THE GLOBAL ART MARKET MARC ARTHUR KOHN
CONTENTS
• • • • • • • • •
Scope Market Structure Key Players Oligopoly ? Art as an investment Who should buy Art ? How to buy Art ? Recommendations Conclusion
SCOPE
• Vast Market • Focus on Market for Impressionist, Modern and Contemporary Paintings and Sculpture • But same reasoning applies to all types of Collectible Art, Furniture, Vintage cars, Carpets, etc...
THE MARKET - PLAYERS & STRUCTURE
• • • • • • • • •
Artists Collectors Gallerists Dealers Consultants Museums / Trusts / Institutions Auction Houses Art Fairs Internet
MARKET TRENDS
• • • • • •
Growth ($, # of players, new segments) Concentration (in Auction Houses) Major trend: Disappearance of retail Cyclicality and correlation Consolidation (eg. France) Sophistication • More players • More products (Art •
Credit, Packaged deals, Guaranteed Minimum with advances) Internet (On-line auctions, Prices, Virtual Galleries, Brokers, Access to information)
OLIGOPOLY OR FREE MARKET ? • Free market develops into oligopoly • Reasons: Supplier Cost, Buyer Price
Supply Demand
Auction Houses
Client base
ART AS AN INVESTMENT • Basic economics apply: Return vs. Risk • But, not a commodity, prices flexible • Less efficient - i.e. opportunity • Less liquid - i.e. time lag • Diversification benefit • Enjoyable investment • Other benefits (e.g. cultural image)
WHO SHOULD BUY ART? • First and foremost, must enjoy Art • Home owners (decorative purposes) • Patrons (supporting young artists) • Those looking for a new hobby/passion • Status seekers • Private Investors/Collectors • Have a mix of the above profiles • Seek diversification of invested capital • Optimists (every piece is unique)
HOW TO BUY ART ? • By yourself
• Requires extensive research • Cheaper but riskier
• (Authenticity, Condition, Valuation)
• With Professional Advice (for • Added value ?
higher value)
• (Market knowledge, contacts & experience)
• Where to get advice
• Banks • Auction Houses • Independent Consultants, Galleries & Dealers
RECOMMENDATIONS
• Start by discovering your tastes (theoretical knowledge helps a lot) • It’s a passion - invest in what you love ! • Take your time, build collection slowly • As tastes evolve, replace old with new • Diversify, buy young and established • Don’t get carried away - extra cash only • Take an advisor you trust
CONCLUSION • Art is an alternative investment vehicle • Risks and rewards • Must have strategy & basic knowledge • Avoid short-termism and speculation • Good advice has real added value • Patience builds good collections • Can start today ! • Enjoy, enjoy, enjoy