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BWAD presents: The Global Art Market. Art as an alternative investment vehicle by Serge Tiroche February 21, 1999. Contents. Scope Market Structure Key Players Oligopoly ? Art as an investment Who should buy Art ? How to buy Art ? Recommendations Conclusion. Scope. Vast Market

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bwad presents the global art market

BWAD presents:The Global Art Market

Art as an alternative investment vehicle

by Serge Tiroche

February 21, 1999

contents
Contents
  • Scope
  • Market Structure
  • Key Players
  • Oligopoly ?
  • Art as an investment
  • Who should buy Art ?
  • How to buy Art ?
  • Recommendations
  • Conclusion

"Investing in Art" by Serge Tiroche

scope
Scope
  • Vast Market
  • Focus on Market for Impressionist, Modern and Contemporary Paintings and Sculpture (i.e. 1860-1960)
  • But same reasoning applies to all types of Collectible Art, Furniture, Vintage cars, Carpets, etc...

"Investing in Art" by Serge Tiroche

the market players structure
The Market - Players & Structure
  • Artists
  • Collectors
  • Gallerists
  • Dealers
  • Consultants
  • Museums / Trusts / Institutions
  • Auction Houses
  • Art Fairs
  • Internet

"Investing in Art" by Serge Tiroche

market trends
Market trends
  • Growth ($, # of players, new segments)
  • Concentration (in Auction Houses)
  • Major trend: Disappearance of retail
  • Cyclicality and correlation
  • Consolidation (eg. France)
  • Sophistication
    • More players
    • More products (Art Credit, Packaged deals, Guaranteed Minimum with advances)
    • Internet (On-line auctions, Prices, Virtual Galleries, Brokers, Access to information)

"Investing in Art" by Serge Tiroche

oligopoly or free market

Supply

Demand

Auction

Houses

Client base

Oligopoly or free market ?
  • Free market develops into oligopoly
  • Reasons: Supplier Cost, Buyer Price

"Investing in Art" by Serge Tiroche

art as an investment
Art as an investment
  • Basic economics apply: Return vs. Risk
  • But, not a commodity, prices flexible
  • Less efficient - i.e. opportunity
  • Less liquid - i.e. time lag
  • Diversification benefit
  • Enjoyable investment
  • Other benefits (e.g. cultural image)

"Investing in Art" by Serge Tiroche

who should buy art
Who should buy Art?
  • First and foremost, must enjoy Art
  • Home owners (decorative purposes)
  • Patrons (supporting young artists)
  • Those looking for a new hobby/passion
  • Status seekers
  • Private Investors/Collectors
    • Have a mix of the above profiles
    • Seek diversification of invested capital
    • Optimists (every piece is unique)

"Investing in Art" by Serge Tiroche

how to buy art
How to buy Art ?
  • By yourself
    • Requires extensive research
    • Cheaper but riskier
      • (Authenticity, Condition, Valuation)
  • With Professional Advice (for higher value)
    • Added value ?
      • (Market knowledge, contacts & experience)
    • Where to get advice
      • Banks
      • Auction Houses
      • Independent Consultants, Galleries & Dealers

"Investing in Art" by Serge Tiroche

recommendations
Recommendations
  • Start by discovering your tastes (theoretical knowledge helps a lot)
  • It’s a passion - invest in what you love !
  • Take your time, build collection slowly
  • As tastes evolve, replace old with new
  • Diversify, buy young and established
  • Don’t get carried away - extra cash only
  • Take an advisor you trust

"Investing in Art" by Serge Tiroche

conclusion
Conclusion
  • Art is an alternative investment vehicle
  • Risks and rewards
  • Must have strategy & basic knowledge
  • Avoid short-termism and speculation
  • Good advice has real added value
  • Patience builds good collections
  • Can start today !
  • Enjoy, enjoy, enjoy

"Investing in Art" by Serge Tiroche