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Collecting Art – Can Passion Turn a Profit?

With art recently named the top performer among collectable asset classes in Knight Frank’s Luxury Investment Index, THE STAND explores its capital growth potential, whether you’re building your collection at auctions, fairs or galleries.

Bringing both personal satisfaction and capital growth potential, art has long been an enjoyable way to invest. And last year, due to two major sales, art knocked wine from the top investment asset spot. Virginia Blackburn looks at how to begin – or grow – your collection.

Art was recently named as the top investment asset, with the average value of art sold at auction up 21 per cent over the year

Art is everywhere, especially in the summer. Two major annual events in the UK, the Royal Academy’s Summer Exhibition and Masterpiece London, the art fair that encompasses work from antiquity to the present day, offer opportunities to collectors, investors and the plain curious. And art was recently named as the top investment asset of 2017, with the average value of art sold at auction up 21 per cent over the year, according to the Knight Frank Luxury Investment Index.

The huge rise in art sales is partly down to two specific items: the sale of Leonardo da Vinci’s Salvator Mundi at Christie’s for $450m (and what an investment that was – in 1958 it changed hands for £45) and Jean-Michel Basquiat’s Untitled at Sotheby’s, which went for $110.5m, a record for the artist. But it goes without saying that most investors go in at a much lower level.

Valuable, tangible, satisfying
James Nicholls is the managing director and curator of Maddox Gallery, which has three outlets in London and one in Gstaad, Switzerland. An internationally acclaimed expert on investing in art, he points out that it’s indeed an asset class with capital growth potential: “When isolated, the contemporary art segment of the Mei Moses Art Index reveals that contemporary art has delivered a compounded average annual return of 10.85 per cent per annum between 1966 and 2016.”

Nicholls further remarks that when you buy a piece of art, you gain a tangible asset, you have the satisfaction of ownership, it diversifies your portfolio, and it can be a hedge against inflation.

Let the collection begin
There are several ways of collecting, including at auctions and fairs, and in galleries. “There are two types of market: the primary market and the secondary market,” says Augustin Vidor of London’s Stern Pissarro Gallery, which covers 19th-century to contemporary art.

“The primary is made up of living artists selling their works from their studio and the secondary consists of work that has been sold at least once – we only deal in the latter. My advice for anyone starting a collection is to spend all their budget on one work rather than multiples, as they will maintain their value better. Go for a big name – we have a lot by Marc Chagall, for example. International names will not just sell in London, but in New York and Hong Kong, which means that if you want to sell, the market will have more fluidity.” He also cautions to research provenance and condition before buying.

Shows to know
Shows like Masterpiece and the RA’s Summer Exhibition are excellent places to start, given the sheer variety of works being showcased. And big names might not cost as much as you imagine.

Gallery view of the 250th Summer Exhibition, Royal Academy of Arts, London (12 June – 19 August 2018), showing Young Academician by Yinka Shonibare RA. © Royal Academy of Arts. Photography: David Parry

Gallery view of the 250th Summer Exhibition, Royal Academy of Arts, London (12 June – 19 August 2018), showing Young Academician by Yinka Shonibare RA. © Royal Academy of Arts. Photography: David Parry

“Works on paper can be a really interesting and affordable way in to collecting an artist’s work, because, on the whole, they’re not only less expensive, they’re also really illuminating – they show the working of an artist’s mind,” says Philip Hewat-Jaboor, chairman of Masterpiece. “Twenty-two etchings by Matisse will be offered for sale at Masterpiece London at Lyndsey Ingram’s stand. Any one of these would be a great buy and afford the opportunity to buy a beautiful work by a major artist. He was a great draughtsman.”

Over at the Royal Academy, where this year’s show is being curated by Grayson Perry, works from the likes of David Shrigley and Tracey Emin mix with those from relative unknowns. There’s also a colourful etching by Perry himself, Selfie With Political Causes.

Henri Matisse, Figure endormie sur fond moucharabieh, etching with chine collé, 1929. Signed in pencil and numbered 21 from the edition of 25, printed on velin d'Arches paper, 38 x 28 cm. Courtesy Lyndsey Ingram. Masterpiece London 2018, sponsored by Royal Bank of Canada, will take place from 28 June – 4 July at Royal Hospital Chelsea, London.

Henri Matisse, Figure endormie sur fond moucharabieh, etching with chine collé, 1929. Signed in pencil and numbered 21 from the edition of 25, printed on velin d’Arches paper, 38 x 28 cm. Courtesy Lyndsey Ingram. Masterpiece London 2018, sponsored by Royal Bank of Canada, will take place from 28 June – 4 July at Royal Hospital Chelsea, London.

Five to look out for this summer

1. Maddox Gallery: Its own Summer Contemporary exhibition runs across its three London spaces until the end of August, presenting a wide variety of artists.

2. Marlborough Fine Art is showing works by Stephen Hannock until 28 July. He is well known in the US, less so in the UK.

3. Hamiltons Gallery specialises in photography. It’s showing work by acclaimed Japanese photographer Daido Moriyama until 17 August.

4. Stern Pissarro is holding Christo & Jeanne-Claude: A Life of Projects, to tie in with Christo’s The Mastaba, an installation currently floating on the Serpentine Lake, and an exhibition of the artist’s work at the Serpentine Gallery.

5. White Cube is holding a major exhibition, Memory Palace, across both its London spaces from 11 July through to September. There will be over 100 works by 40 artists.

Virginia Blackburn is an art writer who has contributed to How To Spend It magazine and Canvas magazine. She is also the editor of Contemporary Kingdom: The Saudi Art Scene Now. Gallery view of the 250th Summer Exhibition, Royal Academy of Arts, London (12 June –19 August 2018) © Royal Academy of Arts. Photography: David Parry