ART AS PLACEMENT
May art be considered just as a financial asset like any other, or an impregnable sanctuary reserved for enthusiasts, collectors and historians? Everything indicates, in recent years, that this safe haven has taken an unprecedented scale from a speculative point of view. And while it is true that the organized art market has existed for over 1000 years, we have never had so many exchanges and consumers of works of art worldwide. This can be seen as a first explanation for the growth of collectors and museums. But if investors are turning to art, it is also because regular investments are offering only low fees and money at the bank almost costing your shirt. But the development of the art market at such a level would never have been possible without the Internet and the tools made available to users. First, by making this trade less opaque for the uninitiated, especially thanks to the proliferation of information. So, freeing up trade in the context of a globalized world, paving the way for customers around the world. However, all this should not make us forget that works of art are not goods like any other. They are unique, fragile, not interchangeable, not always mobile for technical or legislative reasons. The seller of the work, on the other hand, is a monopolist and the market in which goods are traded is more vulnerable than others to irrational behavior. Artistic investment funds must take all of these elements into account in order to achieve their objectives and obtain returns that satisfy investors.
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In fact, experienced since the 1970s, this type of fund sometimes has less brilliant designs because managers have not paid enough attention to the characteristics presented by works of art. They have not always integrated the human and subjective dimension of works of art, which allows investors to combine investment and aesthetic pleasure. As these works carried out collectively can have a strong identity, and investment funds have all the advantages of multiplying services to the holders. How to invite them to events, rent works or edit catalogs, for example. If certain services provided are charges, others, such as rent, can be a source of income. In fact, a good fund manager should pay special attention to controlling structural costs. Because, if all the studies show that quality works see their value increase over time, however, they must be stored, insured, sometimes moved. Diversifying your fund well by purchasing goods from various segments of the art market is also a prudent way to manage your portfolio. Because the effects of fashion are also present in art and tastes vary from country to country. It also remains to define a specific valuation method for this type of complex fund that must obtain recognition from financial institutions. All of these economic aspects must not make us forget the scope of art in our society, the satisfaction and the many advantages of coming together to buy art. Alessandro BONFIGLIOLI Art market professor at the Paul Hankar Institute in Brussels. Founding Partner in the OWL Group (Luxembourg), which manages funds and supports numerous clients in the administration and structuring of their wealth.
