Collectibles as investments
Alternative assets like art or wine could turn out to be good bets in uncertain times, say experts
From fine art to bottles of wine, and limited-edition sneakers to luxury watches, collectibles can be turned into investibles in the post-pandemic world.
But it requires patience, knowledge, experience and an open mind before embarking on such an interesting and potentially profitable journey.
Industry leaders and experts provided these insights on Jan 19 at a China Daily Asia Leadership Roundtable themed “Assessing Alternative Investments in Art and Wine”, held as part of the 14th Asian Financial Forum.
“Amidst times of uncertainties, alternative investments like art or wine stand as relatively wise choices at the moment,” said Andy Hei, founder and director of the art events Fine Art Asia and Ink Asia Hong Kong. “But it takes a very long term in practice.”
Drawing on his yearslong experience as a well-regarded second-generation dealer in classical Chinese furniture, Hei noted that the return of value in art could reach double digits.
But it needs patience. “Basically, it’s time that will tell,” Hei stressed. Robert Sleigh, senior director and managing director of operations at Sotheby’s Hong Kong, is a firm believer that art and wine have more integral roles to play in the post-pandemic era.
Looking ahead, traditional areas of collecting for investment, be it paintings, contemporary art, modern art or impressionist art, “will continue to go quite strong”, Sleigh said.
While investing in collectibles can be a great way to diversify portfolios and explore one’s own interests, it does have its drawbacks.
Adriano Picinati di Torcello, director of advisory and consulting of global art and finance coordinator at Deloitte Luxembourg, reminded investors that one of the risks when it comes to making investment in art and wine is illiquidity.
“If you look at art or collectibles in general, investors have to consider that collectible assets tend to be very illiquid. Also, there are a number of other issues that investors have to look at, such as authenticity and counterfeit,” said Torcello.
“Investing in passive investments such as art and wine should be done with careful consideration and a clear plan,” said Johnny Hon, founder and chairman emeritus of Global Group International Holdings Ltd, which is involved in venture capital investments in an array of businesses.
Sleigh highlighted Scotch whisky, Japanese whisky, China’s Maotai baijiu as markets with significant growth.
Torcello said the power of technology to help reduce investment risks and increase liquidity of collectibles merits great attention. There are also many discussions around fingerprinting, blockchain and tokenization of certain categories of collectible assets, he added.
The rapid development of blockchain and augmented reality technologies can be the next big things to reshape the art space.
“While all of these changes may present opportunities, I would not recommend rushing in to buy art merely as an investment. It is important to discover your passion and what you really enjoy about artworks,” Hon stressed.