Marine Tanguy, the founder of MTArt, explains how diligent investigation and thorough understanding of the art market can reveal new and up-and-coming artists, offering exceptional returns on investments.
You might begin by walking into a gallery in search of an expert, or you
might go online to gain an understanding of the kind of works that are
appreciating in value. Yet for all that you might research, art is still seen by many as an emotional investment, driven by aesthetics rather than being motivated by a clear strategy for securing a financial return.
However, if you know what to look for there are plenty of opportunities to make a profit in a thriving global market. More exciting still is the fact that artists are constantly finding new ways to commercialise their work, meaning there are more ways to invest in art than ever before. It is easy to get caught up in a work of art, but the artist behind it is just as important. Understanding which artists to invest in will give you the best chance to secure works that turn a healthy profit. If an artist lacks ambition, vision or a strong work ethic, you are better off avoiding investing in them.
We live in a new age of art investment, and a new era of art investors. And it is for this reason that millennial collectors descended on a Sotheby’s auction in Hong Kong and acquired $28 million worth of art inspired by The Simpsons television show. We need to take Bart Simpson seriously.
This is indicative of the direction of the new digitised art market. The astronomical sales and intrinsic opacity of the art sector can intimidate outsiders, but if you know where to look, who to invest in, and when to sell, there are more opportunities to make money in the sector than ever before.
The best way to mitigate your risk is through research and diligence. This can be challenging, while there is plentiful data available on the most renowned artists, there are fewer information points for those in the upcoming bracket. The art market still lacks transparency, and this represents the greatest challenge to entry point investors.
Strong long-term investment
Investing in big-name artists such as Damien Hirst or Banksy might appear safe because their growth is steady, but as an entry point this end of the market is almost completely inaccessible for everyday investors. Hirst pieces can sell in the $5m - $15m range. Even Banksy, who made his name as an underground street artist, has sold works well in excess of $1m, and that is excluding those that have been shredded immediately afterwards!
Art has shown itself to be a strong long-term investment over the last eighteen years, outperforming most of the equity indices. Sales in the
global art market have steadily increased over this time, evidenced most recently by an increase from $63.7 billion in 2017 to $67.4 billion in 2018.
Rather than focussing on the high end of this lucrative market, the opportunities for aggressive growth in return on your investment are with upcoming artists, who are on the cusp of a breakthrough.
The challenge lies in identifying those with not only the talent, but also the character to make themselves a financial success.
Investing into an artist before their first museum show, or before they sign a deal with a major brand that will cause the value of their works to increase and their support base to rapidly expand is the ideal scenario. As with any investment, the more guesswork you are doing, the higher the risk. The best way to mitigate this risk is through extensive research and due diligence. A Venture Capitalist makes up to 10 calls of reference on both the entrepreneur and the recent successes of the company: a VC would ask to speak to a client, competitor and a journalist. When someone wishes to invest in one of our artists, we offer the same references.
I founded MTArt Agency, the first talent agency for upcoming visual artists, to respond to this untapped opportunity in the market, and to provide financial support to the best new talent in the art sector. We have found that for the more successful artists you can expect an increase in value of works of over 150% year-on-year. We receive around 200 portfolios from artists each month, and our selection committee then selects the best and most commercially viable to sign with us.
When we sign an artist, commercial viability is an important factor. The two key categories within this are technique and vision, the combination of these are what make an artist successful. Art is about expression and individuality, and it follows that artists with a particularly unique technique will have a greater USP. An artist also needs a strong narrative thread that runs through their work and makes their personal brand recognisable.
There are artists who are producing amazing work through technology and other innovative mediums, and these are worth looking out for. Those who push boundaries always have the highest ceilings. Adelaide Damoah is a perfect example of this. Having signed with the agency little over a year ago, her work rate and adaptability are incredible. In twelve months, she has partnered with UCL, with luxury brand Chloé, more than doubled her highest sale and seen the average sale of her works increase by 436%. This is testament to the rate of acceleration that is possible if you invest into an artist who personality is driven and relentless.
The art world is expanding beyond the traditional gallery model, so don’t be fooled into thinking that a lack of gallery representation precludes an artist from being profitable. As a fledging investor myself, I have already been fortunate enough to benefit from Adelaide’s phenomenal growth.
Having signed at a point when she had no institutional recognition or major partnerships, in the space of two years her sales have increased from £3,000 per piece to £11,000, which shows the rate of acceleration that is possible.
When you uncover that rare mix of artistic talent and personality, there is no better time to invest in an artist and join them on their journey than just before their big break.
Getting to know artists
Framing personality in the context of investment is also crucial. An artwork can be beautiful, but why does that mean it will be valuable? Bear in mind that the artist will need to keep reinventing themselves to stay relevant, keep challenging themselves to move forward, and keep creating new works to make themselves profitable. If possible, it is worth trying to get to know an artist before investing in them. Speaking with them and understanding their journey and vision will give you an idea of what their trajectory will be. An artist we have worked with for several years, David Aiu Servan Schreiber, has done this very effectively. He has built up a large and loyal pool of collectors with whom he has personal relationships.
The fact that these investors follow his career so closely means that his works sell quickly, and their value appreciates quickly. Social media is useful in this regard too. It is not just a means to ascertain how busy an artist is and how prolific they are in producing work, it is also a medium
through which an investor can look to build a rapport with the artist.
The art world is incredibly competitive, and efore signing any artist we want to be certain that they have the hunger, drive and passion to pursue a career over the next forty years. Success is predicated on ambition, an exceptional work ethic, and the resilience to deal with the setbacks this industry throws at you. It’s therefore worth spending time researching an artist to ascertain how prolific they are in producing work, and to see whether they are working in partnership with various brands and stakeholders.
An investor also needs to be creative in choosing which artist to invest in. The art world is bigger than museums and galleries. We partner artists with brands, government bodies, hotels, airports and a wider pool of private collectors. Some of these partnerships are incredibly lucrative, and lead to greater mainstream exposure than a more traditional gallery relationship might. If you look in the right places, there are hidden gems in the art world. There is no better feeling than uncovering the perfect and rare combination of artistic brilliance and personality. The journey of an upcoming artist is fantastically exciting and to accompany them on that path is always worth the investment of time and money.
Article published in Family Office Investor
Words by Marine Tanguy
RIGHT HIGH POLISHED BRONZE BUST © LEO CAILLARD
THIS IS ME THE INCONSISTENCY OF THE SELF PERFORMANCE DAY 2 © ADELAIDE DAMOAH
© DAVID AIU SERVAN-SCHREIBER