As art flies off the walls at Basel, buyers beware, experts warn
15/06/2017 16:08
By Brenna Hughes Neghaiwi
BASEL, Switzerland, June 15 (Reuters) - "When did so many
people start caring about contemporary art?" wondered Marc
Glimcher, head of the Pace gallery empire, as he busily made
deals at Art Basel's VIP preview this week.
With 291 galleries from 35 countries presenting 4,000
artists' works, the world's most prestigious art fair is as much
a place to hobnob as it is to buy and sell an estimated 2.5
billion to 3 billion euros ($2.8-3.4 billion) of art.
This year's fair - hard on the heels of a $110.5 million
sale of a Jean-Michel Basquiat painting at a Sotheby's auction
in New York - got off to a fast clip, dispelling a sombre market
mood last year.
At the Levy Gorvy booth, a collector snatched up a small
Joan Miro on paper while the gallery's co-founder and former
Christie's chairman Brett Gorvy showed another potential buyer a
nearby work.
A large painting from the late German artist Sigmar Polke's
flamingo and heron series, which caught the eyes of four buyers,
sold for around $12 million, while a $32 million Basquiat
attracted museum curators and dealers.
"I always said I won't leave in a downturn or when the
market is riding a rocket to the top," said top dealmaker Gorvy
on his departure from Christie's in December to join forces with
dealer Dominique Levy.
"It feels like there's a nice steady rise."
With mid-market prices ranging from $50,000 to $1
million, art deals represent "large and infrequent purchases"
even among the world's growing population of millionaires, art
economist Clare McAndrew said.
In the first market report commissioned by UBS and Art
Basel, she estimated art sales hit $56.6 billion last year, with
the rich eager to place cash at a time of low financial returns.
"I don't know whether art is already an asset class," Juerg
Zeltner, head of international wealth management at Swiss bank
UBS UBSG.S , told journalists at the fair.
"The only thing I do know is that money is worth less. Given
the central bank interventions, it does look to me that a lot of
private investors are looking to also invest money in art."
But that poses pitfalls for buyers whose ranks have swelled
from several dozen serious collectors to millions of active
buyers in recent years.
Mark Andersen, a UBS asset allocation expert, said art's
one-of-a-kind nature makes it nearly impossible to treat as a
traditional investment, lacking the predictability and
standardised metrics that forecasting requires.
"The phenomenon of people not being well advised and
thinking they're going to get into the art market and buy a hot
artist to make money historically doesn't end very well," Citi
C.N private bank's art advisory and finance head Suzanne
Gyorgy said.
ART FOR ART'S SAKE
In the Art Basel Unlimited section for video and museum-scale
works, U.S. artist Rob Pruitt filled a room with images matching
art world figures with their celebrity look-alikes.
Art adviser Lisa Schiff, who arranged the purchase of the
work on behalf of one of her clients on the fair's opening
morning, said she was seeing a changed mindset from buyers at
this year's fair.
"The habit of the last 15 years of buying voraciously is
finito," Schiff said. "People are getting exhausted by this
complete addiction to auction estimates and auction prices...
Value is when you build something and you believe in it."
But art mavens remain wary of speculative buying at a time
when the world's wealthy, waylaid by political and economic
uncertainty, are eager to place cash.
Speculation had transformed the industry from one driven by
art to one fuelled by finance, Galerie Gmurzynska's Mathias
Rastorfer said.
"If you're selling for a lot of money, without critical
acclaim, without peer recognition and without curatorial
accompaniment, you're still successful because you're selling
well," Rastorfer said, adding that the phenomenon was slowly
beginning to correct.
For Glimcher, who spends 14 days a month on airplanes
jetting between gallery spaces spread from Hong Kong and Seoul
to London and Palo Alto, a busy schedule is testament to the
limited scope for scaling up an art business.
"It's not possible to truly corporatise this business, which
is built on relationships and interpersonal interactions," he
said. "That's why we have these art fairs."
($1 = 0.8957 euros)
(Reporting by Brenna Hughes Neghaiwi; Editing by Toby Davis)
((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))
Keywords: ART BASEL/