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Contents
04 Introduction 06 State of the Market 12 Market Outlook 14 Artist Categories 18 The Indigenous Art Market 20 Key Drivers of the Art Market 24 Investment Strategies 26 A Diversified Portfolio 28 Investing with Art Equity 36 Extra Considerations 38 Taking Care of Your Art 40 Art Equity Partners and Philanthropic Initiatives 44 Useful Websites and Publications 46 Glossary of Art and Art Market Terms
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Investing and Collecting Art 2011-12 Guide
Geoff Dyer Injured River, King River
Introduction
2003 (detail), Oil on canvas, 153 x 153cm
Fine art collecting has a long and well documented history. Once considered a recreational activity only for the elite and wealthy, collecting art has become a global phenomenon. Today, collecting art is a recognised investment strategy and fine art is a genuine alternative asset with a proven track record. It is a wellestablished and tangible safe haven with excellent growth potential for well-advised investors and collectors. The internet provides far greater research capabilities and market transparency than ever before. The continuing impact of the global financial crisis (GFC) of 2008-09 has demonstrated the need for a diversified portfolio which includes stock, property, bonds and alternative assets such as fine art. Over the past eight years, Art Equity has built a reputation for innovative structures within the Australian art market. We have advisor relationships with leading financial institutions throughout Australia and Asia. Recognising the need for art to provide an income stream as well as potential capital growth, Art Equity has developed art rental portfolios that can deliver both. Art Equity Rentals is the largest nongovernment corporate rental program operating in Australia. Our corporate clients benefit from the inherent 04
Investing and Collecting Art 2011-12 Guide
cultural and visual value of exceptional fine art on their wall at a fraction of the cost of purchasing the work outright. Art Equity provides art consultancy services to some of Australia and Asia’s top private banking institutions and their clients. We present regular education seminars, host private events and contribute to their publications. Art Equity is proud to sponsor Contempo, the contemporary art program at the Art Gallery Society of New South Wales. We passionately support philanthropic arts-based initiatives such as Bikes for Bush and Walk for Dialysis. Bikes for Bush was established by Art Equity in mid- 2010 and has already made significant health and lifestyle contributions to remote Indigenous communities. This guide is a road map to investing in the art market. It introduces the reader to the rationale of art investing and collecting and advises on strategies for participating at all levels of the market. Whether a novice or seasoned collector, investing in art offers the opportunity to build wealth and be actively involved in our visual culture.
State of the Market The post GFC Australian art market continues to gain confidence, particularly as collectors and investors seek good buying opportunities. The focus on portfolio diversification strategies remains a key for many investors. Global Art Market Surging prices for top end works at auction resulted in spectacular results for 2010 on the world stage. Christies announced its highest annual turnover at US$5.5 billion (53% increase on 2009) including a world record price of US$106.5 million for Picasso’s Nude with Green Leaves. Sotheby’s turnover was up 87% to US$4.3 billion which included the sale of Giacometti’s L’Homme qui Marche I for US$104.1 million. In total, over 900 works sold globally at auction in excess of US$1 million. In 2010 the Mei Moses All Art Index closed up 16.60% on 2009, compared to the 15.06% increase in the S&P500 (based on dividends being re-invested tax-free). The impressionist sector was up 10.97% and the post-war and contemporary sector (traditionally the most volatile) closed up 29.60% on 2009.
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Investing and Collecting Art 2011-12 Guide
Morten Lassen In the Air 2011 (detail), Oil on canvas, 122 x 122cm
State of the Market (cont) Annual Australian Art Auction Sales (Millions and $AU) 1998 – 2010 Annual Australian Art Auction Sales (Millions and $AU) 1997 – 2009
Data source: Source:AASD.com.au AASD.com.au 180M 160M 140M 120M 100M 80M 60M 40M 20M 0 1998
1999
2000
2001
2002
2003
Australian Art Market
Chen Ping Broken Hearted 6 2011 (detail), Oil on canvas, 182.8 x 152.5cm
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Investing and Collecting Art 2011-12 Guide
The Australian art auction market performed strongly in 2010 totaling A$103.26 million- an increase of 17.06% on 2009. The most notable of the 39 new high prices was Sidney Nolan’s First Class Marksman purchased by the Art Gallery of New South Wales for A$5.48 million. New highs for Rick Amor, Tim Storrier, Jeffrey Smart and Phillip Wolfhagen, following on from those set by Adam Cullen, Ben Quilty, Michael Zavros and Jasper Knight in 2009, are heralding the establishment of a new order in the auction room.
2004
2005
2006
2007
2008
2009
2010
The first half of 2011 confirmed this trend with Jeffrey Smart becoming the third living Australian artist to clear the A$1 million mark. His work titled Autobahn in the Black Forest II (1979-80) sold for A$1.02 million through Deutscher and Hackett in May. In all, seven works passed the A$1 million mark in 2010, accounting for 17.11% of total turnover. A further five works sold in excess of A$900,000. In 2010, art market confidence was challenged by a unique political event. The Cooper Review initially recommended in mid-2010 that artworks could no longer be held by self managed superannuation funds (SMSF’s). The recommendations dampened enthusiasm in the
State of the Market (cont) market while the merit of the changes was debated in the political arena. Ultimately, policy was drafted to continue to allow art in SMSF’s, albeit with tighter restrictions. The Indigenous sector struggled to find momentum in 2010, compounded to some degree by negative media coverage. The results at auction were disappointing, with only one new record price over A$100,000. Despite this, the A$8.46 million of Indigenous art sold at auction in 2010 still accounted for 8.70% of annual auction turnover for Australian art. While well down on the 2007 peak of A$23.48 million, this was a relative drop-off of only 4%. Indigenous artists still produce some of the very best artwork in Australia and there remains strong interest from overseas collectors for good works. As always, quality and provenance is of paramount importance in your selection of Indigenous art.
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Investing and Collecting Art 2011-12 Guide
Andrew McIlroy Far from the madding crowd 2011, Oil on linen, 215 x 183cm
Market Outlook The Australian art market provides strong buying opportunities for the astute investor. The decline in financial markets has highlighted the need for a diversified portfolio which includes alternative assets as a counter cyclical measure.The post-GFC Australian art market provides
strong buying opportunities for the astute investor. The decline in financial markets over the past eighteen months has highlighted the role
James Robertson Chewing your ear off 2010, Oil on board, 51 x 76cm
Auction turnover and clearance rates are likely to remain strong over the next year as artworks are priced to sell and auction houses focus on finding fresh stock to achieve higher price points. New mid-career talent with strong primary sales history and market credentials are shaping the direction of the secondary art market and represent the new wave of collectable artists. Meanwhile, blue chip artists with their intrinsic level of value will remain a mainstay for conservative investors. We predict that in the secondary market, Indigenous art will be absorbed into the mainstream Australian art market as opposed to remaining its own distinct sector. Artists with international exposure, particularly in Asia, should be watched, as should those who have developed a distinctive style or oeuvre.
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International art fairs such as Art Basel and the Hong Kong International Art Fair will continue to contribute to the globalisation of the art market. They are increasingly used to speed up the transnational exposure of artists and, along with the internet, have contributed to the evolution of less nationalistic art markets. International emerging markets to watch include India, China and Korea.
The benefits of investing in art include: t t t t
Diversification. Potential for higher returns. Longer-term outlook. Tangible asset protection.
Artist Categories The abundance of art available in today’s market can be daunting to navigate, particularly from an investment point of view. The art market uses three broad categories to define where an artist is positioned in their career.
Emerging Artists The ‘emerging artist’ is one of the most over-used terms in the art market. At Art Equity we refer to an emerging artist as someone in the early stages of their professional art career. The artists in this category are becoming known in the market. They don’t have a significant auction record but are keenly collected, are often the recipients of major art prizes and are well represented by known commercial galleries. The supporting opinion of respected art professionals is important. As a rule, you will need to take a longer term view when investing in emerging artists - you may have the artwork for some time, so buy what you like. As with other speculative investments where the risk is higher, if fundamentals are sound, the potential upside can also be very strong. The price point for this group is generally up to $15,000.
Mid-career
Lorna Ward Napanangka Untitled (Marrapinti) 2010 (detail), acrylic on linen, 122 x 152cm
Mid-career artists have established a solid career and have been working for many years. In most cases they have an auction history with multiple trades and auction records that are tracking positively. These artists have a profile that includes being collected by national and regional galleries and have usually been published in the arts press. Most will have a broadly distributed monologue or book about their work. Most mid-career artists have established a recognisable style or genre for which they have become well known. Strong examples of these works can be an outstanding investment. Artworks by mid-career artists generally sell up to $70,000.
Blue-chip Blue-chip artists have a long secondary market history underpinning their prices. You can track the trading history of individual works over many years. These artists hold national significance and are in all major collections. Many artists in this category are no longer alive. Their legacy to Australian culture is acknowledged. While many of their works will be valued in the hundreds of thousands or millions of dollars, it is important to realise that not all their works may be significant. Quality, condition and provenance are essential. Often a well documented small edition of an iconic image will be worth more than a bad painting or study by the same artist. Blue-chip artists have strong liquidity or tradability however the returns will not necessarily be as spectacular in percentage terms as other categories of artists. Major works by blue chip artists usually sell for more than $100,000.
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Investing and Collecting Art 2011-12 Guide
Artist Categories (cont) Case Studies
Emerging Chen Ping
Mid-Career Geoff Dyer
Blue-Chip John Perceval
(b.1962, China)
(b.1947)
(1923-2000)
t Represented by premier galleries in Sydney, Hobart, Beijing, Shanghai, New York and London
t Represented by the top commercial galleries in Australia for the last 30 years
t Critically acclaimed as one of Australia’s leading modernist painters
t Exhibits at international art fairs including (in 2011) SCOPE Basel, Art Hong Kong, artMRKT San Francisco, NEXT: The Invitational Exhibition of Emerging Art, Chicago and SCOPE New York
t Winner of the Archibald prize (2003) and a further 10-time finalist (including 2011)
t Finalist in the 2005 Glover Prize and recipient of numerous arts grants and residency programmes t Critical reviews and feature articles in general news and arts publications including ABC TV, Asian Art news, Australian Art Collector and Art Monthly t Included in the Tasmania Museum and Art Gallery, White Rabbit Contemporary Chinese Art Collection and Guangdong Museum of Art t Has shown a consistent increase in gallery pricing over the last 5 years 16
Investing and Collecting Art 2011-12 Guide
t 10-time finalist in the Wynne prize and 2-time finalist in the Sulman prize t Held in prominent public collections both domestically and abroad t Has a major publication published about his work and career t Has a modest auction record ($15,075) in line with the light volume of his paintings traded in the secondary market in the last 40 years (only 30 works)
t Winner of coveted awards including the Wynne prize (1960) t Awarded Officer of the Order of Australia (AO) in 1991 t Auction record of $690,000 set in 2010, underpinned by a further 13 sales over $200,000. Perceval has a history of 1,494 lots to be offered since the 1970’s. Importantly, there have been many sales by private treaty in excess of $100,000 t Numerous biographical book publications dedicated to his artistic career t Held in the most important public and private collections in Australia and abroad including The National Gallery of Australia and all state and major regional galleries
The Indigenous Art Market Described by Time magazine’s art critic Robert Hughes as “the last great art movement of the 20th century”, Indigenous art should not be ignored in any portfolio of Australian art.
Ralph Hobbs drawing at Punkilpirri, NT with Nyurapayia Nampitjinpa (Mrs Bennett), Naata Nungurrayi and Esther Giles
Australian Indigenous art has developed into a highly sophisticated art form. The power and beauty of Australia’s most distinctive visual product has undoubtedly captured the world’s attention. Major international cultural institutions have dedicated space to this movement and Indigenous art is featured in significant private collections around the world. With the exceptional success and global interest in the Indigenous market, a myriad of commercial galleries and dealers have emerged – many offering works that are not always of a high standard. Navigating this market can be something of a minefield for the investor and collector who needs to differentiate between collectable, investment quality artwork versus decorative, tourist pieces.
As with other sectors of the market, Indigenous artists are categorised as emerging, mid-career and blue chip with the same principals applying. The proliferation of lesser quality works has, to an extent, affected the value of the market. It is important to be mindful that, like Western artists, not all Indigenous artists are technically gifted enough to become truly great artists. As with any sound investment, conducting appropriate due diligence is essential. Art Equity works directly with Indigenous artists, community art centres and key dealers to ensure a high level of quality control.
*$100,000 can be spent over a couple of years or as a first-up allocation. **“Toe Dipping” Portfolio
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Investing and Collecting Art 2011-12 Guide
Key Drivers of the Art Market In a market governed by visual imagery, aesthetics play a major role in acquiring art. However, there are other key factors you need to consider when assessing an artist or artwork for your collection or investment portfolio. Simply being a ‘good’ artist does not guarantee that they will ‘make’ it. Auction Records
Gallery Representation
The media loves a headline and successful artists at auction provide some sensational press. However, the resale or ’secondary‘ nature of the auction market means that the majority of emerging and many mid-career artists have little or no auction history. So, while auction results can give a good indication of the rise or fall of an artist’s work, they shouldn’t be considered in isolation but read in conjunction with other art market indicators.
Long-term representation with a respected art gallery is a strong indicator of artistic commitment and commercial success. The primary gallery is an excellent reference point for investors to track the selling history of exhibitions and associated curatorial reviews. An artist’s career is tracking well when their solo exhibitions sell well.
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Finding out about artist representation and longevity is easymost galleries will feature works on their websites and can provide extensive biographies and curriculum vitae for the artists they represent.
Wentja Napaltjarri Rockholes west of Kintore 2008 (detail), 271 x 181cm
Key Drivers of the Art Market (cont) Art Journals and Newspaper Editorial Editorial in arts publications and newspapers raises the profile and credibility of an artist. Media attention has recently contributed to the meteoric rise of artists like Sam Leach, Del Kathryn Barton, Jasper Knight and Ben Quilty, and gives recognition to new talent on the rise. Australian Art Collector’s ‘50 Most Collectable’ edition has become a market reference point for emerging artists. This issue comes out at the start of each calendar year.
Artist Publications Reference books and publications about an individual artist or a group of artists are key career milestones. Most mid-career and all blue chip artist’s C.V.’s include monologues profiling their oeuvre, ideally written by recognised art critics.
Søren Solkær Starbird Blue Lagoon, Iceland 2006 (detail), Photograph, Edition of 12, 100 x 150cm
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Sales Is there a genuine demand for an artists work? To the collector this may not be considered essential but from an investment point of view, a positive sales history is important. Sell-out shows, regular commissions and strong gallery representation are proof of sound fundamentals. Even throughout the GFC, many artists continued to sell solidly.
Art Prizes There is a proliferation of art prizes which specialise in an art genre or medium. Often controversial, winning a prize can attract positive but often short-term attention. Major art prizes like the Archibald Prize boosts both the profile and investment potential for winners and finalists alike.
Curatorial Collections Inclusion in national and regional collections as well as prominent corporate and private collections is an important indicator of an artist’s credibility and demand. Usually curated collections look beyond the pure aesthetic attributes of the work. The works are contextualized into the history of art or given a voice in arts future direction. Remember the artwork is ever changing, so keep an eye on what institutions are exhibiting and collecting.
Investment Strategies Today’s investor is presented with numerous options for entering the art market at any level. Whatever your budget, it is important to buy the very best quality you can afford and take a conservative mid to long-term (5-10 year) approach to art investing rather than a buy-today, trade-tomorrow outlook.
The strategies outlined below all have merit and should be selected according to budget and investment objectives. It is important to consider risk level, liquidity, aesthetics and potentially, rental income, from your art investment.
Government did legislate for more stringent requirements for SMSF’s holding such assets. In the case of fine art, this includes such requirements as more thorough documentation on the artwork, storage, insurance and valuations.
Hold, Hang and Enjoy
As with any investment decision you are considering within your SMSF, we highly recommend you speak with your financial and/or legal advisor to ensure that you understand the requirements and current legislation.
The time honoured tradition of collecting and hanging artwork for its combined aesthetic and long term monetary benefits is a well known strategy. Art has the power to enrich lives and the process of collecting can become an addictive and lifelong passion.
Nyurapayia Nampitjinpa Tjalili 2006, Acrylic on canvas, 152 x 183cm
Art and Self-managed Superannuation Funds The preference for long term investment horizons has seen many investors allocate part of their selfmanaged superannuation funds (SMSF’s) into fine art. As with all assets held within a SMSF, fine art is subject to strict guidelines and must comply with the fund’s investment strategy and new government legislation. Although the 2010 Cooper Review’s recommendation to prohibit the inclusion of exotic assets (including fine art) in SMSF’s was rejected by all political parties, the Federal TEXT NEEDS EDITING
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Investing and Collecting Art 2011-12 Guide
Earning Income from Art Rental A growing trend in the corporate sector has seen a move away from art ownership to art rental for offices. This has opened up opportunities for art investors to benefit from this market. Art Equity Rental portfolios are uniquely positioned to help investors create their own portfolio of artworks that can provide an income stream for fixed periods of time, in addition to the potential for capital gain. We advise clients on the selection of artworks to align with both their collecting and investing goals and to maximise the rental opportunities for their portfolio.
A Diversified Portfolio Art investment is not without risk. Like many asset classes, looking at diversification within your art allocation can make considerable difference to your risk profile and liquidity. It also enriches the collecting journey by involving the investor in a range of art genres.
Wentja Napaltjarri, Rockhole, 2011, Etching, 72 x 72cm
Michael Johnson Montpellier Yellow, 2010, (Courtesy Michael Johnson) Relief print, Edition of 35, 80.5 x 94cm
Morten Lassen, Communication, 2011, Oil on canvas, 91 x 91cm
Portfolio 2 This $50,000 portfolio includes a major work by a well credentialed artist, rental yield and the excitement of investing in 2-3 emerging artists.
The examples below illustrate how risk can be diversified at various levels of investment.
$50,000 $50,000 – 2 x Mid-Career / Major Indigenous works (rental portfolio)
Portfolio 1
$15,000 High yield rental portfolio or Major emerging artist work
This $100,000 portfolio spreads risk across various artist categories and mediums and provides rental income from some of the works.
$35,000 Blue Chip / Mid Career (non-rental)
$25,000 Mid-Career work $25,000 Indigenous work $15,000 Work on paper (rental portfolio)
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Portfolio 3 The $12,000 entry level rental portfolio illustrates how an investor can diversify at a lower price point. This is an example of a recent 3 year Art Equity rental portfolio with an 8%p.a. yield.
$30,000 3 – 5 Emerging works – (rental portfolio)
Artist
Artwork
Value
Category
Wentja Napaltjarri
$4,500
Mid-career Indigenous
$5,000 Discretionary allocation
Michael Johnson
$5,000
Blue-chip
Morten Lassen
small oil painting
$3,200
Emerging
Investing with Art Equity Successful investing in today’s art market requires thorough research and principled guidance. For the novice or time-poor investor, navigating the art market alone can be bewildering, and even more so, risky. It is a market that does not conform to the uniform guidelines of most financial markets. This lack of regulation has seen the rise of some rogue dealers and questionable practices. Reputation and trust is at the core of Art Equity’s relationships with artists, suppliers, partners and most importantly, our clients. Combined with our passion and expertise, Art Equity is well positioned to guide the process of acquisition and help build collections of important Australian art for our clients.
Art Equity Offers: Experience and Expertise Art Equity was founded on a unique combination of art expertise and education, structured investments and passion. Our Directors have over twenty years experience in their fields of fine art and finance.
Raj Nanda BEc, MBA CEO and Director Raj Nanda, a Director and CEO of Art Equity, held previous executive positions in major financial groups including UBS, Macquarie Bank, Citibank and AGC. He was a founding executive of the Macquarie Infrastructure Group as well as a number of specialist alternate asset class funds in the Asia Pacific region. Raj has a Bachelor of Economics and an MBA and has gained extensive experience in alternative assets, business development, transaction structuring and funds management. He has been an avid collector of art for over 15 years.
Ralph Hobbs BFA, Dip Ed, MFAD Art Director Art Equity’s Art Director, Ralph Hobbs has a wealth of experience as an artist, art educator and consultant to art institutions. He holds a Bachelor of Fine Art, Diploma of Education and a Masters Degree in Fine Art and Design. His ongoing studies and life-long passion for art has positioned him as an authority in the industry and a sought after speaker at art events. Highly regarded for his eye for exceptional art and an inherent understanding of what makes an artwork both collectable and valuable are skills that Art Equity clients have appreciated for many years.
Alistair Bailey B.A (Hons) Music, PGCE (UK) Executive Director of Sales Executive Director, Alistair Bailey manages Art Equity’s portfolio management team and the Art Equity Premium portfolio. Making the transition from professional sport nearly a decade ago, Alistair has become a highly regarded commentator on the current investment trends for Australian art. He is frequently interviewed for television, newspaper and radio and writes a regular column for AHA Investor Magazine. His extensive knowledge of the historical data as it relates to individual artists and the art market both domestically and internationally is a valuable resource for investors and collectors. 28
Investing and Collecting Art 2011-12 Guide
Investing with Art Equity (cont) Gallery
Dedicated Portfolio Managers
Art Equity is located in Sydney’s CBD with spectacular views of Martin Place. We run a dynamic exhibition program representing some of Australia’s leading contemporary emerging, mid-career and blue chip artists.
Art Equity has dedicated portfolio managers who work with our clients to achieve their investment and collecting goals. All educated professionals in the aesthetics of art and the art market, our portfolio managers monitor auction results and market trends to keep clients informed of opportunities which fit with their portfolio objectives.
Through our relationships with Indigenous communities and leading dealers, we exhibit the very best representatives of the Indigenous art market. Our gallery provides an intimate environment to view works, discuss options for your portfolio or join in an artist lunch, seminar or evening exhibition opening. Art Equity also hosts pop-up exhibitions in Australia and off-shore. Our exhibitions are also circulated electronically to clients around the world.
Wherever you are in the world, our team delivers ongoing management options for your portfolio and regularly introduces you to new works appropriate to your goals.
Extensive Market Relationships Art Equity is extensively networked within the art community across Australia. We have long-established relationships within key art market circles including artists, art dealers, private and commercial collectors, auction houses and industry experts. This gives Art Equity access to the best quality fine art at the best price. Our established relationships with artists and Master Printmakers provide us with exclusive supply rights for major limited print editions. Print editions present an excellent starting point for collecting and investing.
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Katy Woodroffe Pearl Necklace 1 2011 (detail), Acrylic and pigment on paper, 120 x 75cm
Investing with Art Equity (cont) Customised Investment Portfolios
Ongoing Research and Art Market Analysis
The original architects of this form of art investing in Australia, Art Equity clients are offered customised portfolios of artwork which appeal to the corporate sector for rental within offices and foyers.
Art Equity tracks and researches art market movements on a daily basis. Our relationship network within the industry means we are constantly updated with information on artists and artworks.
Clients can earn between 5% and 9% percent per annum in rental income in addition to the potential capital appreciation of their artwork over time.
By nature, art is not always about the bottom line. Art is also driven by curatorial excellence, recognition in the form of art awards and critical acclaim, and the trends and forces associated with any market. Rest assured- if events occur that impact an artist in your collection, your Portfolio Manager will keep you in the loop.
Corporate Art Rental Art Equity is Australia’s leading non-government supplier of rental artwork to the corporate sector. Our corporate clients benefit from renting exceptional fine art at a fraction of the cost of purchasing the work outright. We have a dedicated art rental division to manage our corporate clients and continue to develop this key area of our business.
Secondary Market Sourcing
Nicholas Blowers Torso 2011 (detail), Oil on paper, 108 x 120cm
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We are able to access important works by Australia’s iconic artists, past and present, which become available on the secondary market. A viable alternative to the auction room, our discreet private treaty sourcing and selling is extensively employed by our clients.
Art Equity Premium Art Equity Premium is an exclusive membership service for our most discerning clients. Members benefit from the highest level of customised art advisory and reporting service in addition to pre-release offers, VIP invitations and valuable discounts and benefits from Art Equity and our preferred suppliers. Art Equity Premium offers outstanding value. For a conservative annual fee, members have access to all the market information needed to make informed buying decisions regardless of where the work is purchased. If you’d like to know more about the benefits, special privileges and advice that comes with being an Art Equity Premium member, contact Art Equity.
Investing with Art Equity (cont) Art Education
Bi-monthly Art Market Report
With numerous qualified educators within our team, Art Equity firmly considers the journey of learning as one of the great pleasures of art collecting and a key to successful investing. We explain all facets of the industry, art history and investing in our regular education seminars. These are conducted throughout Australia and in Singapore, India and Hong Kong.
In addition to ongoing communication and updates from our Portfolio Managers, Art Equity clients are also well informed of art market movements in our bi-monthly online newsletter, Art Insight. In its seventh year and with one of the highest readerships in the art market, Art Insight is a must for any collector or investor in this sector. Subscribe to Art Insight www.artequity.com.au/insight
Barbarian Press A division of Art Equity, Barbarian Press works with many of Australia’s great artists and printmakers to create first edition artworks in the market.
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George Gittoes Wilson, South Africa 1994 (detail), Oil on canvas, 170 x 135.5cm
Extra Considerations Buying art usually involves costs and considerations additional to the artwork itself. Art Equity can co-ordinate these important extras on your behalf using our preferred suppliers and passing on the best industry rates.
Adam Nudelman 1947 The Arrival (Princess Pier) Oil on canvas, 112 x 168cm
t Independent certified art valuation t Valuation for artworks donated to institutions under the Australian Government’s Cultural Gifts Program
t t t t t
Independent Art Valuations
suite. The royalty covers works resold during the artist’s lifetime and up to 70 years after their death.
The importance of provenance and authenticity in the art market cannot be underestimated. You need to know that your artwork has a solid, objective history of production and ownership. Art Equity uses independent licensed fine art valuers to provide valuation certificates on all artworks for clients. These are important for the resale of your artwork and are necessary in securing your investment for insurance and superannuation purposes.
Resale Royalty for Visual Artists Act 2009 The Resale Royalty scheme was passed by Federal Government in November 2009 and came into effect on June 9, 2010. The scheme requires that all commercial resale of artworks (after June 9, 2010) must be reported and a 5% royalty is payable on some of those resales. This is regulated by the Copyright Agency Limited (CAL). A royalty is not payable on the first change of hands after June 9, although all resales must be reported in excess of A$1,000. The scheme extends to artworks from countries that also adopt the droit de
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Insurance Resale Royalty Shipping and transport Archival framing Specialist fine art storage
Investors considering transferring artworks out of their superannuation funds should be aware that this will be deemed as the first transaction of ownership. More information can be found at www.resaleroyalty.org.au
The Cultural Gifts Program The Cultural Gifts Program was set up by the Australian Government in 1978 to promote the development of institutional collections of Australian cultural heritage. Under the program, donors of gifts of culturally significant items to public art galleries, museums and libraries receive a tax deduction based on the market value of their donation. Art Equity can assist you with obtaining valuations that comply with the Cultural Gifts Program should you wish to make an art donation. The Cultural Gifts Program is explained in detail on the Department of the Environment, Water, Heritage and the Arts’ website and in their publication Cultural Gifts Program Guide which can be downloaded.
Taking Care of Your Art Storage Facilities
Framing
To ensure optimum condition of your artwork, it is important that they are properly stored in a secure facility. Some art specialist storage companies provide temperature and humidity controlled storage areas.
The right frame not only protects but enhances the visual impact of your artwork.
Art Equity recommends International Art Services (IAS) for art storage needs. IAS offer secure and discreet facilities in Sydney, Melbourne, Brisbane, Canberra and Perth. Their facilities are offered on a short, medium and long-term basis in climate, air-conditioned and nonclimate controlled environments.
Packaging and Transport It is important that your artworks are protected from damage while being transported from one location to another. In some situations, the artworks may need to be crated to avoid damage during transportation. A specialist art transport company is able to provide you with advice on how best to transport your art. IAS offers national and transcontinental fine art transport, storage, packing and handling services.
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Art Equity recommends the use of archival frames. We can work with you to select the right frame to suit your artwork and have a national network of preferred professional framers.
Hanging Careful consideration of where you hang your artworks will help to secure the aesthetic and investment value of the work. Art Equity can advise clients on reputable professional art hangers and hanging systems.
Art Equity Partners and Philanthropic Initiatives Contempo at The Art Gallery of New South Wales Art Equity is proud to sponsor Contempo at the Art Gallery of New South Wales (AGNSW) – a membership category designed specifically for art enthusiasts who enjoy exploring and being part of Sydney’s contemporary art scene. Our sponsorship of Contempo and our close proximity to the AGNSW means we regularly attend Gallery events and guide clients through visiting and permanent exhibitions. Art Equity also hosts Contempo’s Access Art events in our gallery including artist panel discussions, interactive workshops and topical contemporary art talks.
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Contempo membership for Art Equity clients makes great sense with a host of benefits and more than 400 unique events on offer each year. PLUS Art Equity clients save $10 when you join the Gallery and you’ll also receive a free ticket to the current exhibition showing at the AGNSW. CALL (02) 9225 1878 AND QUOTE ‘ART EQUITY’ TO REDEEM. (Art Equity clients only)
Mark Schaller Outback Road Train 2009 (detail), Oil on linen, 137 x 183cm
Art Equity Partners and Philanthropic Initiatives (cont) The Art Equity Bikes for Bush Foundation Art Equity established the Bikes for Bush foundation in 2010 to raise funds to provide BMX bikes to children in remote Indigenous communities. The not-for-profit foundation is a genuine partnership between art, sport and corporate Australia and Indigenous art and has been widely endorsed by leaders from all sectors. In its first year, Bikes for Bush has already made a positive contribution to the health and lifestyles of children in some of Australia’s most remote Indigenous communities. Bikes for Bush depends on the generous donation and sponsorship from corporate Australia and private individuals. If you or your business is interested in supporting the foundation in any way, please contact Art Equity. For more information about Bikes for Bush, visit www.bikesforbush.com.au The Bikes for Bush foundation has been classified by the ATO as a Public Benevolent Institution and is endorsed as a Deductible Gift Recipient. This information is on the public domain and can be viewed at https://abr.gov.au/ (ABN 64 145 677 818).
Bikes for Bush Key Objectives: t Improve health and lifestyles of children in remote Indigenous communities t Reduce the onset of diseases such as obesity, diabetes and kidney disease t Encourage positive community relationships t Skills development including maintenance of bicycles and track building t Improve school attendance rates and behaviour. Children must attend school and display acceptable behaviour to be allowed use of their bikes t Promote Indigenous art and artists within Australia and internationally t Encourage young members of the community to communicate stories of their traditional culture through art
Bikes for Bush Delivery of bikes to Mt Liebig, NT, September 2010
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Useful Websites and Publications www.artequity.com.au/insight
www.iasdas.com.au
Sign up to Art Insight, Art Equity’s free online publication designed to keep collectors and investors in the loop with art market news, artist profiles and exhibition updates.
International Art Services (IAS) is Art Equity’s preferred fine art transport, storage, packing and handling company.
www.artequityrentals.com.au
Parkers Sydney Fine Art Supplies is Art Equity’s preferred supplier of quality art materials, stretching and framing.
Art Equity’s Corporate Art Rental division. Businesses can access Australia’s leading artists without tying up valuable capital and rental payments are typically tax deductible.
www.bikesforbush.com.au
www.parkersartsupplies.com
The Australian Art Market Report – Focuses on Australia and New Zealand and new emerging art markets in Asia and the Middle East.
Art Equity’s philanthropic initiative, Bikes for Bush raises funds to donate bmx bikes to children in remote Indigenous communities.
Art and Australia – Provider of current art market news, reviews and artist profiles for over 40 years.
www.contempo.org.au
Australian Art Collector – The first issue of the year lists the 50 Most Collectable Australian Artists.
Contempo, sponsored by Art Equity, is the membership category of the Art Gallery of New South Wales designed specifically for art enthusiasts who enjoy exploring and being part of Sydney’s contemporary art scene.
www.aasd.com.au Compiled by John Furphy Australian Art Sales Digest records art auction results in Australia and New Zealand from the past 35 years.
www.artprice.com Artprice tracks and analyses auction prices and indices from 2,900 auction houses across the globe.
www.artcollector.net.au Go to Australian Art Collector’s website to sign up for their free newsletter This Art Week for news on artists, auctions and “what’s on” in the local galleries.
www.artasanasset.com This website is home to the Mei Moses Fine Art Index.
www.artwhatson.com.au A meeting place for art-lovers, artists and galleries, artwhatson is Australia’s online guide to what’s happening in Australian art.
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LOOK Magazine – A monthly magazine published by the Art Gallery of NSW. Art Gallery Guide Australia – A monthly publication with listings of art exhibitions Australia-wide.
Glossary of Art & Art Market Terms When speaking with your Art Equity consultant, you are likely to hear some of the following art terms. To help you understand the art vernacular, we have explained some commonly used terms below.
Art Market Confidence Index (by Artprice) Started in early 2009, the index measures players’ confidence in the art market measured live by Artprice.com. The barometer reference point is 0. A positive value reflects an optimistic mood of the market players, pessimism shows below 0. The intraday progression follows up Art Market players’ feedback on current news (stock market tendencies, geopolitical events, results of high profile sales etc).
Acrylic paint Colour pigment mixed with a clear plastic binder similar to PVA glue. It is archival and very versatile, making it a rival to oil paint. It is particularly prevalent in Indigenous painting.
Aquatint A printing technique used to created textures and tonal areas. A metal plate is dusted with a fine resin then placed horizontally inside an aquatint box whereby the dust is distributed and resin particles fall evenly onto the plate, fused by heat being applied to its underside. The parts of the plate where a tone is 46
Investing and Collecting Art 2011-12 Guide
not required are covered with acid resist. Tar or varnish can then be painted onto the plate as the artist creates the image. The plate is then immersed in acid, which bites the exposed surface. The depth of tone depends on the varying lengths of time the plate is in the acid.
Collagraph A form of handmade printmaking using multiple relief plates and textures to create vibrant editioned artworks that often have the visual intensity of an oil painting.
Condition An artwork’s physical condition influences its market value. Condition typically is described as ranging from ‘mint’ - completely undamaged and original - to ‘poor’. For example, a poor-condition print may be creased, torn, water or tapeblemished, trimmed smaller than its original size or otherwise damaged.
Diptych (dip’tik) A painting done in two separate panels. Each part is a complete work in itself, but when presented together they form a larger fully integrated work.
Edition The total number of prints decided by the artist to make from the plate, stone or screen is called the edition.
Etching
Intaglio
A printing process involving the controlled erosion of the surface of a copper, zinc or steel plate, usually by acid. An acid resistant ground such as bitumen or wax is applied to the plate. Then the image is drawn into the ground with a sharp implement to expose the metal below. When finished the plate is immersed in an acid bath - the longer it is left in the acid, the deeper the lines become. A hard ground etching is when the artist draws through a hard coated surface on the plate. A soft ground etching is when the artist draws with a pencil or crayon over a piece of paper which covers a soft coating on the plate. This is followed by the inking and wiping of the plate so that the ink remains only in the etched lines. It is then printed under pressure onto dampened paper leaving around its edges an embossed plate mark or cuvette.
The Italian word meaning incising or engraving describes numerous processes of cutting into a surface, usually metal. It is a printing technique where ink is rubbed into the marks on the plate. The plate is then rolled under pressure through a press, which then prints the ink onto the paper. Intaglio is the opposite of relief printing where the printing part of the plate (or block) is raised and the non-printing part cut away. Intaglio techniques include etching, mezzotint, drypoint, soft-ground etching, hard ground etching, aquatint and engraving.
Medium The term medium has various meanings. Firstly, it’s used to describe the substance that binds the pigment paint.
Genre
A medium can also be something used to change the consistency of the paint.
Art genre pertains to the subject of the artwork. Examples of genres include portrait, landscape, still life and abstract art.
The term medium is also used to describe a category of painting or simply a type of paint, such as oil painting, acrylic or watercolour.
Gouache
Mei Moses Art Index
A heavy opaque watercolour that produces a less wet-appearing and more strongly coloured picture than traditional watercolour paint.
Impasto Paint applied thickly to stand out in relief.
One of the most widely referenced indices in the analysis of financial returns of the art market, the Mei Moses Art index tracks the value of international and marketable artworks using a database of over 15,000 artworks drawn from publicly available auction prices.
Glossary of Art & Art Market Terms (cont) Oil paint
Artists Proof (AP)
Slow drying paint where pigments are mixed with oil (linseed being most traditional). The oil dries with a hard film and the brightness of the colours is protected. Usually oils are opaque and can have a matte, semigloss or glossy finish.
A.P’s rarely exceed 10% of the edition; these prints are intended for the artist’s personal use and are normally identical to the edition prints.
Original Print An image produced from a stone, block or plate that has been worked on directly by the artist. In terms of visual expression, the only difference in using the print medium to other processes, such as paint, ink, sculpture etc, is the ability to produce a number of identical images, with each impression being an original work by the artist.
Primary Art Market The primary market refers to the first sale of art, usually through galleries, dealers or direct from artists.
Proof An impression outside the print edition usually made during the process of working a plate. Types of proofs include:
Bon à tirer (BAT) Prior to a printer beginning the printing of an edition, the artist will mark the proof BAT, or Bon à tirer, (French for ‘good to pull’) as the image that the printer uses as a guide for the edition. It is marked as such on the bottom left below the image and remains the property of the print workshop. 48
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Instate Proofs (I.S) There can be numerous state proofs before the final edition is pulled. Substantial changes (and often major stages) in the development of the image are often made. Sometimes the difference in the image is so great that separate editions are made from instate proofs during the developmental stages of making a plate.
Printer’s Proofs (P.P) Printer’s proofs are given to the printer who collaborated with the artist and/or printed the edition.
Provenance The place of origin or source. When referring to artwork, provenance is a record or proof of authenticity or of past ownership
Secondary Art Market A general term used to describe sources of artworks that have been sold previously. The secondary market participants are predominantly auction houses, galleries, and private dealers. The secondary market often establishes the market value for an artist’s work.
Jasper Knight Replica Endeavour 2011, Enamel, masonite and Perspex on board, 200.5 x 150cm
Glossary of Art & Art Market Terms (cont) Secondary Market Value
Sugar-lift
The value of a print, determined by supply and demand, after all copies have been sold at original issue price. Secondary Market Value also relates to the sale of original artworks through dealers or auction houses.
A printing technique whereby the artist brushes the design onto a plate with a water-based solution of sugar, gum Arabic and gamboge. This is covered with acid resist, then dried and placed in a bath of warm water. As the sugar swells it lifts through the acid resist exposing the design on the raw copper plate. This is aquatinted in the normal way and printed as a positive tone.
Signed and Numbered (s/n) A print bearing an original signature and copy/edition numbers. The first number identifies the particular print number, and the second indicates edition size: 12/30, for instance, identifies print number 12 of a 30-copy edition.
Size of Artworks The sizing protocol for artwork is height first, then width. For example, a painting measuring 90x120cm is 90cm high and 120cm wide. In the case of original prints, both the size of the image and the paper size should be given.
Jeff Makin, Lake St Clair, 2010, Oil on Canvas, 167.5 x 167.5 cm
Watercolour Any paint that uses water as a solvent. Gum Arabic is the medium that carries the pigment in watercolour. When made opaque with white, watercolour is generally called gouache. Most watercolour painting is done on paper – usually white, very thick with high rag content. Art Equity Level 6 Barrack House, 16-20 Barrack Street Sydney NSW 2000 www.artequity.com.au info@artequity.com.au Tel +61 2 9262 6660 Fax +61 2 9262 6665 Cover: James Roberston, Waiting (detail), Oil on canvas board, 51 x 61cm
Inside cover: George Gittoes, Waterbabies (detail), Caribbean – Roatan, 2011, Watercolour on paper, 65.5 x 101.5cm
Neither Art Equity Pty Ltd ABN 88 104 300 950, its subsidiaries or any of its related parties make assurances, warranties or representations that any Information contained herein is accurate, complete or balanced. You should not rely on the information. You should satisfy yourself with its accuracy and completeness through inspections, surveys, inquiries, searches, tests etc. by your own independent consultants and representatives. Forecasts, projections, current and historical art prices, and statements of opinion contained in this document are only statements of presently held beliefs. They may prove inaccurate. Nothing in this document should be taken as a recommendation to acquire art. You should seek your own independent financial and legal advice. This disclaimer does not exclude any statutory rights you may have which cannot be excluded.
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© 2011 Art Equity