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Investing in art (asia)
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Investing in art (asia)

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An interview with Phil Whittaker from Sotherby's Institute in SIngapore.

An interview with Phil Whittaker from Sotherby's Institute in SIngapore.

Published in: Business, Economy & Finance
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  • 1. Aesthetic InvestmentsAn expert from the educational arm of one of the worlds leading auction housessuggests that the Thai contemporary art market may currently be undervalued.Steve Thompson reports.Steve ThompsonI recently got the chance to attend a fascinating lecture (‘Collecting Strategies: A Question ofTaste Versus Investment’) in Bangkok, presented by Phil Whittaker, director of SotherbysInstitute of Art in Singapore. Sothebys Institute of Art is part of Sothebys, the highlyinfluential and successful company that organizes regular art-related auctions, private salesand art-related financing activities worldwide.The presentation served to destroy a few myths among those in attendance at this excellentevent, which was organized by Bangkok’s Thavibu Gallery. I would suggest after digestingwhat Whittaker had to say that while there are certainly impressive gains to be made byinvesting in art, a high level of expertise and experience is clearly required in order togenerate any form of meaningful profit.Whittaker began by highlighting one recent extreme trend in the area of art investment. Hispresentation pointed out that during the period 2004-2008, the Chinese contemporary artindex recorded gains of 2,500%. While that figure caused quite a few jaws to drop amongmembers of the audience, we later discovered that following the credit crisis (late 2008), theindex has since fallen by about 1,500%, although it would seem that there has been a recentuptick, suggesting confidence is returning to the market, according to Whittaker.I recently got the chance to follow up on the lecture by conducting an interview withWhittaker, who kindly clarified several of the interesting points brought up during the lecture.
  • 2. Steve Thompson (ST): Hi Phil, firstly, thanks very much for the lecture and for agreeing toanswer my follow-up questions.It was interesting to learn from the lecture the subtle differences between an art investor anda collector. Could you just reflect upon that point again for the benefit of our readers please?Phil Whittaker (PW): Sure. In an extreme sense, a collector will be buying art in order toacquire it (possess it, if you like), while an investor will be specifically be buying art with aview to a financial return. Its likely that most people within the market fall somewherebetween these two extremes, but the dividing characteristic is really about treating art for itsaesthetic quality, or as just another financial asset class.ST: I see. You referred in your presentation to English artist Damien Hirsts Beautiful InsideMy Head Forever auction, which took place at the London branch of Sothebys in 2008.During the auction, the New York-based Gargosian Gallery and White Cube Gallery bid forsome of the artists work, despite already being the representative of the artist. I think quitea few people in attendance might have been rather shocked by this.PW: Yes, the point I was trying to make was that the rules of the game within the artbusiness may seem a little strange to outsiders.ST: Isnt this basically a form of market manipulation, though?PW: In the art world, this is not considered manipulation, this is considered to be normalbusiness practice. Auctions Houses: Two Big Hitters The Sothebys brand is recognized globally within the art world. Sothebys forms one half of an effective duopoly of major auction houses with Christies. These two auction houses dominate almost 80% of global turnover. Within Asia, even the larger regional players are currently dwarfed by these two major players.ST: In general, would I be correct in asserting that during the lecture you largely came outagainst investing in art through so-called art funds?
  • 3. PW: Yes, its my belief that base funds are a fundamentally flawed concept, and anyinefficiencies in the market are only likely to be exploited by those on the inside. Basically,there is very little chance of any amateur successfully investing in art.ST: What is the situation like in Singapore for art, both in terms of sales (at auctions) andlocal artistic talent?PW: The art market in Singapore is somewhat complicated and sensitive. The regionsauction houses appear to do well in the city state and sales are strong, but it isnt reallyrecognized as a major art location in the same way as Hong Kong, China.Image (above): Narak (‘Cute’) by Nigel Price ©ST: What advice would you offer aspiring artists in terms of trying to achieve commercialsuccess?PW: The keys to success, in no particular order, are: go to the best art school you can findand graduate top of the class; be prepared to wait at least 10-15 years before you achieveany serious success; never give up, and; always believe in yourself. Unfortunately, even if youdo all this, you may still not succeed. The final ingredient you need is a major slice of luck.ST: I appreciate that Sothebys Institute of Art runs several formal degree courses. How dothese courses benefit your students?PW: Our degree programs prepare students to work as professionals within the internationalart world. The course you decide to study will shape your employment opportunities in thefuture. However, the key elements of all our programs are access to insiders and insiderinformation, and our balance of practical and academic rigor.
  • 4. ST: Are there any specific artists or specific countries that would seem to offer the artinvestor a good deal of promise right now?PW: I would suggest that any individuals interested in art look closely at their homegrownartists, rather than seeking potential over the horizon. Almost any location has the potentialto produce good art and good artists, but you have to take the time and effort to develop asense of taste to appreciate it.ST: Finally, are there any markets within the region that you would consider to be particularlybullish, both in terms of the art produced and the strength in sales and interest?PW: At the moment, I would say that the Philippines market is somewhat undervalued, as isthe Thai market. Both locations are producing interesting art and artists, but, apart from acouple of exceptions, both are yet to establish themselves a truly international reputation.ST: Thanks very much for your valuable time.PW: Youre welcome. Image (above): Ivor Hunsch - ‘From One Mug Punter to Another’ Investing in Art: Resources Readers interested in learning more about art investment might wish to check out the following useful links, kindly provided by Phil Whittaker: Http://www.invaluable.com http://www.theartnewspaper.com http://www.arttactic.com/ and; http://www.artprice.com.

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