Art: a viable asset class
The global art market is expanding to almost every country as a viable investment. A majority of banks, financial intuitions, funds and a variety of investors are now aware of art as an asset class and want to learn how they can get started. This growing market gives opportunity to millions of people who have previously thought ‘art as investment’ was only for the ultra-wealthy. That is the view of Rayah Levy, founder and director of Mill Valley, CA-based fine art investment company ArteQuesta.
“I do see a ‘bubble’ forming in several different sectors, yet I also see the emergence of an entirely new market that provides millions with an art investment they never thought they had access to,” she says.
Levy created the foundation for ArteQuesta in 2007 and officially launched in 2011, with the aim of supporting the arts and artists while working directly for the collector/investor to build qualified art investment collections.
“I had previously been in the art business in various capacities since 2002 as a gallerist, art dealer, curator, then later in finance as an Art Market Expert. I had developed a wide understanding of the art market and had experience and training with a group of influential art market experts, investors, entrepreneurs and generational art collectors,” she says.
After developing a substantial clientele, Levy wanted to create a company that served collectors and investors. Her goal was to support the arts and artists while working directly for the collector/investor to build qualified art investment collections.
Her background has left her in no doubt about the viability of investing in art – as long as you have the right advice.
“Art is the oldest form of commerce in recorded human history and withstands almost all other investments,” she says. “It has been shown to be uncorrelated to the S&P500, and the global economy continues to prove that in good times art is highly sought after, and in poor times people want to have their funds in hard assets, especially in artworks that withstand financial dips.
“With the right art, your investment repeatedly keeps its value, and is generally known as a ‘storehouse of wealth’. The pitfall can be choosing the artwork, which comes with having the experience, eye, and assistance to make the right purchase that will be a good investment. Not all art is investment quality art.
“Working with someone like ArteQuesta, who points the investor in the right direction to navigate the market, gives the purchaser the best chance at investing successfully. It is easy to be believe something is investment quality art without an understanding of how the market works.”
ArteQuesta builds investment quality art collections as art portfolios on the primary market, not on the secondary market. The company buys and sell the artwork for its clients with the aim of helping them enjoy the experience of collecting, and the financial returns.
“We provide our clients with the same types of experiences they would get from a gallery, including exhibitions and inside art world material, while tailoring their artwork purchases to their investment goals,” she says. “The most unique aspect of working with us is our international effort to rescue and preserve arts that are influential in art history. Our clients have the opportunity to invest in rare works not available to the public, as well as invest in the primary market.”
Levy says that when investing in art it is important to consider your financial goals, and your risk tolerance – which can determine the best level of investment for your portfolio.
Historically significant artworks continue to be good investments, she adds – but entry level pricing on artworks from contemporary artists who have a strong track record is always a good place to start.
“However, the type of art chosen can vary greatly depending on the investment goals of the client. If you invest in the right art, the value of your investment can appreciate far greater and much quicker than any other traditional investments.
“Art investment is a real saving; it is a hard asset that is displayed and enjoyed in your home while it appreciates and is unaffected by the global economy. It may take time to sell, but you generally don’t lose your money or value of your dollars.”