When Sandip Mallik set up Prime Art Capital in June 2013 he was responding to several key needs he had identified within the art world.
A boutique art advisory and investment management firm, Prime Art Capital leverages technology for clients who are interested in art and other fine collectibles as an asset class. It is registered in Singapore but has presence in all major markets.
“I founded Prime Art Capital with the intent to solve four problems,” says Mallik. “First, art advisors do not understand investment management; investment managers do not understand art; and neither of them understand the power and reach of mobile technology.
“Secondly, art and other fine collectibles are illiquid assets that collectors often need to monetise but they do not have access to the right service providers. Third, new wealth in new, non traditional markets like the BRIC countries (Brazil, Russia, India and China), south east Asia and the Middle East are creating new collectors. Where do they go for services like storage, title insurance, valuations?
“Finally, estate planning and succession management for treasure assets like art, furniture or jewellery is almost never done proactively – leading to poor outcomes, and potential loss in value. Our research told us that there is an acute shortage or, in some cases, complete lack of quality services, and that this was the perfect opportunity to serve new, non-traditional markets.”
Prime Art Capital’s core competence is portfolio management in order to build and preserve value of our clients’ treasure assets. It is extremely rare – possibly unique – in that it has deep expertise in Sharia-compliant art investments. This helps attract and serve new collectors in markets like the Middle East, Indonesia, Malaysia and Singapore.
“Rather than focus on a particular genre of art we can curate an asset portfolio based on aesthetic and/or religious preferences of a client,” says Mallik, who believes that high quality collector services is the biggest challenge in new, non-traditional markets.
“We will leverage the power and scaling ability of technology to bring an active marketplace to collectors wherever they are,” he says. “Our business model trascends the traditional geographical, social and/or network boundaries. A client can then buy any service (like insurance, storage, appraisals, framing etc) directly from their mobile phones, tablets or computers. This will not only gives them access to best-in-class service providers, but will also ensure contract transparency and competitive pricing.”
One of the most common requests dealt with by Prime Art Capital is for the monetisation of treasure assets without them leaving the collector’s home.
“While we are very conservative in our approach, we are talking to a couple of private banks in some markets to offer a suitable product that preserves asset ownership, while creating a short term monetisation opportunity for the client,” says Mallik.
As for the current state of the global art market, Mallick perceives it as very mixed, with some continuing good prospects at the high end but inconsistencies and unpredictability further down.
“I think the top-end of the market still has an upside as the ultra wealthy hedge their currency, debt and portfolio risks by investing in fine art and other collectibles. We are witnessing the birth of many new museums in the Middle East and China, creating a further demand for “trophies” which should keep top-end prices high.
“The rest of the market is in shambles. When you talk to dealers and artists, they do not see any indication of an upswing.”
He adds that the new wealthy, in places like China, India and Brazil, tend to buy local art first or invest in an art fund, before developing the confidence to buy directly from art dealers outside their own country.
“In the last 5 years art fairs in South Korea, Indonesia, Taiwan and Mexico have created some buying momentum but this has had a marginal impact on the overall art industry.”