Art market needs more transparency

China’s contemporary art market is miles ahead of the Indian art mart, and globally, there is a huge interest in this segment. I recently read a report that pointed out some of the ills that are now plaguing the market. Some Chinese artists, it was alleged, pay critics, produce paintings by the drove, and auction houses work with dealers and artists to manipulate prices. This ‘disclosure’ is a market-related phenomenon. After all, where there are millions of dollars at stake everyone wants a portion of the pie. Art critics being paid to write ‘favourable’ reviews is something, which one hears about even in our country.

Now, most art experts feel that the Indian art market is also poised to grow tremendously. Which means the stakes will go even higher. Looking at some of the recent sale figures, M F Husain’s untitled work fetched $409,000, leading the Sotheby’s New York spring sales of Indian art. Prior to that, Saffronart’s first contemporary sale this year closed at a total sale value of over Rs 27 crores (US$ 7.15 million), which was well above its total higher estimate of Rs 19.56 crores (US$ 5.1 million). What is also interesting is that at this sale 25 percent of the bidders were not Indians, according to Saffronart sources.

Controversies have been dogging the Indian art scene as well. A few Indian auction houses have received criticism that ranges from dealing with fake paintings to popular film posters. In fact, all kinds of issues have been raised time and again. Instances of dealers bidding for the works that they themselves have consigned have also been heard.
Market forces that are looking at short-term gains can not only affect their reputation irrevocably but can also impact the entire market scenario. What has emerged in recent times, as we have just seen, is that there is a growing segment of non-Indian buyers who are looking at Indian modern and contemporary art from an investment perspective. I believe that clean and above-board dealings will help strengthen the market, enhance credibility and encourage this buyer base to invest further. Therefore, the point is that the greater the transparency in the market, the better it will be in the long run. And, most importantly it will benefit all.

(Published in Bangalore Mirror)

Art Buzz (Bangalore) Group Show

Art Buzz (Bangalore) Book Launch

Investing in art

Thanks to the hype there is a lot of interest in investing in art, but for many buyers the biggest challenge lies in knowing where to begin. Although this topic has been covered extensively in the past, a few points can be reiterated to help the new class of investors.

There are some financial consultants who manage investment portfolios and who are now also diversifying into investing in art. Should you go for that option, remember to check out their credentials to ensure they are sound on all aspects related to art. Art as an asset class requires specialised knowledge, for instance information on upcoming artists, price and market trends to name just a few. In addition, a strong network with galleries, dealers and clients who are open to secondary sales is also a must. On the other hand you can opt for an art consultant who can assist you with planning out your art portfolio. Another option is to consider investing in art funds.

Having said that, the biggest thrill that comes with investing in art lies in doing your own research, reading up all available information, keeping tabs on the market, visiting art shows, interacting with artists and so on. The joy of choosing an artwork that appeals to your senses and you want to put up in your home is immeasurable. However, when you are looking at art from a purely investment perspective, be prepared to sell it when necessary. Most collectors caution and advise that one must maintain objectivity towards the artwork. Passion and emotion can cloud your judgement and you may either find yourself drawn towards art that has no investment value or you may end up keeping artworks foregoing opportunities to sell them at an advantage.

Keeping up to date on newer mediums, genres and foreign artists one can have the advantage of picking up works at lower costs that have the potential to appreciate in future. In conclusion, it helps to remember that one must always buy from reputable sources, ensure there are all relevant documents (authenticity and provenance), look for quality works and finally diversify your portfolio accordingly.

(Published in Financial Times)

Update

Following complaints that readers are unable to find an 'e-mail' option and are forced to put in a comment, I have added the e-mail option at the right hand corner of every post.

- NM