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IN THIS ISSUE … IN FOCUS MEDIA VIEW TOP PERFORMERS |
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investing in art
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Dear Subscribers, This issue of Art Insight sets its sights firmly on the investment strategies that Art Equity has on offer to investors and collectors. The issue looks at the ways around the traditional problems of investing in the art market, particularly the ability to generate income. Information and education as always is the key, we give an update on the recent action both here and abroad, with some cautionary advice for the newcomer. In the Coming Up section of this issue there is an invitation to attend one of the popular Art Equity Education Seminars, held at Barrack Gallery @ Art Equity. Informal and informative, they are a great way to learn about the opportunities that exist in this exciting market. I also extend an open and warm invitation for you to visit Barrack Gallery to view the current Collectors Exhibition that incorporates many remarkable and beautiful works by major Australian artists. The work hanging in the show highlights the possibilities for a 'blue chip' approach to art investing. All artists hung, have significant secondary markets and strong historical trading histories. The collectors show has been hung at the conclusion of Laura Matthew's hugely successful show in Barrack Gallery. The works sold to collectors in all states of Australia, with hundreds of art lovers visiting the exhibition space throughout the two weeks. Matthews' stride towards being a significant painter in the Australian scene was acknowledged by respected landscape painter Jeff Makin, who opened the exhibition and welcomed Matthews into the 'Brotherhood' of Australian landscape painters. He aptly noted that perhaps the 'Brotherhood' is due for a title change! I hope you enjoy this edition and I look forward to welcoming you to Barrack Gallery when you get the opportunity.
Ralph Hobbs |
Ray Crooke, Islander C.1980,
Oil on board, 23 x 15cm (*Available Art collecting, historically, has been the sole domain of the wealthy. Yet collections of significant works by major artists have brought rewards which over time have lured the attention of the broader financial community. Today, art may be viewed as “the tangible lifestyle asset”, and has come to the fore as a viable alternative to traditional asset classes. “Art stands out as an irresistible combination of pleasure and profit in otherwise staid, electronic or paper-strewn portfolios.”¹ The current vogue for art investment is supported by greater accessibility to market information, disclosure of auction results and broader media attention. Together these factors contribute significantly to the alignment of the art market with traditional financial models. As a consequence there are now many more mainstream investors buying and selling art than ever before. Nevertheless, there are distinct variances between investing in art and other traditional assets, such as shares and bonds. Most notable are the aesthetic, social and cultural returns that come from owning art- additional to the potential financial earnings. Studies, such as Higgs and Worthington (2004), have shown that a low correlation exists between returns in the art market and returns in other mainstream markets, strengthening the argument for portfolio diversification by Australian investors into art. |
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John Olsen, Wattles in Broome, Mixed media on paper 100 x 96cm, |
Previously, the most fundamental stumbling block to art investment was the lack of income derived during the ‘hold’ period, which is typically a period of six to ten years. This flaw presented as an opportunity to Art Equity, who recognizing the strong appetite for art rental in the corporate market, established a structured rental product which provides income concurrent with the potential capital appreciation of artwork over time. The Art Equity product is a powerful proposition when investors can earn income of up to 10% from portfolios that include quality artworks by well known Australian artists. ¹ Higgs, Helen and Worthington, Andrew C., Financial returns and price determinants in the Australian art market, 1973-2003, Discussion paper no.184, July 2004, School of Economics and Finance, Queensland University of Technology.
Art Equity is currently showing a Collectors Exhibition at Barrack Gallery until June 30. The show includes major paintings and works on paper by 13 of Australia's most sought after iconic and mid-career artists; Tim Storrier, John Olsen, Jeffrey Makin, Emily Kame Kngwarreye, Kathleen Petyarre, Ray Crooke, Pro Hart, Adam Cullen, Charles Blackman, Willy Tjungurrayi, Robert Dickerson, Jason Benjamin and David Larwill. |
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Adam Cullen, Uncle Charlie 2002, Diptych 75.5 x 55.5 cm each panel (*Available)
Laura Matthews at the opening of her near sell-out show Breathe at Barrack Gallery
Ray Crooke, Tobacco Ovens Flat c1972, Oil on board 61 x 76cm (*Available) |
"So how can a new private investor buying in the primary market determine what pieces might merit 'academic recognition' a decade or two down the track? The reality is, without expert advice, they can't." "Investing in art can provide seriously good returns. The secondary market in Australia is estimated at around $100m annually at auction; include dealers and it would be perhaps $150m." (Excerpt) Fiona Corcoran, Institute of Chartered Accountants Journal Picasso portrait of Dora Maar becomes the world’s second most expensive painting "Just two years after setting the world auction record for his Garçon à la Pipe (sold for USD 93 million on 5 May 2004), Pablo Picasso came close to repeating the feat when a 1941 portrait of his muse, Dora Maar, was knocked down for USD 85 million at Sotheby’s prestigious Impressionist & Modern Art evening sale. " (Excerpt) Artprice.com Australia's place in a widening landscape "Matthews's love of Australia is evident and visceral although her artistic expression of the world remains a palpably English one. Her influences - later to become colleagues when she joined the Slade's teaching staff - included some of Britain's greatest modern figurative painters, William Coldstream, Lucien Freud and Euan Uglow, a tutor who became a great friend." "The latest body of works, collectively titled Breathe, are undeniably Australian seascapes, energetic expressions of our vast, open skies, windswept dunes and turbulent, lonely seas." (Excerpt) Paolo Totaro, The Sydney Morning Herald, May 17, 2006 Click here for full article "The Australian Indigenous Art Commission, to be opened at the [new Musee du Quai Branly, in Paris] on June 20, will showcase work by leading Aboriginal artists including Napurrula, Lena Nyadbi, Paddy Nyunkuny Bedford, Judy Watson, Gulumbu Yunupingu, John Mawurndjul, Tommy Watson and the late Michael Riley." Sunanda Creagh, The Sydney Morning Herald, May 31, 2006
Little yen for Australian artworks "Unless approved by London or New York, Australian artworks have received a poor showing in Japan, until now" Deborah Cameron and Zilia Papp in Tokyo, The Age, May 29, 2006
A brush poet who found his place "[Ray Crooke] doesn't rate a mention in the two most recent short histories of Australian art, by Christopher Allen in 1997 and Andrew Sayers in 2001, but he has never been ignored by the market. In fact, he is one of the all-time best-sellers." By John McDonald,
The Sydney Morning Herald - Spectum
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Jeffrey Makin, Goulburn River Twilight, 1986
Pro Hart, The Yabbie Picnic, 1978, Oil on board, 51 x 60cm, (*Available)
Laura Matthews, Heat, 2006, Oil on paper, 70.5 x 101cm, (*Available) |
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Robert Dickerson, Artist and model (1971), Oil on canvas on board,
David Larwill, Yes, 2005, Etching, 78 x 59cm, (*Available)
Emily Kame Kngwarreye, Wildflower (1994), Acrylic on linen,
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International Art Market US$432,080,560.00 86% CLEARANCE across the 3 major auction houses...
These auctions have been the catalyst for the sharpest rise ever recorded in the Contemporary segment of the art market. The Artprice Global Index is currently showing a 41% increase over the last 12 months. This far exceeds the increase between May 2004 and 2004 of 18% and the 9% rise the following year. Clearly, Contemporary art is not the only segment that is overperforming. Sotheby's sale of Impressionist and Modernist art brought 207.6 million- the highest total for Sotheby's since 1990. Pablo Picasso's Dora Maar au chat sold to an anonymous buyer for USD95,216,000 (AUD124 million) making it the second most expensive painting ever to have sold at auction. Click here to view recent press article. Meanwhile the sale at Christie's also reminiscent of the boom years, achieved the second-highest various-owner evening sale total in company history. A report by the London Stock Exchange on June 1 has revealed that confidence in traditional investment models has slipped to an unforeseen low. A study by Aeon consulting funds found that 70% of UK residents were looking for ways to supplement their pension's payments, with 38% considering investing in art and antiques. Local Art Market Auction activity in the Australian market was relatively quiet during May ahead of the next round of major sales in June and July. Sotheby's Melbourne Sale of Australian and International Art brought $2.284 million with a 73% clearance rate. A new high price for Michael Johnson was achieved for an oil on canvas titled Cobalt. The painting brought $82,800 against an estimate of $45-$55,000. Lawson Menzies auction of Aboriginal art on May 30th totaled $3,062,460 in sales with a 69% clearance rate. The top 10 results from the auction are included below.
Australian aboriginal art will receive groundbreaking international recognition when the new Musee du Quai Branly in the heart of Paris is opened by President Jacque Chirac in late June. The museum, built to showcase the arts and civilizations of Africa, Asia, Oceania and the Americas will feature the largest body of indigenous Australian art ever commissioned. More than 2500 square metres of wall space will feature permanent site specific works by eight Aboriginal artists. They include Ningura Napurrula, Lena Nyadbi, Paddy Nyunkuny Bedford, Judy Watson, Gulumbu Yunupingu, John Mawurndjul, Tommy Watson and the late Michael Riley. This multi-million dollar monument to non-western art is expected to attract more than a million visitors each year.
The June Premium Portfolio is an exceptional collection of four printworks by three of Australia's best renowned and most sought after artists. The mainstay of the portfolio, David Boyd is accompanied by Jason Benjamin and Jeffrey Makin; two highly popular and acclaimed painters and printmakers who are developing solid secondary market demand. The portfolio offers a return of 8% over a period of two years. Given the performance of these artists over recent years, the opportunity for capital appreciation during the rental period, additional to rental income, is strong.
ART EQUITY RENTAL PORTFOLIOS enable you to earn income from the art you own. You purchase an art portfolio starting from around $10,000 which we then rent to the corporate sector. You will earn income of between 6.5% to 10 per cent per annum from your investment as well as the potential capital appreciation of the artwork over time. |
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Pro Hart, Stockman and horses in yard C1974,
Katy Woodroffe, Songs of the Nightingale: Dark Secrets" 2006,
Laura Matthews briefing the Art Equity team on her new collection of seascape paintings ahead of her May 18 exhibition at Barrack Gallery
Willy Tjungurrayi, Tali, 2006 (detail), Acrylic on canvas, 120 x 180cm, (*Available)
Charles Blackman, Portrait of a woman (Barbara), 1957, Ink, watercolour and pastel on paper, (*Available)
Jason Benjamin, I have to take care of you now Etching, 40 x 65cm (*Available)
*Available from Art Equity at the time of publishing
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BARRACK GALLERY @ Art Equity
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