Is investment in art smart
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South Africa Is investment in art smart? Internationally investors are big on art, while back home South Africans seem to be picking up on the trend with a growing interest in art for investments purposes. Denise Mhlanga / 30 October 2008 00:54 http://www.moneyweb.co.za/archive/is-investment-in-art-smart/ In search for higher returns and need to diversify investment portfolios, South African investors have turned to art. According to Robert Keip, Chief Executive Officer of FNB Investments: “Art is an asset class that can provide significant returns but usually over a long period – the average collector holds on to their art for around 27 years.” The growth in the prices of local art is driven by demand which is due to increasing numbers of people seeing art as an alternate investment. Keip added that prices of collectable art at the South African Antique Dealers command high prices of R2,5m and at auctions some art pieces reach as much as R3,74m. By investing in art, in addition to shares and property, investors can be protected from fluctuations when one asset class drops and may benefit from the increase in another asset class. Keip says internationally, people are investing heavily in art as evidenced the increased number of attendance at, and size of art fairs. South Africa is fast catching up and London art auctions currently show a strong interest in art from China and Africa. “A valuable art collection, like any investment, requires careful research before making decisions,” says Keip. While art investments do not respond to fluctuations in the same was as, say for instance, the share market, whether art is well cushioned against the global economic crisis remains to be seen. What is likely is that demand could drop as cash becomes less readily available for investment. The Jo’burg Art Fair presented by FNB and Artlogic will stage an event for art investors on April 2009 at the Sandton Convention Centre following this year’s successful fair which showcased the best of South African and African contemporary art. Ross Douglas, director of Artlogic says what makes art fairs attractive is their ability to provide collectors with a single point of access to a galleries and artists with investment potential. Asked about the value of art business in South Africa, Douglas says that he would guesstimate it at approximately at R400m a year. He added that art is a growing phenomenon in South Africa and judging from last year’s art fair sales, which yielded between R25m – R30m, art is attracting increased investment.
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Transcript of Is investment in art smart
South Africa
Is investment in art smart?
Internationally investors are big on art, while back home South Africans seem to be picking up on the trend with a growing interest in art for investments purposes. Denise Mhlanga / 30 October 2008 00:54
http://www.moneyweb.co.za/archive/is-investment-in-art-smart/
In search for higher returns and need to diversify investment portfolios, South African investors have turned to art. According to Robert Keip, Chief Executive Officer of FNB Investments: “Art is an asset class that can provide significant returns but usually over a long period – the average collector holds on to their art for around 27 years.”
The growth in the prices of local art is driven by demand which is due to increasing numbers of people seeing art as an alternate investment. Keip added that prices of collectable art at the South African Antique Dealers command high prices of R2,5m and at auctions some art pieces reach as much as R3,74m.
By investing in art, in addition to shares and property, investors can be protected from fluctuations when one asset class drops and may benefit from the increase in another asset class. Keip says internationally, people are investing heavily in art as evidenced the increased number of attendance at, and size of art fairs. South Africa is fast catching up and London art auctions currently show a strong interest in art from China and Africa. “A valuable art collection, like any investment, requires careful research before making decisions,” says Keip.
While art investments do not respond to fluctuations in the same was as, say for instance, the share market, whether art is well cushioned against the global economic crisis remains to be seen. What is likely is that demand could drop as cash becomes less readily available for investment.
The Jo’burg Art Fair presented by FNB and Artlogic will stage an event for art investors on April 2009 at the Sandton Convention Centre following this year’s successful fair which showcased the best of South African and African contemporary art. Ross Douglas, director of Artlogic says what makes art fairs attractive is their ability to provide collectors with a single point of access to a galleries and artists with investment potential.
Asked about the value of art business in South Africa, Douglas says that he would guesstimate it at approximately at R400m a year. He added that art is a growing phenomenon in South Africa and judging from last year’s art fair sales, which yielded between R25m – R30m, art is attracting increased investment.
Buyers of art included individuals from the banking sector, and business men from Johannesburg and Cape Town. Douglas says art lovers usually fit this profile because these individuals are well travelled and have some knowledge on what art to buy.
Although he could not determine the value that the art business contributes to the economy, Douglas said it plays a role in other ways. This includes profiling art brands and artists and promoting South Africa as a
destination for investment art.
“The art fair is not a platform to only buy and sell art, but a place to see contemporary art and get a better understanding of art,” said Douglas. 24 galleries will participate in the Jo’burg Art Fair next year including Ames D Afrique, David Kurt Publishing, Goodman Gallery, Michael Stevenson, Gallery Momo and Erdmann Contemporary.
