Investing in Art and Photography

A free guide to investing in Art and Photography

Investing in Art and Photography

“… the search for alternatives to the classic forms of investment will ensure that art as an asset class will enjoy an unimagined upswing.” 

Wolfgang Wilke, vice-president, Dresdner Bank’s economics department

The art and photography sector is awash with stories of savvy buyers, who spotted the potential of an artist at an early stage, and are now cashing in on the deal.

And if you can find the next Warhol, good on you.

Here at Paul Fraser Collectibles we advise those investing in art to focus on the more secure end of the market – the works and autographs by the blue chips of the field. These are the areas that have traditionally shown the greatest appreciation and the least volatility, whether you’re talking about old masters, impressionists, or the contemporary stars of today.

Reasons to invest

A growing market: 1m people worldwide now consider themselves serious art collectors, compared with just 10,000 in 1980 – a testament to the increasingly global nature of the art world, with China, India, Russia and the Middle East now particularly prominent. Christie’s art sales saw a rise of 13% in the first six months of 2012 compared with the same period in 2011.

Chinese influx: The world’s rapidly expanding, second largest economy is now the world’s largest market for art and antiques. China’s share of global art sales rose to 30% in 2011, up from 23% in 2010, overtaking the US into first place. As the increasingly prosperous country continues to create more and more millionaires, expect to see prices soar as Chinese buyers repatriate their country’s artwork, from auctions all over the world.

Contemporary art is a boom sector: 87% of the world’s 200 leading art buyers own contemporary pieces, stated the 2012 Artnews 200 report.

Limited quantity: The majority of the leading investment-grade artists are no longer with us. This finite supply coupled with a growing demand ensures that values are rocketing – now is the time to capitalise.

Soaring values:

o   The Mei Moses index revealed that values across all art sectors grew by 10.2% in 2010, and 7.7% pa between 2007 and 2011.

o   Chinese art grew in value by 20.6% in 2011, according to the index.

o   Old master and 19th century artworks were up 5.4% in the first half of 2012.

Historical performance

o   Art

Edvard Munch’s The Scream sold for $119.9m at Sotheby’s in May 2012, raising the art auction world record by 12.6%, previously owned by Picasso’s Nude Green Leaves, and Bust, which sold for $106.4m in 2010.

The Qatari royal family bought Cezanne’s Card Players for $250m in 2011 in a private sale, a world record for a work of art.

Jean-Michel Basquiat’s Warrior sold for £5.6m ($8.7m) in June 2012, 14.87% pa up on the £2.8m ($4.4m) figure it achieved at Sotheby’s London in 2007.

Mark Rothko’s Orange, Red, Yellow smashed the world contemporary art auction record when it sold for $86.9m in May 2012, 19.3% up on Francis Bacon’s Triptych which achieved $86.3m in 2008.

Joan Miró’s Peinture Etoile Bleue realised $36.9m in June 2012, breaking the artist’s record by 22.9%.

Andy Warhol’s 200 One Dollar Bills sold for $43.8m in November 2009. The seller had originally purchased the piece for $385,000 in 1986 – a 23% pa return.

Herge’s original cover artwork for Tintin in America sold for €1.3m ($1.6m) in Paris in June 2012, setting a new world record for cartoon art. The price was 14.4% up on the old record, set by the same work in 2008.

o   Photography

Rhein II by Andreas Gursky made $4.3m in November 2011, setting a new mark for the world’s most valuable photograph. It beat the previous record of $3.89m by 11.3%, set by Cindy Sherman’s Unknown #96 in May 2011.

o   Artists’ autographs

Salvador Dali signed photographs rose in value by 11.88% pa between 2000 and 2012, from £325 ($515) to £1,250 ($1,985), according to the PFC40 Autograph Index.

Picasso signed photographs rose in value from £1,400 ($2,225) to £3,950 ($6,270) between 2000 and 2012, at a rate of 9.03% pa.

Contact us for further information on investing in art and photography on +44 (0) 117 933 9500 or info@paulfrasercollectibles.com

View our art and photography stock for sale here.

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