The value of art

IN­VEST­ING IN CON­TEM­PO­RARY LE­BANESE ARTISTS

Executive Magazine - - Contents - Words by Olga Habre

In­vest­ing in con­tem­po­rary Le­banese artists

car­rie Brad­shaw fa­mously joked that she liked her money right where she could see it—hang­ing in her closet. But what about hang­ing your money on your walls? Art as in­vest­ment is an in­creas­ingly pop­u­lar prac­tice, but one that is quite con­tro­ver­sial. While in­vestors are o en ea­ger to make a quick buck over a few years and some artists are jump­ing at the op­por­tu­nity to cash in on that ea­ger­ness, oth­ers in the art world are ap­palled at the no­tion. Over­all the art mar­ket is do­ing quite well in Le­banon, at least by the looks of this year’s Beirut Art Fair (BAF), Le­banon’s big­gest art event. Held from Septem­ber 2124, BAF saw an av­er­age in­crease in sales of 19 per­cent com­pared to last year, with 88 per­cent of the 51 par­tic­i­pat­ing gal­leries mak­ing sales, in­clud­ing a few who sold more than $500,000 worth of art. Those in the art world, in Le­banon and abroad, un­doubt­edly want peo­ple to buy more art, but in­tent makes a big di er­ence. Ex­perts ad­vise that if you’re go­ing to buy art, you should not just “in­vest” blindly, but look for works of art you gen­uinely en­joy. Art isn’t a bad in­vest­ment, but it is one that should be done for the right rea­sons; if you get lucky you’ll be happy about the nan­cial out­come but if you don’t, at least you’ll like what you see in front of your face ev­ery day.

PUTTING A PRIC­ETAG ON ART

In or­der to talk about in­vest­ment one must talk about

way, the strength of art–its sub­jec­tive na­ture–is also its weak­ness. The beauty of art lies in the eye of its be­holder mak­ing its value sub­ject to each in­di­vid­ual’s pref­er­ences. What we like de­pends on our per­cep­tion, back­ground, and ref­er­ences. Basel Dal­loul, one of the big­gest art col­lec­tors in the re­gion, says, “An art­work is worth what­ever some­one is will­ing to pay for it.” How­ever the ques­tion of what peo­ple are will­ing to pay for art is a very com­plex one. Pas­cal Odille, the artis­tic di­rec­tor of the BAF, says ex­pe­ri­enced gal­lerists will likely know their mar­ket and have an idea of what they are will­ing to pay for speci c types of art, so ini­tial pric­ing for young artists is usu­ally a con­ver­sa­tion be­tween artists and gal­lerists. Saleh Barakat, who has been in the art busi­ness for over 25 years and owns two of Beirut’s most prom­i­nent spa­ces, the Agial and Saleh Barakat gal­leries, says he gen­er­ally starts by pric­ing the work of emerg­ing artists at around $1000 per piece and if a col­lec­tion sells out he in­creases the price at the next ex­hi­bi­tion. Slowly, prices are in­creased un­til they sta­bi­lize. Cur­rently rep­re­sent­ing some of the most cel­e­brated artists in the coun­try, such as Ay­man Baal­baki, Na­bil Na­has, and Ta­greed Dargh­outh, Barakat says he chooses what artists to work with very care­fully and takes his time get­ting to know them and their work. He meets many as­pir­ing artists and looks for those who share his vi­sion and aes­thetic val­ues. Barakat is adamantly against art purely as in­vest­ment, call­ing it a to­tal aber­ra­tion, “An in­vest­ment is you buy land, you plant on it. You buy an apart­ment, you rent it. You put money in the bank, you get in­ter­est. You buy stocks, you get a div­i­dend. But when you buy art­work, you get hap­pi­ness ev­ery day. How do you cal­cu­late that?”

ART MAR­KET GAMES

Ex­perts agree prices are a mar­ket phe­nom­e­non, the sub­ject of sup­ply and de­mand, and very o en high-value art is sim­ply a ma­nip­u­la­tion of the mar­ket, false val­u­a­tion, and spec­u­la­tion by a few key play­ers. The risks of in­vest- ing in art are ex­ten­sive, and the gen­eral con­sen­sus from ex­perts in Le­banon and in­ter­na­tion­ally is that there is no guar­an­tee your in­vest­ment will yield any re­turn. There are nu­mer­ous in­ter­na­tional sto­ries of art deal­ers, auc­tion­eers, gal­lerists, and even the artists them­selves in­volved in schemes to in­crease the value of works. Fake bid­ders are sent to auc­tions to in­crease prices of speci c art­works, which will then be used as a bench­mark by oth­ers in pric­ing and pur­chas­ing other works by that artist. Fake art some­times man­ages to sell, even at the big­gest auc­tions. Dal­loul warns of fakes—though this is less likely to hap­pen with con­tem­po­rary artists t be­cause you can ver­ify pieces with the artists them­selves—stress­ing on the im­por­tance of certi cates of au­then­tic­ity that come di­rectly from artists or their foun­da­tions. Also, when you’re ready to sell an art­work on there’s no guar­an­tee you’ll nd a buyer, and you have to con­sider in­sur­ance and taxes be­fore cal­cu­lat­ing your gains. These are risks that you wouldn’t have to deal with if you were in­vest­ing in, say, eq­ui­ties or mu­tual funds, and the art mar­ket is un­reg­u­lated so buy­ers can’t even com­plain if their in­vest­ment goes wrong. For some­one sim­ply look­ing to make a pro t, with no re­gard for the ac­tual art, the gen­eral con­sen­sus is to look for an­other in­vest­ment. This sit­u­a­tion is tough on the artists too. Art is al­ready a di icult eld to break into and only some artists get their ve min­utes of fame, if that. Be­ing pres­sured by money mat­ters isn’t good for cre­ativ­ity. Ac­cord­ing to Barakat when the prices of art be­come a mar­ket phe­nom­e­non rather some­thing set by art ex­perts, it’s dan­ger­ous for all in­volved. “The de­ci­sion is then out of the hands of the artists, gal­lerists, art crit­ics and art his­to­ri­ans, and goes into the hands of in­vestors, bankers, and those who buy and sell based on when they feel that this artist’s value is not in­creas­ing any­more,” he says, warn­ing that artists are creatives who need nan­cial and moral sup­port, es­pe­cially when they’ve hit hard times.

DO­ING IT RIGHT

In or­der to gain the kind of in­sight that helps dis­cern art­works that are more likely to grow in value, one must be­gin to un­der­stand art, artists, global and lo­cal trends, and at­tend events like fairs, gallery and ex­hi­bi­tion open­ings, talks, and auc­tions. This year the Ecole Sup rieure des A aires ESA launched a pro­gram to help col­lec­tors, would-be col­lec­tors, as well as oth­ers in the eld, learn best prac­tices in col­lab­o­ra­tion with top global art ad­vi­sors Gurr Johns. (See page 76) How­ever the num­ber one piece of ad­vice ev­ery­one gives is to buy some­thing you like look­ing at. Buy­ing a piece by a trendy artist from a big gallery might make you feel that you have an “im­por­tant” piece of art on your wall, but it looks very silly if you can’t have a con­ver­sa­tion about it. Odille, like Barakat, says buy­ing art as an in­vest­ment is com­pletely against his be­liefs. How­ever for those hop­ing to get lucky with an art­work, he sug­gests the fol­low­ing: Con­sider whether the artist is al­ready well­known or just start­ing out, and be­ware of artists that aren’t in it for the long-run, since an artist that’s no longer pro­duc­ing new work will likely be worth less in the fu­ture. An­other fac­tor is the qual­ity of the speci c art­work you are con­sid­er­ing—some­times one ex­cep­tional piece of art will have high-value but the rest of the artist’s work isn’t as good. Dal­loul agrees, “Some­times you have an iso­lated art­work here or there, an artist may have cre­ated a mas­ter­piece that runs the price up be­cause it’s a mas­ter­piece and a few peo­ple re­ally want it, but that doesn’t mean the rest of his work is worth that much.” The gallery the artist works with is a third im­por­tant com­po­nent, as more es­tab­lished gal­leries will have more funds and con­nec­tions to pro­pel their artists for­ward and help them be­come more ex­posed in­ter­na­tion­ally, in­clud­ing get­ting them solo shows and ex­hi­bi­tions at re­spected in­sti­tu­tions and pub­lic spa­ces. Odille also says rar­ity is a fac­tor, as the works of less-proli c artists may be worth more some­times. Yet even if an artist meets all the right cri­te­ria and seems like a sure thing, noth­ing is cer­tain. Some artists make it big and then dis­ap­pear for var­i­ous rea­sons, which drops the value of their art. Though Odille says there is no for­mula, buy­ers are more likely to get lucky if they in­vest a lot of money in many artists with the hope that one of them hits it big. His gen­eral ad­vice for would-be art in­vestors is to se­lect a few trusted and es­tab­lished gal­leries

and look at a hand­ful of their younger artists, whose prices would still be on the lower end. He sug­gests work­ing with gal­leries that have a lot of vis­i­bil­ity and par­tic­i­pate in in­ter­na­tional fairs, giv­ing their artists ex­po­sure all over the world, not just in Le­banon. He also warns against buy­ing di­rectly from artists as this jeop­ar­dizes the role of gal­leries: “Gal­leries pro­tect artists, and the day a gallery closes be­cause no one is buy­ing from them any­more, who’s go­ing to give vis­i­bil­ity to artists? Older artists might be ok for a short time but they will never sur­vive. Where do they nd new clients and how will they work with in­sti­tu­tions?” Ex­perts also warn against buy­ing at auc­tions. If you’re go­ing to an auc­tion you have just one or maybe a few pieces by an artist, which may be un­wanted works that never sold–but go­ing to a gallery or show where sev­eral works are on dis­play gives you more op­tions to choose what you re­ally like, ex­plains Odille. To in­vestors, the gen­eral ad­vice is also to not spend too much. That means, ac­cord­ing to Odille, around 3 per­cent of your her­itage value. Dal­loul says the sweet spot is less than $10,000.

COL­LECT, DON’T IN­VEST

Ac­cord­ing to the ex­perts, the prac­ti­cal side of in­vest­ment in art should be sec­ondary to buy­ing art you love. Choose pieces, whether by fa­mous names or com­plete un­knowns, be­cause they give you joy, they echo. Ul­ti­mately, be­come a col­lec­tor of art rather than an in­vestor. “See what you like and what draws you in, what­ever grabs you by the heart or soul, what­ever speaks to you,” says Dal­loul, adding you should buy things you want to live with. “Typ­i­cally what I tell peo­ple— and this how I started when I was younger—is to buy a piece of art that you ac­tu­ally love. That will get you started,” he ex­plains. The busi­ness­man’s fam­ily has amassed around 4,000 pieces of art from the Arab World—The Ramzi and Saeda Dal­loul Art Foun­da­tion is the largest col­lec­tion of its kind in the world. His love of art was in­stilled in him by his late mother, who was a big art lover and con­stantly took him to mu­se­ums as a child. His fa­ther be­gan the col­lec­tion around 40 years ago, so he grew up around artists. To­day he says most of his friends are artists too. Only about 10 per­cent of their col­lec­tion is on dis­play (the rest, in stor­age) and Dal­loul him­self re­ar­ranges the pieces a cou­ple of times a year. He knows, by heart, ev­ery piece that hangs on dis­play in their res­i­den­tial build­ing in Beirut and o ers ex­ten­sive tours of the pri­vate space, giv­ing de­tailed ac­counts of the art­works and artists, telling sto­ries about them and their var­i­ous pe­ri­ods, as well as the speci c works, their themes, and the ma­te­ri­als and tech­niques that were used to pro­duce them. He o en hosts par­ties in the space, and per­son­ally guides school and uni­ver­sity stu­dents through the dis­played col­lec­tion. In terms of who to buy Dal­loul says, “There is a bunch of re­ally good, young tal­ent out there. Go buy their art and buy some­thing you love and can af­ford. Don’t worry about the in­vest­ment value.”

WHAT’S HOT?

Re­luc­tantly, the ex­perts drop a few names when pressed to di­vulge who the cur­rent hot artists are. Al­most unan­i­mously, Ay­man Baal­baki is con­sid­ered one of Le­banon’s most tal­ented, but his pieces can be worth up to half a mil­lion dol­lars. An­other pop­u­lar artist is Na­bil Na­has, whose work also of­ten goes for six fig­ures. Sev­eral of them men­tioned Ta­greed Dargh­outh, and the young Guiragos­sian broth­ers Paul and Marc, as well as Mo­hamad Said Baal­baki, Ous­sama Baal­baki, Chris­tine Ket­taneh, and oth­ers. Ab­dul Rah­man Katanani, a Pales­tinian refugee re­sid­ing in Le­banon, is also on the list of ones to watch. “For such a small coun­try there is such a wide range of good qual­ity artists,” says Odille. In­vest­ing in art is a gam­ble but buy­ing art for rea­sons be­yond in­vest­ment comes with beau­ti­ful ben­e­fits. While you wait and hope for its value to grow, there is a mas­ter­piece hang­ing be­fore your eyes. Vis­i­tors may be im­pressed by your choice and con­ver­sa­tions will be sparked. By all means buy art, but be­come a true col­lec­tor rather than call it an in­vest­ment.

Ay­man Baal­baki

Ta­greed Dargh­outh

Chaouki Chamoun

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