Become a fine art investor We pride ourselves with a team of investment specialists
ART INVESTMENT
Deal Summary Return on investment - year one
25% projected
Rental Income
4-8% fixed
Art market value
$66 Billion
Hold Period
Warrington Ford Arts is not regulated by the Financial Conduct Authority and is not authorised to offer advice on investment, whether regulated or unregulated. If you are making investment decisions you should seek advice from an independent financial advisor or other regulated professional. Investments in art can go down as well as up. The information in this document should not be relied on for investment decisions or for any other purpose whatsoever. Warrington Ford Arts (together with its affiliates, officers, directors and employees) gives no guarantee, warranty or representation as to the accuracy, completeness, suitability or content of the information provided in this document and shall not be liable or responsible for any errors, omissions or inaccuracies herein.
3 Years
About us With over three generations of experience in the evergrowing Fine Art market and as one of the fastest growing Fine Art investment companies in UK. Experience and past performance speaks volumes in this financial climate our systems and strategies have consistently outperformed many areas of traditional stocks and shares, bonds and ISAs. For over a decade savvy investors have been using us to safe guard their wealth to ensure they diversify into the low-risk, secure and a tangible concept, which has been performing for people for hundreds of years. We pride ourselves with a team of investment specialist who are at hand to guide you on how the market works, how to benefit from a highly responsive market, and to open your eyes to the tips and tricks that really get you ahead in such a lucrative asset class. Our passion for the Arts drives our motivation to excel and get the best position and returns for our Private, Retail or simply Art Enthusiast clients. WF Associates is
micromanaging the portfolio to maximise return on investment, to ensure client satisfaction and deliverance on forecasts. There are no management fees. The investor receives a fixed rental income on selected pieces during the hold period and usually the investor recaptures 100% of equity invested before profit participation by the manager. WF Associates believe quality and performance is paramount, it determines the work we source and the service we provide. Our belief in passion and mere appreciation should always dictate the decision making process behind any individuals purchase of a specific piece. Throughout history people have been known to make a fortune acquiring art, here at WF Associates we endeavour to replicate the same success for all our clients as well as educating each individual to simultaneously develop a non-sentimental connection with anything they acquire investment-wise but rather more a strategic approach. WF Associates maintain a
strict preferred artist list, this means we select prime pieces from prominent artist’s past and present, and only the best are brought forward for consideration to our clients. This is WF Associate’s method, which has proven successful for over a decade, we are proud in our maintenance of exceptionally high ‘standard’ of portfolios under management. Where the value of pieces may differ between collections will be due to the individuality of originals or limited print runs. We have amassed a strong buying power with an extensive client base so quality is rest assured. We are able to stock purchase entire runs of new prints from renowned artists or clear residue issue with historic ones. Largely focusing on active/living artist’s drives capital growth, this enables specific variables to be in play whilst we negotiate direct from the source and save you money from extortionate entry prices in the open market.
THE DIFFERENCE BETWEEN A SUCCESSFUL PERSON AND OTHERS IS NOT A LACK OF STRENGTH, NOT A LACK OF KNOWLEDGE, BUT RATHER A LACK OF WILL.
How it works CONTACT A portfolio advisor will work with you to gain an understanding of your objectives and investment philosophy.
RECOMMENDATION Your designated advisor will guide you on your latest offerings based on your risk levels and investment sentiments.
INVESTMENT Decide on investment range. Average investment is £10,000; new investors can invest from as little as £3,000.
TRADE A trade is made; contractual documents are provided all of the agreed trade details. This document is to be signed and returned.
TRANSFER FUNDS Transfer of funds via cheque or BACS within the agreed time frame. We acknowledge a sale receipt upon receiving funds. A certificate of ownership will also be provided.
That’s it...Simple Insurance and transportation fees are inclusive within the trade. You will receive an annual valuation of your portfolio from your advisor, evaluating performance, strategic plans moving forward. All future prospects will be brought forth to you by your advisor
Seeing a loved one achieve an Important milestone. Moving into a dream home. Planning for the golden years, whatever your future, you can make it happen with WF Associates.
Tracking sales Our starting point is the Mei Moses World All Art Index. Widely respected as the best overview of performance for all sectors of the fine art market, it is the brainchild of Jianping Mei and Michael Moses.
It tracks repeat sales of works of art to provide ‘then and now’ price comparisons. Currently the index has more than 34,000 price pairs. Taking 1987 as a start point, by 2013 it had shown a 401% increase. In comparison, the FTSE100 rose by 359% over the same period. Art has to be viewed as a mid to long-term investment. There have been years when the market has moved negatively. Most recently the ‘credit crunch’ of 2007/2008 caused a 22% drop in the index (recovered by 2010). The collapse of the Japanese Yen in the early 1990s resulted a 30% drop that took ten years to recover. Time for some optimism in the ‘90s the art market had far fewer players of whom the
Japanese were a large proportion. Today, the market is far more global and consensus opinion is that problems in a single economy would not have such a deep or long-lasting effect. One measure of the depth of today’s market, much expanded by BRIC and other emerging economies, is the number of registered bidders at major auction houses. Christie’s reports that buyer registrations for art sales are up 53% compared to ten years earlier. Another way of judging the popularity of the art market is its overall size. The European Fine Art Foundation estimated 2012’s global art market to be worth about $58 billion. This is based on auction data and an estimate of gallery
and private sales. 20 years ago the market was worth $10 billion. The reason for its increasing popularity It has been suggested by Deloitte that “the current socio-economic context creates a demand for ‘real assets’ because many lost a lot of money in the financial crisis by investing in products they did not understand and are turning back to things that are closer to their heart and which at the same time offer protection and a return on investment.” We could also mention that having a recognised work by a famous artist hanging on the wall is a better status-enhancer than a portfolio full of financial instruments.
Rental Structure Our Clients benefit from our unique rental program with added benefit of sustained capital growth. All participants will be able to earn on average 8 - 25 % capital growth over a three year period. We offer the most competitive rental rates in the market, flexible packages and varying lease terms with all of our programs contractually bound between client and institution with fixed income quarterly. We hold an extensive portfolio of contemporary artwork from a wide range of media and genres. Museum quality indigenous works from a significant part of our collection. Our experienced leasing team assists individuals and businesses in their selection of private and corporate artwork. With an emphasis now more than ever on bottom line profit, companies are turning to art rental for a cost effective and flexible alternative. Today the S&P 500 Indexcan & be Gold corporate art collection worth a great deal and make a powerful statement but cost very little to the business.
Net Return
Funding
Leasing Income
(12% over the course of 3 years) (£)
£3000
£360
£3360
£5000
£600
£5600
£8000
£960
£8960
£10000
£1200
£11,200
£15000
£1800
£16,800
£25000
£3000
£28,000
£30000
£3600
£33,600
£45000
£5400
£50,400
£60000
£7200
£67,200
£80000
£9600
£89,600
£100000
£12,000
£112,000
£125000
£15,000
£140,000
£150000
£18,000
£168,000
£175000
£21,000
£196,000
£200000
£24,000
£224,000
£250000
£30,000
£280,000
£300000
£36,000
£336,000
£500000
£60,000
£560,000
£750000
£90,000
£840,000
£1.0m
£120,000
£1.12m
£1.5m
£180,000
£1.68m
£2.0m
£240,000
£2.24m
£2.5m
£300,000
£2.80m
£3.0m
£360,000
£3.36m
Facts and figures Artworks have low correlation with traditional investment vehicles thus helping to diversify risk in portfolios. Some art categories are even negatively correlated with financial indexes. While in 2008 the “S&P 500” collapsed 37%, the ‘Mei - Moses All Art Index’ only fell 4.5%.
Global Art market by Value 2014
S&P 500 Index & Gold 1800.00
Germany - 2% Switzerland - 3% France - 6%
1600.00 1400.00 1200.00 1000.00 800.00
Rest of the World - 8%
600.00
UK - 22%
400.00
USA - 29%
Added Value
Fixed Income - 3% Domestic Equity - 11% Private Equity - 13% Alternative - 16% Foreign Equity - 22% Real Assets - 35%
Good artworks generate thoughts and reflections. They can enrich the investor’s knowledge. Art produces emotional and aesthetic experiences. Investing in art differentiates from other investors as artworks are a unique and exclusive asset. They can also be considered conspicuous consumption goods. Artworks have an additional value to the investors that derive pleasure from enjoying the aesthetic qualities of art.
Fixed Income - 34% Domestic Equity - 66%
Art is an investment that spreads culture. An art collection creates a unique legacy that expresses the owner’s interests.
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Allocation
0.00 05/01/92
China - 30%
200.00
Art & Equities During the Financial Crises 4.5 3.5 2.5 1.5 0.5 Jan 07
July 07
Jan 08
July 08
Jan 09
Art 100 Index European 19th Century Art 100 Index (94%) Modern Art 100 Index (133%) MSCI World (14%)
July 09
Jan 10
July 10
Jan 11
July 11
Jan 12
Contemporary Art 100 Index (224%) Old Masters 100 Index (72%) European & North American Sculpture 100 Index (143)
Global market represented
Modern and Contemporary Art represent almost
In 2011, USA accounted for 29% of the market meaning
$57.78
70%
$16.76
billion dollars in 2012.
of the fine art market.
billion dollars.
In 2011 China became the largest art and antique market worldwide representing 30% of the transactions by auctions and dealers. Auction sales increased 177% in 2010 and 64% in 2011.
Although the art market has become more global in the last years, London and New York continue to account for 60% of the imports and exports.
Internet growth has increased transparency in the market helping both buyers and sellers. This can be observed in mainly two areas growth of online sales/ auctions and on the information available to the public.
There are approximately 380,000 art dealers worldwide. From these the top 5% represent 70% of the gross sales and 80% of the dealer sales are below $62,500 USD.
REASONS TO BUY ART
A growing market
Soaring values
Over a million people worldwide now consider themselves serious art collectors. In 1980 the number was just 10,000. That’s evidence of the growing global market that now exists for art with new, serious, deep-pocketed collectors coming from Russia, China and the Middle East. And it’s not just individuals. High-end contemporary art galleries and museums are the must-have sign of maturity for any city with ambitions. New museums are opening every year, and each absorbs hundred of works.
In the first half of 2013, artworks sold at auction during the period had been held for, on average, nine years and produced an average effective rate of return of 6.37%. The absolute winner during the first half was ‘Ribs Ribs’ by JeanMichel Basquiat which after holding period of five years returned to the market with a 54% appreciation in value.
‘Contemporary’ is art’s boom sector
Limited quantity
The Chinese influence
Artnews reported that 87% of the world’s 200 leading art buyers own contemporary pieces. 47% of sales worldwide are from contemporary artists.
Contemporary art is the only collectible art still being produced. The majority of masters of pre-21st century investment-grade art are no longer with us. A finite supply coupled with a growing demand ensures that values for great work keep on growing.
China is now the world’s second largest market for art and antiques according to a study by the European Fine Art Foundation. It reveals that China’s share of global art and antique sales was 25% in 2012, with the USA leading with 33% of acquisitions. The UK remains third, with 23% of purchases.
ART INVESTMENT
3rd Floor 13-14 Hanover St, Mayfair, London, W1S 1YH Tel +44 203 519 1435 www.artinvestmentmarket.com info@artinvestmentmarket.com