Most investments and cooperations are based on hard facts, figures and reports. Some investments, on the other hand, come straight from the heart. This is especially true when it comes to the purchase of artwork. It is therefore not surprising that many art collections managed today by professional family offices were originally the private pleasure of their founders.
Of patrons, muses and benefactors
Investing in art is indeed not an invention of the 21st century. The history of patronage goes far back into past centuries, and even today we owe magnificent buildings, sculptures, paintings and much more to the patrons of the time.
Today, however, there is more to it than just personal love and noble patronage. The soaring value of certain genres of art has dramatically increased the visibility of art and collectibles as an alternative asset class. Since 2003, the world art market has tripled. There is no equivalent to the familiar stock index here. Managing an art portfolio therefore requires countless individual strategic decisions: Genre by genre, artist by artist, object by object. Just as with the selection of individual securities, success depends on when to buy and when to sell.
Reciprocal effects: How the web and art interact
In the meantime, digitalisation has also reached the art market and – as in so many areas – the corona pandemic was the driving force here, too. During the lockdowns, galleries were forced out of the blue to publish prices online. Artists were suddenly globally accessible, and their art was visible online anytime, anywhere in the world. Before Corona, non-fungible tokens were still a distant dream; today they are the instrument of commerce for digital art. At the same time, lockdowns enabled the emergence of new art forms. Social distancing, with all its restrictions, also created freedom in the form of free time. And art is a daughter of freedom – as Friedrich Schiller already noted.
What remains after all the considerations, indices and reflections?
“A work of art, unlike a start-up, cannot go bankrupt. In the end, however, I value a painting like any other product,” explains Berthold Baurek-Karlic, Managing Partner (CEO) of the venture specialist Venionaire Capital, with whom he has been successfully advising family offices for more than 10 years, and a manager of his own family office himself. “A good product must never become boring. That’s what makes true art for me. Think of great masters like Monet or Balzac. Even after centuries, the human spirit, the human soul delights in them.”
It was this feeling that led him to purchase a painting by the Austrian painter Mike Büchel. Büchel’s Homage to Honore de Balzac (160×180, oil on canvas) now adorns the premises of Venionaire Capital. For Baurek-Karlic, art is more than just a pure investment. Art is always associated with a high emotional value and arouses feelings. “The homage to Honore de Balzac amazes me. Wherever the eye falls, it discovers something new; it wanders from one loving detail to the next, lingers briefly and yet already wants to scurry on curiously to discover even more,” Baurek-Karlic enthuses about the painting by the Tyrolean-born Büchel.
Investing in tangible assets – but how?
Especially in times of low interest rates and rising inflation, people are increasingly investing in tangible assets. In addition to real estate and gold, works of art are currently arousing the interest of investors. In contrast to shares or bonds, however, works of art do not generate a regular income. They even cause follow-up costs for the investor after the purchase: insurance, storage, maintenance and not to forget the personal rights of the artist resulting from the authorship.
Anyone who wants to be successful in the long term with fine art investments needs the necessary specialist knowledge or expert advisors at their side. Venionaire Capital’s network of over 250 experts naturally includes galleries, scene experts and artists from a wide range of disciplines.
Investments in art are of a long-term nature and should only be made if you like the work so much that, deep in your heart, you never want to give it up.