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The New Collectors: Investing in art and heritage

Every month, the MD of Aspire Art AuctionsRuarc Peffers, contributes a column on the business of collecting and investing in art.

So you’ve made it. You’ve hustled, and worked, and networked, and worked some more, and now you’re thinking: ‘I haven’t made it to the very top yet, but I can take some time out to enjoy where I am. I can spend some money, and start living the life I want.’ So what do you spend on? Where do you invest your hard-earned money?

Investing in art Aspire Art Auctions
Sydney Kumalo, Leopard, front view

How about buying some art? Cars, clothes and bling are out there, but everyone has those. Art is the lifeblood of South Africa’s culture – it’s our way of looking at ourselves as a society. But art, especially now, is also a pretty savvy investment for someone like you with some cash to spend, who’s looking for some returns.
     For a collector starting out, buying art can be intimidating. But like any other business, investing in art can work for you if you study the industry, gain some knowledge, and buy what you feel that you like. Savvy art collectors around the world think this way – and they are proven right when the global art trade has been outperforming many more conventional asset classes. But investment in art is also about heritage and cultural value – if we understand that our national artistic or cultural identity is a crucial national resource.
     With the global art sector currently worth around $50 billion, and earning well over R1 billion per annum in South Africa alone, there are real financial stakes in understanding what to invest in and how to collect art that will appreciate in value over time.
     Since 2000, the global art market has grown by 36%, calculated on the basis of sales and returns, or volume and values – the same method by which conventional asset classes are calculated on stock exchanges. In comparison, the S&P 500 has gained 86% over the same period, the FTSE 100 is up 2% and France’s CAC 40 is down 19%. The art market is, therefore, a competitive asset class like any other – and offers good returns for people making the right investment choices, informed by a good knowledge of both the art they wish to collect, and the market structure as a whole.
     One of the main areas that attracts many people to the art world is the spectacular prices achieved for individual works, or individual artists. Last year saw plenty of examples of exceptional capital gains on the international stage. Near the top of the pile is US-based artist Jean-Michel Basquiat, whose prices have risen exponentially. In 2017, a work called Jim Crow, from 1986, sold for $17 680 936, having first sold in 1992 for $136 367 – a multiplication in value of 130 times!

Investing in art Aspire Art Auctions
Athi-Patra Rug,a Uzukile the Elder, 2013

     The same principle holds true for much of the art in the South African market. Investing in and collecting art serves a double purpose: it can offer substantial financial returns, but an art collection reflects aspirational and higher social goals. This is especially the case given South Africa’s contested political history. Many black artists were denied the opportunities given to white artists throughout the 20th century, especially with regard to formal arts education and access to galleries, social and cultural networks and even materials. One of South Africa’s greatest artists from this time, albeit in exile, Gerard Sekoto, had to be gifted oil paints by a white benefactor in the 1930s to start his career. Sekoto’s top works now sell internationally for multimillion-rand prices.
     This picture is now slowly changing as a new generation of collectors begins to understand the market, the possible returns, and begins to express a wish to redress the skewed political history of art collecting in the country. A whole generation of artists who were shunned and ignored by the South African art establishment in the latter half of the last century are now being reassessed and are becoming more attractive to collectors who are investing in their work. As a result, artists like Dumile Feni, Julian Motau, Sydney Kumalo, Durant Sihlali and Sekoto are gaining new audiences and markets.
     Motau, for example, was one of the pre-eminent chroniclers of life under apartheid, sketching fanatically from life on night sojourns in Alexandra in the late 1960s. His early death by misadventure, aged only 20, robbed South Africa of one of its potentially greatest artists.
     This reappraisal goes along with the strong identities already established in the contemporary market by artists like Mary Sibande, Athi-Patra Ruga and artist-activist Zanele Muholi.
     Young professionals and new art collectors should, therefore, treat investing in art as a long-term business prospect. As more new collectors enter the market for underrepresented black artists in South Africa, the value systems begin to change, and the way in which South African art presents itself internationally also changes. These changes are in the hands of the new collectors.

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