Fixing the Contemporary Art Auction Crisis Pt. 2 – artmarketblog.com

Fixing the Contemporary Art Auction Crisis Pt. 2 – artmarketblog.com

In my last post I detailed two definitions of contemporary art from two different contemporary art museums that challenge the rather inadequate and misleading definition of contemporary art that many auction houses seem to abide by.  Even though I had found two good museum definitions of contemporary art, I continued my search to see what else I could find.  And I am glad I did continue searching because I came across a particularly interesting definition of contemporary art provided by the Tate Museum.  According to the Tate, contemporary art is a:

“Term loosely used to denote art of the present day and of the relatively recent past, of an innovatory or avant-garde nature. In relation to contemporary art museums, the date of origin for the term contemporary art varies. The Institute of Contemporary Art in London, founded in 1947, champions art from that year onwards. Whereas The New Museum of Contemporary Art in New York chooses the later date of 1977. In the 1980s, Tate planned a Museum of Contemporary Art in which contemporary art was defined as art of the past ten years on a rolling basis”.

This definition is somewhat misleading because it lists the date range of two Contemporary art museums, the Institute of Contemporary Art in London and the The New Museum of Contemporary Art in New York, as though these museums define contemporary art by these date ranges.  What I found was that the beginning of the date range of works in the collections of both these museums is in fact the year that each museum was founded.  So, the Museum is not defining contemporary art as work produced from the year each museum was founded, but is in fact just maintaining a collection that is partly historical and archival even though their focus is on work that is new and experimental.  What interested me most about the Tate definition of Contemporary art is the revelation that “In the 1980s, Tate planned a Museum of Contemporary Art in which contemporary art was defined as art of the past ten years on a rolling basis”.  I personally think that this definition of contemporary art is the most accurate and sensible that I have come across and is the definition of contemporary art that the art auction houses should be abiding by.  Continuing with the museum definition theme, I think that the Getty museum provides one of the most blunt and profound definitions of contemporary art on their website which states that “Strictly speaking, the term “contemporary art” refers to art made and produced by artists living today”.  Here, Here !!!.

So, what does this mean for the art market, I hear you ask.  Well, let’s take a look at the results of a recent contemporary art auction held by an auction house that I will not be naming.  The reason I am not going to name the auction house is that there is not just one auction house on which one can lay total blame for this problem.  I also have great respect for the major auction houses regardless of whether or not there are issues relating to the classification and categorisation of works of art.  Looking at the top ten prices paid for this auction, which was promoted as a contemporary art auction, there were eight artists whose work was included in this top ten. The eight artists were Andy Warhol, Mark Rothko, Roy Lichtenstein, Francis Bacon, Gerhard Richter, Willem de Kooning, Robert Rauschenberg and Jean-Michel Basquiat.  Out of those eight artists, seven are dead – the only surviving artist out of the eight being Gerhard Richter.  Even more interesting are the dates that each of the top ten works were created:  1962, 1955, 1962, 1985, 1966, 1992, 1969, 1962, 1986 and 1987.  Six of the works were created prior to 1970, three prior to 1990 and only one after 1990.  The most recent work in the top ten was a work by Gerhard Richter, the only living artist in the top ten, which was created in 1992.  Of all the works in the top ten, the Richter would be the only one that I would consider referring to as a work of contemporary art – only at a stretch, mind you.

Although the top ten prices paid were dominated by the work of deceased artists, I must acknowledge that the auction did include works by true living contemporary practising artists.  Unfortunately the auction house uses the ridiculous misnomer ‘recent contemporary artists’ when referring to the work of the true contemporary artists.  By definition, something that is ‘contemporary’ is recent so to make reference to ‘recent contemporary artists’ is just plain wrong.  The fact that this term has to be used at all is, in my opinion, evidence enough that there is something amiss with the way some auction houses are cataloguing, categorising and presenting the works of art that they are selling.  If you don’t think that this is a big problem in the scheme of things then I respect that and even admit that you may be right.  But for me, this is the straw the broke the camel’s back; just another seemingly small problem that when added to the other seemingly small problems equal a rather big problem.  I do have some plans to combat all these small problems but you will have to wait to find out what my plans are.

image: ‘The Art Crisis’ by Robert The

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

A New Sentimental Art Market Era Pt. 3 – artmarketblog.com

A New Sentimental Art Market Era Pt. 3 – artmarketblog.com

If you want some further examples of the sentimental and nostalgic direction that the art market is beginning to take then I shall provide you with two more. The first example is the direction that the Australian Aboriginal art market has taken recently in response to a severe drop in prices and a major change in perception caused by several factors that I will discuss shortly. Australian Aboriginal art experienced a huge boom roughly in conjunction with the global contemporary art market boom, which saw prices for Australian Aboriginal art skyrocket, and the market for said works expand at a rapid rate. Unfortunately, that boom turned to a spectacular bust for much the same reasons and at roughly the same time that the global contemporary art market took a massive hit.

Much like the global contemporary art market, the Australian Aboriginal art market boom saturated the market with a plethora of rubbish, which in turn diluted the overall quality and relevance of the works of Australian Aboriginal art that were available on the market. Although it may seem that such a situation would serve to increase the value and desirability of the top quality works, it is just as likely (if not more likely) to make people question the value of the entire market and become rather disillusioned with the whole sector or genre – which is exactly what happened. Rampant fakery, forgery and mimicry, combined with obstructive and useless attempts at regulating the Australian Aboriginal art market, caused collectors and investors to fly the white flag of defeat in the face of seemingly insurmountable obstructions. As an indication of how far the Aboriginal art market has fallen as result of the problems associated with the market, the Australian Art Sales Digest has calculated that the value of Aboriginal art put up for auction has fallen from a high of just under $24 million in 2007 to just under $11 million in 2009. 2010 is shaping up to be yet another disappointing year for Australian Aboriginal art with total auction offerings likely to be even less than last 2009.

In response to the rather dire situation that the Australian Aboriginal art market is facing, the market and cultural sector has begun to focus on the Aboriginal master artists of the past who were the real reason that Aboriginal art became so popular. With most art movements and styles there are a small group of artists who pioneer the movement/style and whose work is considered to be the most legitimate and authentic. As a new movement/style progresses it is inevitable that other artists will begin to imitate the characteristics of the work of the pioneering artists in the hope of reproducing their success. In conjunction with the progression of that movement/style there is a tendency for the original purpose and intent of that movement/style to become severely diluted as more and more artists join the procession. The further the movement/style progresses, the more disconnected the movement/style becomes from the original purpose and intention. This is what happened with the Aboriginal art market and also with the global contemporary art market. Fixing such a problem means regaining the integrity, legitimacy and validity that the movement /style once had. To regain the integrity and legitimacy of the beginnings of a movement/style one must return to the roots of that movement/style – a process that is happening with the Australian Aboriginal art market and the global contemporary art market. Australian Aboriginal art dealers and other interested parties have begun to “rediscover ” the work of the early pioneers and disassociate themselves with the work of the plethora of imitators. Because most of the original Aboriginal master artists are either dead or very elderly so focussing on this sector of the market is a very sentimental affair indeed – especially for the families of the deceased artists.

The other example I want to use is the recent reconnection that the French have made with Monet – one of their most famous sons. Although the western world has embraced Monet and made him one of the most valued and respected artists to have ever laid paint to canvas, the French have long considered his work to be far too commercial for their sophisticated tastes. The Paris’ Galleries Nationales recently launched the first retrospective of Monet’s work since 1980 in the hope of reviving interest in the work of one of the world’s most highly valued artists. What makes this exhibition so significant is the reasoning behind the decision to hold this exhibition at this particular time. Guy Cogeval was appointed to the Presidency of the Musee d’Orsay in 2008 and is the curator of the Monet exhibition which is currently on show at the Grand Palais in Paris. When Cogeval was asked by Juliette Soulez of ARTINFO France (fr.artinfo.com): Why have a Claude Monet retrospective today?, Cogeval replied “Fifteen years ago, I personally felt that everything had been said about Monet and that people talked about him too much. I lived in North America for eight years and there were many Monet shows — it was almost a craze”. Then when asked if he was happy with the retrospective, Cogeval said “Overwhelmingly, visitors walking through this exhibition — including Impressionist specialists and college professors and my fellow curators — feel that they’re seeing a Monet they didn’t know before”. Both these statements suggest to me that a similar thing happened to Monet to what happened to the Australian Aboriginal art market and the global contemporary art market. It seems that a long period of western commercialisation of Monet’s work combined with what was essentially an overabundance of Monet focused scholarship effected a gradual diversion away from the “real” Monet.

The French, who were on the outside looking in, obviously cottoned on to what was happening to people’s perception of Monet’s work and were quite rightly disgusted by what was happening. I recently read a review of a book called The Unknown Monet: Pastels and Drawings by Grace Seiberling of the University of Rochester who I think summed up the situation perfectly when she said about the book that: “Their focus on Monet as an artistic genius is in accord with the demands of a particular kind of inquiry into Impressionism, connected with museum exhibitions, and focused on the formal achievements of the sort of artistic superstars who attract paying visitors”. What Guy Cogeval is doing is taking a sentimental and nostalgic approach to Monet’s work in the hope that it will fix the damage that has been done.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Portraits as Art Market Currency pt. 3 – artmarketblog.com

Portraits as Art Market Currency pt. 3 – artmarketblog.com

The last installment of “Portraits as Art Market Currency” received an interesting comment from a reader who said: “Is that why we have portraits on our banknotes? hehe! Maybe that’s what they thought when they designed them….”. All jokes aside, this comment is actually a good introduction to the concept of the portrait as a historical document – a concept that I want to explore with this post. Although we tend to think of paper money as merely a means of acquiring goods, the coins and notes that we use everyday are in fact historical documents of great value. The fact that there is such a vibrant and growing market in old and obsolete coins and notes confirms the fact that we place a considerable level of value on the historical value of money. I constantly hear of coins and currency notes being sold for astronomical amounts of money, thousands of times beyond their face value, because of their rarity and historical significance. There is no doubt in my mind that bank currency often has an intrinsic historical value and that most forms of bank currency could be considered to be historical documents in themselves. Considering that one of the most recognisable and common features of paper money is a portrait of some sort, it would be reasonable to assume that those portraits which appear on notes and coins also have a significantly high level of historical value. And if you think that people don’t care what the portraits on money look like then think again. When Australia changed over to decimal currency in 1966 a new portrait of Queen Elizabeth appeared on the one dollar bill . The new decimal currency bills were designed by Gordon Andrews who was widely criticised for portraying the Queen with what some people thought was a look of unhappiness, and for giving the Queen what some people saw as a slight scowl. Mr. Andrews defended the portrait by pointing out that “if you have someone grinning at you on a bank note, which you have to look at over and over again, you get to hate the sight of it”. A fair point I think. Another example of the extent to which the portraits on paper money are assigned value is a newspaper article from 1962 about counterfeit currency in which a US Secret Service Chief advised people to look at the portrait. According to Chief James J. Rowley “Counterfeit currency has a lifeless portrait, the fine cross-lines are not clear or distinct”. Sounds more like the musings of an art critic than a secret service agency.

Some may disagree with the concept of historical value as a type of intrinsic value but I think there is more than enough proof to suggest that the historical value that many portraits have can be considered to be intrinsic. The sort of value I am talking about is the value of what a portrait can tell us about various areas of history, not the value we place on a portrait because of the positive opinion we have for the person depicted – an opinion that could change depending on the information we have about that person. The US National Archives conducted an investigation into the Intrinsic Value In Archival Material in 1982 which came up with some useful definitions and information that is relevant to this post. According to the ‘Report of the Committee on Intrinsic Value’ it was determined that “Intrinsic value is the archival term that is applied to permanently valuable records that have qualities and characteristics that make the records in their original physical form the only archivally acceptable form for preservation. Although all records in their original physical form have qualities and characteristics that would not be preserved in copies, records with intrinsic value have them to such a significant degree that the originals must be saved.The qualities or characteristics that determine intrinsic value may be physical or intellectual; that is, they may relate to the physical base of the record and the means by which information is recorded on it or they may relate to the information contained in the record.” It is also worth noting that the committee determined that one of the characteristics of records with intrinsic value is “General and substantial public interest because of direct association with famous or historically significant people, places, things, issues, or events”. The findings of this committee confirm that historical documents can have intrinsic value.

One of the best sources of evidence that supports the idea that a portrait can have value as a historical document is the fact that the National Library of Australia has Guidelines for the acquisition of portraits that are acquired to “provide a documentary record of Australian life and achievement”. According to the guidelines “The National Library collects portraits of Australians of national significance as well as portraits of individuals and groups who are not necessarily known but who are representative of different occupations or of various social, racial or cultural aspects of Australian life. Portraits are acquired to provide a documentary record of Australian life and achievement”. Even more revealing is one of the selection criteria that the library uses to determine whether a portrait is worth acquiring. The following is one of the selection criteria:

2.2.2 The documentary value of the portrait

Portraits acquired must provide an authentic record of the physical appearance of the subject. In addition, some suggestion of the field of achievement of the subject is looked for in background details, dress or any objects shown in the portrait.

The extent to which the portrait offers insights into the personality and character of the sitter, and the originality of the portrayal, are also considered important. For some individuals an original portrait as well as a photographic portrait may be acquired if it is considered that they provide differing insights. However, for an original portrait to be preferred to a photographic portrait when both are available, the original work should display this quality to a much greater degree (see 2.2.1).

In the case of original works, a portrait painted from life is preferred to one painted from a photograph, as being more likely to provide the added dimension of character insight. The relationship of the artist to the sitter may also be of relevance here.
From a really young age, we learn to read faces. They have a language and can articulate themselves with nuance in a way that nothing else in the world around us can quite reach. The way an artist paints a face is highly distinctive, and portraiture tells you far more about the artist than it does about the subject. Get to know the vernacular of one artist’s face compared to another, and you can use that knowledge to hunt down other examples.

Non-representational works of subjects are not collected as generally these do not convey documentary information about the subject’s appearance.

Cartoons that offer insights to personality and character will be considered for acquisition.

As far as I can see the value that can be placed on portraits because of their status as historical documents is the sort of future proof intrinsic value that will always remain with the portrait and cannot be disassociated from the portrait.  It is this sort of intrinsic value that makes the portrait a good candidate for use as currency – a concept that I will continue to explore.

To be continued……………….

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Portraits as Art Market Currency Pt. 2 – artmarketblog.com

Portraits as Art Market Currency Pt. 2 – artmarketblog.com

Welcome to part 2 of my series on the concept of portraits as an art market currency.  Before I continue, I would like to explain exactly what I mean by an art market currency for those that are perhaps slightly perplexed by the concept. Obviously, fine art is never going to replace paper money as the dominant form of currency.   My research focuses less on the actual use of currency as a medium of exchange, and more on the concept of currency as an indicator and a benchmark.  It is important to understand that my concept of an art market currency is merely a theoretical concept – the analysis of which I believe can provide valuable information and knowledge for investors and collectors.

In the currency world, the US dollar is used as a benchmark (world reserve currency) for all other currencies because of the political and military strength of the US, as well as the very strong gold reserves that the US held when the Bretton Woods system was introduced after World War II. Although the art market doesn’t have an official genre, period or style that acts as a benchmark for the rest of the market, the popularity and visibility of the contemporary art market means that it tends to be used as a de-facto barometer for the state of the art market.  Unfortunately, the contemporary sector of the art market would have to be the worst sector to use as an indicator for the health of the entire art market.  As we all know, the contemporary sector of the art market is a highly volatile and unstable market that is constantly at the mercy of cultural and social trends – and is often assigned a value that has very little to do with the actual art object.  So, if the contemporary art market is not a suitable indicator of the status of the art market, is there a category of art that is?  This is just one of the questions that I hope to answer with this series of posts.

Let me throw a scenario your way that will hopefully help make the reasoning behind the concept of portraits as an art market currency much clearer.  If I were to give someone who knew nothing about art 100 works of art consisting of: 20 cubist paintings, 20 conceptual  works, 20 figurative landscape paintings, 20 religious icons and 20 figurative portrait paintings – and asked that person to look at each category separately and rank the works in each category according to how much they thought each work was worth based purely on the physical characteristics of the art object (without knowing anything about who the artist is, when they were painted, who the portraits are of, the location of the landscapes etc.) – which category do you think they would find the easiest to rank?  I think that conceptual art would be the hardest, because with conceptual art the main component of the work is the concept, not the art object.   Because abstract art is so nonrepresentational, it is extremely difficult to assess unless the purpose or motivation of the artist is known, which rules out the cubist paintings as the easiest to rank.   Religious icons could be compared to portraits – however, the symbolic nature of religious icons means that their value is closely tied to the cultural, religious, social and art historical context in which they were created, which makes valuing such works difficult for experts, and virtually impossible for anyone who does not have a thorough knowledge of the genre.  Figurative landscape paintings would seem like a good candidate for the most easy to rank because of the representational nature of such works, the general familiarity people have with the way nature should be depicted, and also because the skill and talent of the artist are so easy to determine from the way the picture is presented.  What lets the figurative landscape paintings down is the lack of consistency in terms of setting, location, season, angle etc. which means making a comparison between two landscape paintings is likely to be very difficult.  Finally, we come to portraiture.  There are several factors that make the physical characteristics of portraits so easy to compare and rank, including:

– the consistency of the subject (human face)

– the universal nature of the face

– the common goal of figurative portrait painters (to accurately depict the human face)

– the ease with which virtually anyone can determine how skilled or talented the artist is at accurately depicting the human face

In my opinion the physical characteristics of figurative portraiture are the most comparable and easily ranked of all the genres and types of fine art.  I cannot think of another genre or type of fine art that has such consistent characteristics and is so universally decipherable.  The fact that the physical characteristics of figurative portraits are so comparable across the whole genre, and so easy to rank, means that they are also easier to value when compared to other genres.  It is the characteristics of figurative portraiture that I have discussed above which give figurative portraiture an edge over other genres when it comes to the concept of fine art as currency.

Stay tuned for part 3……….

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Portraits as Art Market Currency Pt. 1 – artmarketblog.com

Portraits as Art Market Currency Pt. 1 – artmarketblog.com

The popularity of figurative art took a real dive post WWII when abstraction began to really hold take, which meant that portraiture, one of the purest forms of figurative art, suffered considerably along with the other forms of representational art.  More recently, conceptual art captured the imagination of the art world and, like the abstract movement, overshadowed the less glitzy world of the classical and the traditional.  The contraction of the art market that took hold in 2008 – primarily a result of the severely overheated market for contemporary art –  did, however, cause the art market to re-evaluate the value it placed on contemporary art as well question the reasoning behind the justification of the phenomenal prices being paid for contemporary art. Because the value of much of the contemporary art being produced is dependent upon the culture of the market in which the art is being sold, any major changes to the dynamic of that market are bound to have a severe effect on the value people put on contemporary art.  As is always the case, when the latest short term fashion driven trend begins to crumble, people turn to the safety and assurance of the traditional and the classical.  It is during or after major art market corrections that the difference between a short term fad and a particular style or movement temporarily going out of fashion becomes clear.  By definition, a fad is a temporary state of affairs that, once the novelty fades, is gone forever.  A considerable percentage of the contemporary art that enters the market will only retain the value it is given for as long as the fad it is associated with lasts.  Because the fads that drive the contemporary art market rarely get the sort of scholarly attention, cultural patronage or art historical recognition that ensure longevity of an artist and their work, many contemporary artists fail to survive the demise of a trend or the onset of an art market contraction.  Although portraiture fell out of fashion, as it has done on several occasions, the fact that there is so much scholarly, academic and art historical support for the genre means that there will always be a market for portraits – a market that can only continue to get stronger each time the genre comes back into fashion.

Philip Mould is a world renowned expert on historical British portraiture and, as well as regular appearances on the British version of Antiques Roadshow, has written several books that regale the reader with thrilling tales of the serial sleuther’s many quests to unearth the true identity of an artist or their subject.  Although he started dealing in portraits because they were cheap, Mould developed an infectious passion for British portraiture that even made me want to start dealing in portraits.  The great poet Charles Baudelaire once said that “A good portrait always appears to me like a dramatized biography, or rather like the natural drama inherent in every man” – a statement that I totally agree with.  Although the classical portrait may have a certain stigma attached to it, and may seem to many to be a rather boring category of art – once one begins to discover the biographical, socio-historical and cultural associations that a portrait is likely to have, the portrait can quickly go from being a humble representational picture to an extremely interesting and important historical document that can reveal fascinating historical, cultural and social information.  Uncovering the often hidden delights of a portrait is usually a time consuming project but is also an extremely rewarding and fascinating journey which more people are beginning to see the benefits of.  Uncovering the secrets of a portrait can not only be an exciting and educational experience, it can also be financially rewarding in cases where the information uncovered adds historical, cultural or provenencial value to the portrait in question.

Portraits have featured heavily in many of the most successful art auctions that have taken place over the last few months.  Asa an example of what I am talking about, check out the top results (from mutualart.com) of the July 14th Deweatt-Neate Old Masters and 19th Century Pictures auction.

Top lots sold above high estimate

Old Masters & 19th Century Pictures

Jul 14, 2010 10:00 AM
Bartolomé Esteban Murillo, The flower girl
By Bartolomé Esteban Murillo
3,840 GBP
Green Arrow380% above estimate
Angelica Kauffmann, Immortality: A Nymph Presiding in the Temple of Immortality
By Angelica Kauffmann
79,200 GBP
Green Arrow340% above estimate
British School, 18th Century, Portrait of a lady Half length seated
By British School, 18th Century
2,160 GBP
Green Arrow209% above estimate
Titian, Head study of a man (fragment)
By Titian
1,560 GBP
Green Arrow160% above estimate

Stay tuned for part 2 for a detailed explanation of the reasoning behind my portraits as art market currency theory.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Art Market Hedge Trends – artmarketblog.com

Art Market Hedge Trends – artmarketblog.com

Although investing in fine art is considered to be a hedge more mainstream investment markets, a new trend has emerged that has seen numerous attempts to launch projects that aim to introduce alternative methods of investing in art as a hedge against the traditional method of investing in art – purchasing a work of art and taking physical ownership. One such project is the collaboration between artist Tom Saunders and art collective Idefix Bloc which with an exhibition of Saunders’ work titled SHOP + OFFICE held at murmurART gallery East London. What makes the SHOP + OFFICE exhibition so unique is that Saunders was not offering his work for sale in the traditional sense. Instead of collectors and investors purchasing physical ownership of an art object that Saunders had produced, as would normally be the case, Saunders offered potential clients the opportunity to purchase the right to buy his art in 10 years’ time for £1 for an immediately payable fee of £2000 pounds, the price that Ferguson Solicitors, the UK law firm, believes is the correct price for an “option” contract, which is essentially what Saunders is offering. Basically, you can pay £2000 now for the right to purchase any piece of the artist’s work in 10 years time for only £1. The lure for investors is the potential to earn huge profits if Saunders becomes a highly successful artist whose work sells for large sums of money, or at least significantly more than the £2000 investment. Saunders’ work could, of course, turn out to be worth less than the £2000, but that is the risk investors take. There are, however, contract provisions that cover premature death or non-production.

Over in India, another innovative art investment project has been started by an Indian entrepreneur. Indian investor Arun Rangachari, chairman of venture capital firm DAR Capital, has purchased the rights to the entire life’s work of a reclusive Italian artist by the name of Montanari, who has lived in seclusion for the past 18 years. Rangachari is building up an art collection, of which the work of Montanari will play a significant part, with the intention of setting up an art fund in the future. Before selling any of the paintings, Rangachari plans to increase the value of Montanari’s work by holding exhibitions and building a foundation dedicated to the artist’s work. According to artnewspaper.com ‘His (Rangachari’s) first art investment consists of 40 paintings by the Italian artist Americo Montanari, with the option to buy many more……..When asked why his art fund would succeed when other ventures, including Indian-based funds, had recently failed he said: “Our entry level will be affordable, we’ll be focusing on artists who have not yet built a reputation and we will have no hidden costs, everything will be up front, so we’ll be quite different from everyone else.”’

The Chinese are also getting in on the act with Chinese financial corporation Shenzhen Artvip Cultural Corporation recently going public with China’s first openly traded art portfolio. The portfolio, which comprises of 12 paintings by contemporary artist Yang Peijing, is being traded on the Shenzhen Cultural Assets and Equity Exchange (SZCAEE) in the form of 1000 shares. All 1000 shares sold out on the first day of trading for a total of US$354480 with profits from trading the works of art to be dispersed by Artvip as the works are traded. According to artinfo.com: ‘Established in 2009 by the Chinese government, SZCAEE functions as an alternative platform for the trading of a wide range of cultural assets — including artworks, luxury goods, and films — as part of the Chinese government’s attempt to commercialize, diversify, and regulate the public exchange of such cultural properties. SZCAEE plans to offer a second 1000-share portfolio, featuring 40 works by Yang Peijiang, sometime in the future.’

Interestingly, each of the above projects are focused entirely on the work of a single living artist, which is comparable to investing in a single business. The benefit of focusing on the work of a single living artist is that the future output of the artist can be controlled by a certain degree by those with a vested interest. There is also the potential for a much larger return from the work of a living artist as a result of the progression of the artist’s career. In terms of downsides, the most obvious downside of investing in the future of a living artist is the uncertainty. Whether the rewards are worth the risk is yet to be seen……..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

2010 Art Market Status Report – 2nd half – artmarketblog.com

2010 Art Market Status Report – 2nd half – artmarketblog.com

The art market has found its self in a rather interesting predicament.  On the one hand, confidence in the art market has increased considerably since the beginning of the year.  On the other hand, the ever increasing likelihood of a major financial crisis has seen more cautious and selective buying.  Adding to the drama is the increasingly obvious lack of top quality paintings by the Old Masters, which the market is currently showing a very healthy appetite for.

On the 13th of July an impression of Edvard Munch’s controversial work Madonna sold for an amazing £1,252,000 at Bonhams – twice its lower estimate of £500,000. This makes it the most expensive print ever sold in the UK and the second most expensive print in the world. At Bonham’s 19th Century Paintings sale held on the 22nd Apr 2010, ‘Female figure study’ , a drawing on paper by John Constable with a hidden history, sold for four times it pre-sale estimate to make £24,000. Also achieving success was an interesting  ‘Portrait of a Gentleman’ by George Dawe (British 1781-1829) which was the subject of fiercely competitive bidding and finally sold for £43,200 against a pre-sale estimate of £4,000-6,000.

At Christie’s Victorian & British Impressionist Pictures Including Drawings & Watercolours sale on the 16th of June,  Sir George Clausen’s ‘Head of a young girl (Rose Grimsdale)’ made £505,250 against an estimate of 250,000 – 350,000 setting a new world auction record for a work on paper by the artist. The same sale also saw a new record for Archibald Thorburn with yet another work on paper titled ‘Grouse in flight’ which made £217,250 against an estimate of 60,000 – 80,000

At Christie’s 23 June 2010 auction of Impressionist and Modern Art the top price was achieved by ‘Portrait of Angel Fernández de Soto’, 1903, a Blue Period masterpiece by Pablo Picasso (1881-1973), which sold for £34,761,250 against an estimate of 30,000,000 – 40,000,000.  Another portrait titled ‘Frauenbildnis (Portrait of Ria Munk III)’, one of the last great female portraits painted by Gustav Klimt (1862-1918), sold for £18,801,250 against an estimate of £14 million to £18 million.

Yet more portraits achieved high prices at Christie’s Old Masters & 19th Century Art sale held on the 9th of July at their South Kensington saleroom. Margaret Sarah Carpenter’s ‘Portrait of a young girl’, who is thought to be Henrietta Carpenter, reached £32,450 against an estimate of 7,000-10,000 and achieved a new world record price for the artist at auction. A work from the Studio of Sir Peter Lely titled ‘Portrait of King Charles II’ also fetched £32,450 against an estimate of 6,000-8,000.

Over at Sotheby’s the ‘An Exceptional Eye: A Private British Collection’ sale held on the 14th of July saw a watercolour over pencil by John Robert Cozens titled ‘The Lake of Albano and Castel Gandolfo’ reach £2,393,250 against an estimate of 500,000 ‐ 700,000 –  the top price of the sale and a new record for the artist at auction.  The portrait miniatures performed particularly well with the Sotheby’s press release stating that “a very high price achieved for an early work by John Smart (lot 17, £56,450), and a record for a work by Bernard Lens (lot 10, Portrait of King Charles I, sold for £58,850)”

At Sotheby’s Impressionist & Modern Art Evening Sale held on the 22nd of June, the top price paid was again for a portrait.  Edouard Manet’s ‘Portrait de Manet par lui-même, en buste (Manet à la palette)’ fetched £22,441,250 against an estimate of £20,000,000-30,000,000 –  a record for the artist at auction. The top-selling lot of the June Russian Paintings Day Sale was Boris Grigoriev’s oil on canvas Portrait of the artist’s son, Kirill, which sold for the sum of £253,250, above its high estimate of £200,000.  Another portrait, Alexander Evgenievich Yakovlev’s ‘Titi and Naranghe, Daughters of Chief Eki Bondo’, took top spot at the 7 June Important Russian Art Sale selling for £2,505,250 – more than triple the £700,000 – 900,000 estimate .  Sotheby’s sale of the long-lost art trove of Ambroise Vollard saw more records set for works on paper held in Paris on the 29th of June. According to the Sotheby’s press release from the sale: “Key works among the highlights of the group were an extremely fine impression of Picasso’s celebrated 1904 etching ‘Le Repas frugal’ (another portrait), which more than doubled its high estimate of €300,000 to bring €720,750 (£584,078), the highest price of the sale. A monotype by Edgar Degas, ‘La Fête de la patronne’, circa 1878-79 soared past pre-sale estimates (€200,000-300,000) to bring €516,750. Paul Gauguin’s ‘Trois Têtes Tahitiennes ‘sold for €312,750 (£253,445) well above the estimate of €100,000 to €150,000 and a record was set for a print by Pierre-Auguste Renoir when ‘Le Chapeau Epinglé, Deuxième Planche’ more than tripled its high estimate of €80,000 to bring €252,750 (£204,822). Man Ray’s ‘Autoportrait solarié’ fetched €168,750 ($206,138)”

On the 2nd of June at Sotheby’s in London, in the sale of 19th Century European Paintings, one of the finest figure paintings by Jean-Baptiste-Camille Corot ever to have appeared on the market was purchased by the Musée d’Art et d’Histoire in Geneva for £1,609,250, exceeding its pre-sale high estimate of £1.2 million.  According to Sotheby’s “‘Jeune femme à la fontaine’ enjoyed an exceptional early provenance before it was requisitioned during the Nazi period, and was recently restituted to the heirs of its erstwhile owners.”

The results that I have highlighted above give a good indication of the current market sentiment and the market trends that are likely to define the market for the near future.  To start with, the popularity of portraits is a major indication that buyers are seeking the safety of the academic and the scholarly.  With portraits in particular, the level of skill and talent of the artist is pretty much immediately obvious to even the most untrained eye. When it comes to fine art, and portraits in particular, I do not think that people use the term craftsmanship to describe the work carried out by some artists.  To accurately portray the physical attributes and the personality of the sitter is, in my opinion, a craft that requires skill, training and a healthy dose of talent.  When one adds the historical value and importance of portraiture, the appeal of a famous (or not so famous) face from history to an investor becomes even more apparent.

I have spoken about the concept of fine art as a form of currency in previous posts.  If ever there was a type of art that was more suited to being used as a form of currency, it would have to be portraiture.   The number of common features that most portraits share, combined with the ease with which one can judge and value a portrait based on intrinsic and extrinsic characteristics, makes the portrait a prime candidate for an art world currency.  As I have said before, scholarship is the key to successful art investment, and successful wealth preservation using art for that matter.  Portraits are usually afforded the honour of in depth scrutiny and attention by scholars and academics because of the information that portraits can provide about various branches of history.  For this reason, among others, portraits are given the sort of long term continued attention that constantly adds value.

The second trend that I have alluded to is a greater interest in works on paper – in particular original drawings and watercolours.  I personally of the opinion that the increased popularity of watercolour paintings, particularly those by British artists, is due to the greater interest in the art of the Victorian era which was the golden age of British watercolour painting. Although original works on paper, such as drawings and watercolours, are often looked upon as the less valuable mediums in the scheme of things, the tide can change very quickly as it has recently.  As well as the revival of interest in Victorian art, a shortage of major works by the Old Masters and the Impressionists has driven buyers to seek the qualities that they are looking for in other mediums and periods. An article titled ‘Young masters in an old game’ from The Guardian newspaper written by John Windsor in November 2009 sums up the situation surrounding works on paper perfectly with the following statement: “Taste is shifting from new, ill-conceived conceptual art of the Brit-pack variety – costing thousands but faltering at auction, towards old, traditional skill-based art……. but you do need to develop an eye for quality – the easy, confident line of a master draughtsman, the luminosity of a watercolourist’s washes.” It is a shame that the watercolour painting is considered the poorer cousin of the oil painting because there are so many amazing watercolours by some of the world’s greatest artists that do not receive the exposure that they deserve.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications