Art as an alternative investment class is one of the fastest growing asset classes in its category, says Bongani Khulu, Absa head of family office and client engagement.
“The majority of art collectors buy art to add to their collections, but with an investment view,” Khulu said.
“The art market has shown an ability to thrive through economic and political uncertainty. It is not about flipping artwork every year, it is a long-term investment that is meant to be enjoyed.”
According to the 2018 South Africa Wealth Report, South African fine art prices have risen by 28% over the past 10 years (in US$ terms), while global fine art prices have risen by 12% over the same period.
According to New World Wealth, the number of High Net Worth Individuals in South Africa rose by 8% during 2017, reaching 43,600 by the end of that year.
But not all art investors belong to this small group of wealthy individuals, said Dr Paul Bayliss, Absa art and museum curator, who collects and manages the Absa gallery and provides a platform for nurturing young artists.
Bayliss is responsible for managing Absa’s art collection comprising about 18,000 works – the largest corporate art collection on the continent.
“You don’t need a lot of money to get into investing in art, you can buy an artwork for a couple of thousand. There is value for everyone.”
Bayliss said potential investors should look at an artwork in the same way you consider a stock on JSE.
“Examine the artist’s credentials, their technique, whether they are developing or remaining stagnant in their work. An artist could be technically strong but you should understand their narrative,” Bayliss said.
“I most enjoy visiting an artist in their studio because it gives one insight into the artist’s world.”
But, he cautioned, if you are buying art, don’t merely buy due to the possibility of making money.
“Purchasing art is a lifestyle investment. Sure, old South African masters like Irma stern or Jacobus Hendrik Pierneef fall within a bracket and guarantee a return on investment. But with younger artists don’t buy because you’re hoping to make money in five years, buy because a piece resonates with you.”
Bayliss advised those who wanted to invest in art to do their homework.
“Attend artist openings, engage with the gallerists and interact with like-minded people,” he said.