me that giving birth rewired them, leaving them reluctant to watch any drama with children in peril. To me, Mulligan seemed oddly unemotional in recounting these horrors; but perhaps a parent’s imagination would supply all the horror required.

Is it a coincidence that this play had its premiere at the Royal Court, where artistic director Vicky Featherstone has led the theatre world’s response to a reckoning with sexual harassment? Her code of conduct outlines potentially abusive behaviour, from the obvious – “physical force or threat of force, for sexual action” – to the situational: “staring, meaningful glances”. Yet Dennis Kelly’s script, which depicts one poison drop of sexism blossoming into a manifestation of the most extreme masculine rage, shows how difficult such behaviour is to police. When should the narrator have seen the danger? How can women sort the good from the bad?

In an industry convulsed by a feminist reckoning, I was left wondering if a female playwright would have dared to write lines as starkly confrontational as the narrator’s conclusion: “We didn’t create society for men. We created it to stop men.”

Girls & Boys runs until 17 March.

Helen Lewis is deputy editor of the New Statesman. She regularly appears on BBC Radio 4’s Week in Westminster and the News Quiz, and BBC1’s Sunday Politics. 

This article first appeared in the 22 February 2018 issue of the New Statesman, Sunni vs Shia