Art Investment Tips

“Collecting has always been in my blood.

~Walter Chrysler

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Sotheby’s result in sept 2012 – “we achieved exceptional prices and numerous auction records for Indian & Southeast Asian Art, including the $15 million auction record for a Tibeto-Chinese Sculpture”.

Source : Sotheby

Art can be a tempting investment, with its creative mystique and potential soaring values it is little wonder we see such buoyancy in the market today. Whether your tastes are classic or avant garde art is the tangible asset class of today.

Your Crowns 3 consultant will always recommend holding on to a piece of art for at least 5 – 10 years or longer. It certainly doesn’t work trying to flip it swiftly. You won’t get any respect from galleries and art dealers, if you do so. It’s much better to hold onto it, not only to help refine the artist but also so you can enjoy the master piece.

At Crowns 3 our focus is making your investment choice a tailor made solution. But like any investment the client should be aware of how the investment works and what & where to pay special attention to.

And if the art piece you bought doesn’t fit in your home or office . There are other strategies that enable our clients to gain an income stream from their artworks while still owning them. The option with this would be to lease the artworks to various corporate entities such as banks, law firms, exclusive hotels, even some galleries , museums and other institutions will rent fine art on a rotating basis. The advantage here is that the corporate rental client has access to some of the most sought after and iconic works without having to own them. Furthermore this is regarded as a company expense and so it is tax deductable. in essence this is a win win situation for both parties with you (the owner) gaining an income stream that may go a long way in paying for your initial investment.

*Please make sure that the rental client provides insurance for your art. You must prepare a contract that stipulates the time allotted, the insurance ( very important ), the fee of course and the shipment of your art.

By following the basics this should always see you in good stead.

1. Provenance.

When buying artworks it is important that we track the history and the authenticity. Every work supplied by crowns 3 will be verified with certification and passed ownership.
This is of course paramount. Auction houses such as Christies or Sotheby’s
will not sell without verification certificates.

2. Price

Of course price is key and buying at the right price to begin with, ensures greater capital potential. Crowns 3 use independent valuers to verify artworks. This is also important for insurance of the artworks. Our team will also use key indicators and auction records to determine pricing structure.

As well as providing our clients with recommendations and opportunities it is paramount that our clients have this facility whereby they can view relevant auction records relating to that particular artist and furthermore a clear rationale as to the artworks potential gain.

3. Length of investment

Our advice is to look at the investment as medium to long term.

However, there are no lock in periods.

Mohammed Kamal Syed, head of strategic solutions at Coutts, the private bank recommends holding on to art investments for a minimum of 5 years. “Art collections are built over time and are not recommended for investors interested in quick returns”

(Financial Times Review February 1 2013) 

4. Portfolio Structure

At Crowns 3 it is our aim to provide you with recommendations that enable you as the client to maximise your investment potential. Our advice is always to diversify your portfolio. Whether it be, different artists or swapping genres.

Art is also no different to any investment in that there will be time where certain pieces may slow up in the market. Some artworks may also be susceptible to fashion and fads. However, that being said we primarily focus in looking at Blue Chip artists that have shown positive track record and consistency for many years.

5. Contemporary Art

A contemporary artist should often exhibit, be recognised by his peers, participate in exhibitions abroad and have a piece or two in museums.

Art is showing more than ten years a great return.

Outperforming some very strong market areas.

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Source: Barclays Capital, Morgan Stanley Capital International, Standard & Poor’s, Bloomberg, FTSE International, Beautiful Asset Advisors® LLC