Mak­ing Art Work

There’s money to be made from own­ing art, says Mr. Troy Sadler, Man­ag­ing Di­rec­tor and Head of In­vest­ment at Art Works Sin­ga­pore

Portfolio - - IN THIS ISSUE - By Paul Wan

En­ter a re­fur­bished shop­house at Nankin Row, China Square Cen­tral, and you will see sev­eral con­tem­po­rary Chi­nese paint­ings lin­ing the stark walls. This is Art Works, the first con­tem­po­rary art in­vest­ment gallery in Sin­ga­pore to of­fer a full suite of end-to-end art in­vest­ment ser­vices.

Mr. Tony Sadler, a former ten­nis pro­fes­sional and art in­vestor for over a decade, man­ages the eight-year-old Sin­ga­pore-based com­pany. He started work­ing as a gallery as­sis­tant in New York City be­fore mov­ing back to Syd­ney in 2000 where he joined Aus­tralia’s lead­ing art bro­ker­age and ul­ti­mately wound up run­ning the trade floor. Since then, he de­vel­oped his ca­reer in Hong Kong and Sin­ga­pore, and spe­cial­izes in Chi­nese con­tem­po­rary art.

Art Works of­fers as­sur­ance and re­li­able in­for­ma­tion to po­ten­tial in­vestors who are keen to en­ter the art in­vest­ment mar­ket. Mr. Sadler ex­plains, “It’s all about ed­u­ca­tion and trust. Art Works does due dili­gence thor­oughly over a long pe­riod of time on each artist we rep­re­sent. There­fore, we will ed­u­cate the po­ten­tial in­vestor on the artists, the mar­ket and our buy-to-lease model.

“Once we have your trust, we’ll find you a piece that suits your in­vest­ment needs. The com­mon ar­eas as with any in­vest­ment are en­try price, re­turn po­ten­tial, and exit time­frame and we will ad­vise the most suit­able piece for your needs.”

Art Works in­vestors have over­come the con­cept that they are buy­ing a piece of art, Mr. Sadler says. “They are in­vest­ing into a tan­gi­ble as­set with a com­pany that man­ages a buy-to-lease model. In­vest­ments are about ROI and cap­i­tal ap­pre­ci­a­tion, not pretty pic­tures,” says Mr. Sadler, him­self an owner of sev­eral art pieces. “It’s how­ever dif­fi­cult not to be se­duced by the beauty of a piece, es­pe­cially when you have a per­sonal re­la­tion­ship with the artists.”

Mr. Sadler re­it­er­ates that Art Works does com­pre­hen­sive due dili­gence on all of the artists they rep­re­sent and will only con­sider es­tab­lished artists of mid-ca­reer, with a rich his­tory and cred­i­bil­ity. This means they have long-term track record in the auc­tion mar­ket, ex­po­sure in in­ter­na­tional ex­hi­bi­tions, rep­re­sen­ta­tions in var­i­ous mar­kets like Europe and the US, plus a strong PR/im­age (third party en­dorse­ment), among other things. “As with any re­la­tion­ship, you have to un­der­stand the essence of an artist be­fore you can fully ap­pre­ci­ate and rep­re­sent them. We spend many hours with our artists, at­tend their ex­hi­bi­tions and fol­low their auc­tion sales closely be­fore ever con­sid­er­ing rec­om­mend­ing them to our in­vest­ment clients.”

“Art and artists es­tab­lish the foun­da­tion of sta­bil­ity in our business model,” Mr. Sadler points out. “Art Works deals with mainly mid­ca­reer con­tem­po­rary Chi­nese artists. The se­lec­tion process of each artist can take up­wards of 12 months while we meet with them in per­son, visit their stu­dio and fol­low the trends at auc­tion and ex­hi­bi­tions of their work.”

Still In ‘In­fancy’ Stage

Art Works fo­cuses on Chi­nese con­tem­po­rary artists, a sec­tor that has seen up to 10 per cent growth over the past 10 years. “We fore­see huge growth within the sec­tor as the world be­comes more ac­cus­tomed to Chi­nese con­tem­po­rary art,” shares Mr. Sadler on

the type of art that in­vestors should con­sider at the mo­ment. “We un­der­stand that the Chi­nese art mar­ket has gone global, that’s why we spe­cial­ize in Chi­nese con­tem­po­rary art.”

Ac­cord­ing to the Art Mar­ket 2018 Re­port pub­lished by Art Basel and UBS, the global art mar­ket reached US$63.7 bil­lion in 2017, a 12 per cent in­crease in sales. The top three mar­kets are the US, China and the UK, ac­count­ing for 83 per cent of to­tal sales by value. In South­east Asia, growth op­por­tu­ni­ties ap­pear to lie in the Art & Fi­nance mar­ket. In 2016, sales in the South­east Asian mar­ket grew 28 per cent.

Mean­while, Chi­nese con­tem­po­rary art has been around for well over a decade now, with ma­jor auc­tion houses hold­ings sales in in­ter­na­tional mar­kets. Although do­mes­tic de­mands out­pace in­ter­na­tional sales, Chi­nese con­tem­po­rary art mar­ket is well­re­garded in­ter­na­tion­ally. A 2009 Art­price.com re­port noted that “in 2002, there was only one Chi­nese artist in the global TOP 100 (ranked by auc­tion rev­enue); to­day there are 34 – com­pared with just 20 Amer­i­can artists”.

A 2013 SCMP re­port re­it­er­ated that “by the mid-2000s, con­tem­po­rary works by Chi­nese artists were break­ing auc­tion sales records,” cit­ing works by Yue Min­jun, to­gether with (cyn­i­cal re­al­ists) Fang Li­jun and Liu Wei, and (pop-po­lit­i­cal artists) Wang Guangyi, Yo Youhan and Li Shan herald­ing “a new global dom­i­nance by Chi­nese art”.

Mr. Sadler clar­i­fies that although the Chi­nese con­tem­po­rary art mar­ket has seen a steady growth over re­cent years, as a global art category it is still in its in­fancy. “The Chi­nese con­tem­po­rary art mar­ket got started around the early ‘90s with the se­condary mar­ket tak­ing off in the early 2000’s. Mean­while, Western con­tem­po­rary art is classed loosely as works from the early 1970’s. There­fore, in di­rect com­par­i­son, the Chi­nese con­tem­po­rary art mar­ket would be con­sid­ered in its in­fancy.

“Art Works fore­sees the emer­gence, de­vel­op­ment and fur­ther growth of, yet un­known Chi­nese con­tem­po­rary artists as well as those cur­rently oc­cu­py­ing the mar­ket place. The po­ten­tial for large scale growth mov­ing for­ward is huge.”

Re­ces­sion-Proof As­set?

Mr. Sadler be­lieves that for the long term, the art in­vest­ment mar­ket in Sin­ga­pore and the re­gion is cer­tainly some­thing to con­sider. “The sta­bil­ity of art value through­out the global fi­nan­cial cri­sis of 2008 proved to the world that as an as­set class art can be re­ces­sion proof. There­fore, di­ver­si­fi­ca­tion of one’s port­fo­lio into the art sec­tor is seen as a shrewd move.”

With sales in the South­east Asian mar­ket grow­ing, there’s plenty of op­por­tu­ni­ties in this re­gion. “The whole of South­east Asia has an in­ter­est in art in­vest­ment. With the back­ing of the Sin­ga­pore gov­ern­ment who has in­vested heav­ily in art fa­cil­i­ties, we have seen a growth in trans­ac­tions done in Sin­ga­pore,” Mr. Sadler com­ments.

“Ad­di­tions of gal­leries and world class FreePort stor­age fa­cil­i­ties (a highly se­cure stor­age vault for high value col­lectibles, pro­vid­ing col­lec­tors with a fa­cil­ity for long term stor­age and trade of their col­lec­tions with­out at­tract­ing cus­toms du­ties or GST) have cre­ated an ex­tremely solid and fer­tile plat­form for in­vestors,” notes Mr. Sadler, ad­ding that there’s also good sup­port for young artists in Sin­ga­pore.

An area that Art Works is plan­ning to de­velop is emerg­ing Sin­ga­pore artists and South­east Asian con­tem­po­rary art. “Another side of our business is the lease business, which is about aes­thet­ics and what matches with of­fices and the brand of their com­pany. So we think bring­ing in Sin­ga­pore artists is great, be­cause the com­pa­nies are con­nect­ing with the lo­cal artist com­mu­nity,” Mr. Sadler adds.

For Art Works, one of the chal­lenges im­pact­ing Asia’s art in­vest­ment mar­ket is ed­u­cat­ing in­vestors (the com­pany has about 90 per cent Sin­ga­pore-based clients at the mo­ment). “Buy­ing a tan­gi­ble as­set which can sus­tain global eco­nomic fluc­tu­a­tions is a shrewd move for any in­vestor. That’s where Art Works come in, with our back­ground we can aid in ed­u­cat­ing in­vestors on which artists have the po­ten­tial for growth and aid­ing in liq­ui­dat­ing the as­set at the right time,” says Mr. Sadler.

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