The art of investment

For investors in art, Francis Newton Souza is not just the name of a million-dollar artist, but also the mark of a hopeful rise in the Indian art market after the global downturn. Souza’s lots went for $7.9 million (about Dh29 million) at a Christie’s auction in London in June this year, S.H. Raza’s ‘Saurashtra’ fetched $3.5 million, while Subodh Gupta’s ‘Chimta’ installation went for more than $700,000 — all at more than twice their estimates.

So what is it about art that induces people to spend such celestial amounts of money?

A reason to buy
There are as many reasons for buying art as there are buyers. Art allows people to express their individuality, to represent their underlying beliefs and ideology. Some pursue art as a passion and collect masterpieces as a hobby. It is often purchased and displayed to signify wealth, success and power. There are also those who buy art to cover empty walls and like it to be unobtrusive, while complementing their interior decor. Art dealers and investors buy art that is likely to bring desired returns on the investment made.

When asked who is buying art today, Malini Gulrajani, Owner and Director, 1x1 Art Gallery, located in Al Quoz in Dubai, says, “Most of the speculators and short-term investors have burnt their hands and are out of the market [following the economic downturn]. Speculative ventures have been unable to fulfil unrealistic promises and have fallen by the wayside. Today, art is being purchased by art lovers and serious collectors.”

Ambika Vohra, Director, Art Select, observes that while the younger buyers are going for younger contemporary artists, the older audience is opting for modern masters.

Anybody in the art world will willingly testify that it is a multimillion-dollar industry working mostly in whimsical and speculative ways. When asked to advise on what could be a safe buy, Gulrajani says that art is a long-term investment and the past few years prove that speculation is not the way to go. It is, therefore, safer to rely on a relatively established name. If you can afford a modern master with the long-term view, buy one of their works by all means. Gulrajani hints that buying paintings from the senior contemporary bracket of artists is a smart choice for those looking for a good deal. Investing in paintings by contemporary artists such as Chittrovanu Mazumdar, Bharti Kher, N. Pushpamala, Bose Krishnamachari and Riyas Komu, is relatively safer — more likely to bring returns with minimal risk.

“A good-quality work by a major modern artist in the long-term view is always a good buy. Prices of senior contemporaries are slightly soft currently but sure to pick up over the next year or so,” says Gulrajani.

The learning process
Vohra says you should trust your instinct in order to collect art meaningfully. She is of the opinion that, “Collecting is not just buying art; it is a joyous experience”. Therefore, she advises you to visit art fairs, galleries and museums to learn about different artists and different pieces of art and build an appreciation in the learning process. “As far as I’m concerned, [when you buy art] you’re investing in something that is going to give you pleasure for a very long time. Aesthetics, rather than price, should be the guiding force.”

Vohra advises investment in artworks by Murali Nagapuzha, who has been awarded the prestigious Pollock-Krasner Foundation Grant, and her personal favourite, Pratibha Singh.

Both Gulrajani and Vohra agree that art is a great investment,but only if you are an informed investor. They advise buyers to check the background of the artist and put lots of time and effort into the research. Vohra also advises buyers to probe the pricing logic before trying to make a purchase.

Installations and video art
Trends suggest that the future of Indian art is beyond the canvas. Both gallery directors are excited about the advent of art into our lives in ways unprecedented. Sculpture, photography and video art should be taking over in a big way soon. Gulrajani talks about how houses are making room for funky installations and bringing art into unexpected spaces. Considering the rising interest, this area should also make for potential investment opportunities.

Taking art to heart
Not everyone has a businesslike attitude towards art — some also tend to take art to heart. In June this year, some Indian politicians criticised the auction of paintings by the Indian poet, Rabindranath Tagore, at Sotheby’s in London, saying the paintings were a national treasure and should be brought back to the country to be preserved at an art gallery rather than “be left in the hands of private art dealers for making money”.

This also brings forth the need to tighten laws that decide what makes art antiquity.