With the recovery in US equity markets this past quarter (up c. 6.5%) it would seem that the risk of a broad market correction has dissipated, for now. This has given another boost of confidence to the art market as Q2 activity continues to be extremely robust.
Art Basel’s 2017 art market report, produced by Clare McAndrew, was released in March. It reported a 12% YoY increase in total art market turnover, to $63.7 billion. Private dealing accounted for a majority 55% share, with auctions accounting for the remaining 45%. The US market was still the largest, but new bidders from China and other Developing Markets are seen pushing up prices, particularly for trophy works. An interesting finding that has become very topical following a series of mid-level galleries choosing to close down in recent months was summarized by McAndrew as follows:
“It’s always been the case that the top end of the market does a little bit better, but the margin between how it’s performing and everybody else is performing has become wider... it’s paralleling what’s happening in the world, the gap between the ultra-rich and everybody else has never been wider.”
So far in 2018, both auctions and dealing seem to be off to a very strong start. Auctions were boosted by exceptionally rare works such as Da Vinci’s Salvador Mundi ($450 million), Modigliani’s Nu Couché ($180 million) and the charity sale of the collection of David and Peggy Rockefeller which obliterated the previous single owner sale record held by the Yves Saint Laurent and Pierre Berge collection ($484 million), with a staggering total of $833 million which set 22 new world auction records.
Supported by very high-quality exhibitions at Basel institutions (particularly Bacon/Giacometti and Fondation Beyeler, Bruce Nauman at Schaulager and Sam Gilliam at the Kunstmuseum) the fair attracted 95’000 attendants including many Museum buyers and boasted particularly strong VIP days:
“Art Basel is always good, but it isn’t always this-year good. I think many people had the best first day of Art Basel they’ve ever had.” ―Marc Glimcher, Pace Gallery
The strong sentiment in the art market, complemented by a perception of higher risks in financial markets (equities, fixed income and even certain real estate investments being sensitive to rising interest rates) is giving rise to renewed investor appetite for alternative investments. As art is more and more perceived as an inflation hedge and a new alternative asset class, we see a number of initiatives in the art investment arena. The most noteworthy being the recent announcement that United Talent Agency and Peter Brant are working on setting up a new $250 million Post War and Contemporary Art Fund. Other initiatives include the Blockchain based Maecenas and Swiss-based Qoqa selling the idea of fractional ownership of artworks.
On our front we are in advanced planning to launch 2 new art funds:
- Africa First which will follow closely in the footsteps of the Tiroche DeLeon Collection as a second emerging market / emerging artist fund that is looking to raise $30 million for investment principally in artists of African origin.
- Art Vantage Global which is targeting a $100 million raise for investment in established Post War & Contemporary Art.
In this context, on May 29 I gave a 9-minute Ted-style talk at a conference in Israel on Impact investments organized by Epoch Times. The gala event, titled “Invest for a Change” was held at the Tel-Aviv University’s main auditorium. A video of the talk (in Hebrew) is available here.
In order to support the growth of the company, we are pleased to welcome a few new additions to our team. Ariel Seidman joins us as COO following a 20-year career in wealth management at Rothschild’s Luxembourg; Tamar Rakovitch joins as collection manager following roles in leading banking and private equity firms, and Danielle Gorodenzik joins as research analyst/content manager with prior experience in curatorial practices and non-profit art institutions.
On the way to Art Basel, Ariel Seidman and I had stopovers in Geneva and Zurich for the Art Gallery Weekend. We enjoyed great weather and some incredible art and viewing some private collections. At Art Basel, the overwhelming sentiment was that this edition was probably one of the best ever. We also managed to get away from the city for a day to visit Schloss Mauensee where Rita and Uli Sigg hosted a reception showcasing a few amazing Chinese Contemporary artists, several of which we collect, namely Ai Weiwei.
Back in Israel, we recently hosted a dinner and exhibition from my Israeli art incubator collection, for a group of leading curators, artists, collectors, and journalists. The trip was organized by Culture for Coexistence - a UK based not-for-profit organization seeking to bridge divides and encourage coexistence between Israelis and Palestinians through a cultural platform. The event was much fun and gave good exposure to a generation of upcoming Israeli and African artists which we support.
There were no new acquisition or sales in the second quarter.
As always, please do reach out if you have any thoughts or comments.
Enjoy a quiet, relaxing and harmonious summer,
Serge Tiroche, co-founder
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