The World Of Art Hopes For A Tragedy
The sales in the luxury high end art market have been plummeting at an alarming rate as the demands from Asia are rising steadily but still unable to recompense the hasty drop in activity in the Western market.
A good number of the clients of the reputed auction houses are multi-millionaires or even billionaires and have immense financial power at their disposal, affording them the ability to select and bring in exactly those pieces to the market that they want.
Founder and Chief Executive of The Fine Art Group (an art consulting and investment firm), Philip Hoffman mentions that it is due to the turbulence and vulnerability of the current economic scenario that most of the big players are not confident enough to release any of their prized possessions on the block.
He further mentions that it is only in the case of a major unfortunate circumstance like death, divorce or bankruptcy that would call for a forced sale. It is the impending tragedy of some that might bring a relief to the dignitaries of this dynamic market. He further hinted in his statement that the month of November could actually see some estates of interest on the proverbial block.
An industry veteran and former Deputy CEO of Christie’s Europe, Hoffman says with conviction that there is a good number of buyers who are on the edge of their seats all ready to grab some big names in art assets with a sizable amount of cash just sitting in their accounts. There in fact is a great amount of interest in looking for just the right kind of work for their portfolio.
Back from his recent trip to China Hoffman also talked about the resilient interest that the Chinese investors have been showing in acquiring prized possessions from the Western Art Market. It is as per a new trend among the Chinese investors that the company has in fact redirected itself towards a new line of business. The Chinese investors, according to Hoffman are looking for credit to be arranged and intend to borrow money against art.
To possess a leverage in this market will cause an entirely new set up to thrive in the art market and there is a good chance that the market would see an unprecedented growth in the coming five years says Hoffman.
However, it is not only the Chinese who are moving in on this market; the post-Brexit trauma to the pound has motivated and channeled a barrage of market players from the Middle East and America to move in and show interest. The recent trends indicate a favorable scenario for any international work of art like Impressionism or International Contemporary that is marked in sterling.
When talking about those players in the market who are a few zeros short of the players in the big league and exploring their possibility of stepping onto a higher rung on the ladder, Hoffman suggests a look at the works by British Artists like Bridget Riley or Frank Auerbach. He mentions that a smaller work of art by Riley may be marked at something like $50,000, which maybe a benchmark amount to invest in international art. Going below this number can only make it a huge challenge for the investor and consultant to look for a winner from within a barrage of international artists’ pool.
One of lessons that he learnt the hard way and passes on to the novices in the field is when Hoffman bought a piece in 2008 for $40,000 and sold it at a satisfying figure of $100,000 after a gap of two years. It was, however unsettling to see the same piece go at an auction in 2012 for a whopping $2 million.