The assets of acquiring art
ASAN economic downturn takes hold, recession begins and interest levels hit an all-time low, people are looking for ways to diversify their investment portfolio. Ultimately, art as an asset class, depending on your investment objectives, offers an opportunity to invest in a commodity with a low correlation to stocks and shares. However, art should be viewed as a long-term prospect with no quick returns and just like all financial investments, there is risk involved.
The value of an artwork depends on market trends and the taste of collectors at the time you buy or sell and this can fluctuate significantly. Art collecting for financial gain must not be the only driving force, it should also be for enjoyment. As a fine art specialist, I want to suggest a few pointers to consider before investing and to bust the myth that the art market is opaque and restricted to those with bottomless bank accounts.
P RIM ARYVS SECONDARY MARKET
Buying art from dealers, gallerists and artists is classed as the primary market. Their fees are not normally disclosed and usually carry a premium. However, the work is immediately available and has, in the case of a dealer, usually been researched, restored or reframed.
The secondary market at auction is far more transparent. While buyer’s premium fees are charged, these are listed by every auction house, ranging from 10 to 30 per cent (plus VAT) on top of the auctioneer’s hammer price. If an artwork is substantially overpriced at auction, it is unlikely to sell. Competitive bidding suggests demand — a good sign for any collector. There are several ways to bid at auction, including online, over the phone with a specialist live in the room or by leaving a commission or maximum bid, which keeps temptation at bay by fixing your budget.
INTHEKNOW
As a picture specialist it is my job to know which artists are in demand, those going from strength to strength and those taking a downturn. By building close relationships with specialists at auction houses and galleries, we gain an understanding of the artists, styles and types of work a collector would like to acquire and match works with suitable buyers.
As your collection builds, your taste will change. We can help advise the best time to buy and sell certain works of art. To expand your knowledge, visit art fairs, auction viewings and art exhibitions, mostly available online. Specialists can guide you on where to start and keep you updated with what’s hot on the market.
FRESH TO THE MARKET
The words“fresh to the market” are utter delight in the art world, meaning the piece has not come up for sale before or for a long time. In March 2021 a work by Ivon Hitchens is coming to auction at Dreweatts. The work has remained in a private collection since it was purchased as a wedding gift direct from the artist in 1957. It is accompanied by letters from the artist to the original buyers and includes a hand-drawn map of how to reach his studio. We expect competitive bidding for this work with its sumptuous colour palette and top“provenance” (information regarding its ownership).
Dreweatts has developed a great reputation for selling private house collections. These have been very successful as they represent top-quality handpicked items alongside solid provenance. This year we sold the collection of architect Sir William Whitfield for over double the pre-sale estimate. The contents of the spectacular Aynhoe Park are to be offered at auction in January 2021 — a chance to own something unique. From contemporary art by Stik to photography by Rankin and John Swannell, statement chandeliers and a fantastical taxidermy “unicorn” transporting you to a magical world, this is something we all need right now.
Francesca Whitham is a fine art specialist and auctioneer at Dreweatts Auctioneers. She has a particular focus on Herts and North London, providing free sale valuations, responding to insurance and probate enquiries and helping buyers build fine art collections. She has a specialist interest in art restitution and attended the collecting and provenance conference held by the Israel Museum. Dreweatts, leading fine art auctioneers, offers more than 40 specialist auctions a year, from jewellery and wine to modern and contemporary art. dreweatts.com, fwhitham@dreweatts.com