In our first blog recapping the Art Business Today talk from the London Art Fair 2018, we focused on digital disruptors in art. In part two of our coverage, we’ll focus on fine art collector trends. As a reminder, the talk consisted of 4 speakers, one of which was the host and chair of the hour-long discussion.
Georgina Adam – Art Market Editor at the Art Newspaper and Art Market Contributor at Financial Times
Anna Beady – Deputy Art Market Editor at the Art Newspaper
Jeffrey Boloten – Course Leader of Art & Business at Sotheby’s Institute of Art
Peter Osborne – Gallerist at Osborne Samuel
Was the Leonardo da Vinci $450m sale a one off or is it a game changer in terms of fine art collector trends?
Peter: There is no way of predicting what a price is going to be or what it might become. It all depends on who’s in the room, who’s in the mood, and who wants to be known as the purchaser of a world record price. I call it ‘trophyism’, which indicates acquiring something that says something about you, for example the Louvre in Abu Dhabi making a statement displaying Salvador Mundi.
Anna: It was a total one off and the marketing of these types of works is incredibly important. I wouldn’t be surprised if a work sells for $1 billion; these people will buy a super yacht for the same money without even thinking about it.
Are fine art collector trends pointing to collectors having less respect for the market than they used to?
Anna: Collectors are now more self-made, coming from finance and tech backgrounds as opposed to inherited wealth, which has always been the tradition before. They usually don’t have parents who have always used one auction house before to sway their views. They also tend to find places to buy online and on social media, being more savvy with their choices.
Peter: Japanese people in the 80’s used to trophy hunt. I actually used to be asked to raise the price of my artworks so that it sounded more impressive, so they can show it off based upon the big numbers. Japan also brought in a tax on real estate, so art purchasing could be used for tax avoidance reasons. I have a friend in India who keeps his collection in racks at the back of his house in a store room; his collection is certainly not there to be enjoyed.
Has investment in art today become more important?
Jeffery: There are disruptors in the market. People are always going to be asking themselves the question, is this a worthwhile investment? Whether you’ve bought it for profitable reasons or not, somewhere in your brain you want to make sure you’re not being ripped off, serving to validate your taste.
Peter: Don’t believe for a second that anything but the very top end of the contemporary art market is a worthwhile investment. The strike rate is tiny for low or middle end art investment. Nobody at this art fair will be looking to make a return on their investment, instead they will be purchasing the art for pleasure, to put on their wall. There are far too many artificial external factors that interfere with the value of a painting for the price to be rationalised.
Anna: When a collector chooses to buy from a gallery, they are buying both the gallery’s eye and their marketing skills.
Peter: Once a year I have a meeting with my bank manager. Over the last 5 years I have noticed my bank manager being far more willing to lend large sums of money. He said they are really into art and want to lend money against my gallery’s art collection using the top end pieces as collateral. This shows even traditional banks are employing art lending and using it as a source of financing. However, another thing they left out was that they wanted twice as much collateral for the loan and the deeds for my house!