Having recently valued the city of Detroit’s art collection at $8.1bn, Victor Wiener is keenly aware of the value of fine art. He tells Private Art Investor what he has learnt from several decades in the art world – and why good advice is more important than ever.
As the appraiser who recently valued Detroit’s art collection at $8.1 billion, and having worked on many other high profile cases over the past few decades, Victor Wiener is adept at valuing the world’s most costly and precious art.
He was called in by one of Detroit’s creditors to value the bankrupt city’s art collection as part of the process of finding a way to leverage the art collection as collateral against the city’s debts.
Wiener’s firm of art consultants and appraisers, Victor Wiener Associates, deals with everyone from private collectors to insurance companies, and is a popular choice for hefty, high profile appraisals.
“I enjoy those jobs – they are out of the ordinary,” he says. “The people who work for me like these types of jobs too – it makes life interesting if you have all these challenges in front of you.”
For the Detroit job he was able to take a far more thorough view of the collection than had been used for previous appraisals, coming up with a record-breaking figure that took into account the curatorial expertise that had gone into creating such a unique and important collection.
The case is a timely reminder of the values now attached to fine art; values that are seeing more and more buyers from across the globe enter the market, keen for a slice of the pie.
“The art market is expanding tremendously mainly because of the new buyers,” says Wiener. “There’s a lot of money around, and this has been going on for at least 15 years.”
He says the emergence of Eastern European buyers and buyers from Asia has injected vigour into the market, but warns that, in China in particular, art works are fetching inflated prices.
“These buyers need proper advice,” he says. “Many of them are paying far too much and many are relying too heavily on auction houses. They have to understand that auction houses are primarily agents for the seller, so consequently they may present things in a less objective light than they would be if they didn’t have an economic interest in the sale of the property. That is a major pitfall; they would be well advised to hire advisors who do not have necessarily a financial stake in the sale or the purchase of a work of art.”
Finding right advisor
Not all art advisors are equal; Wiener advises careful judgement when deciding who to work with on building your collection.
“You should definitely be dealing with people you have faith in, who have a proven track record and who come very well recommended,” he says. “That can be hard to find but nonetheless you should persist. You should also have a very firm contract with them, be it written or oral (written is better). It should lay out exactly what they are going to be paid, and what the art advisor is supposed to provide in terms of total transparency.”
He emphasises that if at all possible, written documentation should be obtained that makes it very clear how much money the parties involved in a deal will be making: all too often, the sums taken in commissions are not made clear to the buyer.
A buoyant market
Wiener believes the influx of buyers from Asia and Eastern Europe has helped the art market stay buoyant even in the midst of the most recent global financial crisis.
“The impact of the recession on the art market was much greater in the 1990s than it was in 2008,” he says. “Even though the world crisis of 2008 was much greater than the world crisis of the 1990s, the fact that there are more buyers, emerging buyers and so on has cushioned the blow.”
Because of this, he does not believe the market is in danger of sudden decline.
“When you have a fine quality of art and a seemingly infinite quantity of prospective purchasers then prices are going to go up because there are more people vying for the same art.”
He believes the key to entering the fray successfully is to be well informed.
“Buy things you know very well and if you don’t know it very well, hire someone who does – someone who can advise you and gives you a well-rounded view of what takes place.”
“You should also make sure you get comprehensive reports from your advisors – you would want this if you were buying shares in a company; why not get the same type of reporting from an art dealer?”
He believes there is considerable scope for improvement in this department: the art world is infamous for its casualness, but buyers can change that by demanding more written information.
“Look at the prospectuses that stockbrokers put out – I think you should get something similar from an art advisor, but generally speaking most of them produce nothing at all – it’s just a phone conversation. “
Of course, the need for diligence does not end with your choice of dealers of advisors; Wiener warns against scrimping when it comes to issues such as conservation and storage.
“You need to be as informed as possible and if you don’t have the confidence in your own expertise you should really hire professionals. This is not only about appraisers; with the art market as growth oriented as it is at the moment I think you should pay careful attention to the condition of an object. A good art appraiser would be able to tell you if there could be a condition issue, and then you should hire an independent conservator to do this.
“It also always amazes me that people would spend tremendous amounts of money on works of art and may not spend the required amounts of money to have the thing stored and cared for properly. I’ve been called in to look at works of art that have been damaged in storage. There are some brilliant storage facilities around but there are some less than brilliant, so it pays to be aware.”