1858 Ltd Art Advisory, the specialist advisors with whom Collyer Bristow work with, is frequently called upon to help clients transact wisely in the art market. In most cases these clients are passionate collectors, however, we do happen upon clients where their motivation may be more investment driven. Record prices, strong returns and increased institutional buying have sparked significant interest in art as an asset class.
The value of a sculpture can change drastically according to whether it was made while the artist was alive or cast posthumously.
To the naked eye the two works of art by Auguste Rodin (1840-1917) here look identical.
However, Le Penseur, cast in 1915, sold in 2011 for US$4 million whereas a similar sculpture, cast in 1930-40, sold for US$360,000 in 2010. For those who do not know what information to look at when buying such a sculpture, the experience can be very costly.
Similarly, 1858 Ltd was recently asked by a private banking client to offer advice on a transaction they were about to make for US$5m for an impressionist painting. After conducting our due diligence and research we found that the work was "attributed to" the artist and not "by". We therefore estimated the true value of the piece to be in the region of US$100,000, thus saving the client a significant sum.
We would like to share some buying tips to help you strike the right balance between aesthetic appreciation and financial savvy.
- Discovering an artwork that appeals to you aesthetically is only one of the first steps in the collecting process. Ask yourself - does this piece represent the best possible work by this artist, within my budget? Researching the artist's body of work will help begin to answer these questions.
- Another factor to consider is an artwork's provenance. As a start, we recommend you check the piece against the available art loss register to ensure there are not any claims for possible restitution or repatriation.
- Condition is another very important element that can greatly impact the value of an artwork. Request independent condition reports before making a purchase. Similarly, when identifying works privately or at auction, an independent examination of the piece by an independent advisor with a UV light, for example, will immediately ascertain whether or not the existing condition report reflects the current state of the work.
- Identify from whom you are buying. Auction houses, art dealers and art advisors are all incentivised differently. Understanding the seller's motivation will assist you in making informed buying decisions.
- Be aware of the costs of buying and holding art, which include transaction costs, framing, insurance, shipping and storage. In certain circumstances, we advise our clients on art finance. This can be a good alternative to selling and means clients can retain possession, avoid selling costs and related taxes while still benefiting from any future appreciation on their art.
- Ensure your investment is protected. We are noticing an increased demand for our market and insurance valuation reporting as well as risk assessments where we review and advise on security, conservation, risk-management and storage conditions.
- Take steps to reduce the chance of valuable items being stolen. One way we assist clients is by applying an invisible DNA coding to all valuables.
- Finally, we always advise clients to buy works they love and will enjoy. Buying with your eyes and not your ears has been a good strategy for many collectors, and with the right guidance you can reap financial and emotional returns for many years to come.
Ultimately, the art market with all its splendour is still an unregulated market riddled with potential pitfalls and must be treated as such. Each transaction requires the utmost due diligence and sound advice from a trusted adviser to ensure that you as a collector are making informed decisions every step of the way.