Investing in art for returns

Art investment is a thriving area that continues to build global city economies but how does investor behaviour change in response to current trends in the art markets?

Knowledge of trends is important and Knight Frank’s Wealth Report is invaluable in this area. This year’s edition has some interesting findings.

According to the Knight Frank research, ‘European Impressionist painters such as Matisse and Cezanne saw the largest annual drop in the value of works sold at auction, while 19th Century artists like Constable and Turner rose by 19%.’

Economic fears, the report states – such as the outcome of Brexit talks – seems to have slowed sales this year but it also acknowledges that auction results only represent 45% of the total art market.

The report also looks at the growing trend in ‘male jewellery’, referring to the expertise of Bonham’s Global Head of Watches, Jonathan Darracot, who suggests that collectors are moving away from dress watches towards more functional timepieces, such as sports chronographs and military models.

Awareness of trends is useful but how do you start to invest in art if you require a guiding hand in building a personal collection. The Fine Art Group was set up by Phillip Hoffman in 2001 with the aim of filling that gap and helping to educate investors.

The group operates entirely independently from auction houses, dealers and galleries and offers collection management and art financing in addition to knowledge.

The team works at understanding the client’s tastes as part of an individualise service, perhaps diversifying a portfolio for a HNWI who hadn’t considered investing in art as a viable alternative asset.

The group also advises a number of investment funds which buy and sell artworks for a profit and its new art lending company, Fine Art Financial Services will also provide loans secured against high quality works of art and jewellery.