Market ripe for art investments – Massimiliano Subba
The art market will remain solid in 2015, with no signs of a bubble forming, let alone bursting, according to Massimiliano Subba, managing director of Anthea Art Investments and creator of the Anthea Contemporary Art Investment Fund. He says the vitality of the market is also due to the influx of wealthy investors from Asia and confirmed recognition on a worldwide basis of art investments as valuable assets.
“China has developed a huge art market,” he says. “There is also a growing interest for art in other parts of Asia, such as Malaysia and Thailand – they are all producing billionaires and these people love to enrich their lives with iconic paintings.”
He says another factor affecting the market is increased liquidity created by central banks monetary policies, which are keeping interest rates low and increasing monetary mass to provide stimulus to lagging economies, most recently ECB announcement of quantitative easing start.
“High net worth individuals have privileged access to credit and financing and are in the best position to take advantage of lucrative opportunities and good deals. A good part of the newly generated wealth and liquidity will definitely flow into the art market.”
Against this backdrop, Subba and his team are planning to launch a second art fund still focused on Contemporary art as he says this is the market segment which presents the best investment returns.
“There is very strong interest in art funds at the moment. Art allows very efficient investment diversification– if you look at what has happened with the Russian market recently, a combination between political tensions and the free fall of oil price has triggered massive wealth destruction.
“Market uncertainty and volatility at the moment is a real issue for investors, and situations like those in Russia highlight the need for diversification. Don’t put all your eggs into a basket. You need to have your investments in stocks, bonds, real estate and definitely you need to have your art fund allocation. If you look at the art market performance in the last couple of years, it’s a no brainer.”
Anthea’s new fund is likely to launch in 2016, when the portfolio of the current fund will be fully established. The next fund will be very similar to the current one in terms of investment strategy.
Subba says the key to its success is the expertise employed in the fund’s buying decisions. Anthea’s art specialists include Swiss curator and art historian Jean-Christophe Ammann and Italian curator Paolo Colombo.
“Expert advice is very important: our experts are truly able to judge the quality of artists and select their best works. When I go to an artist’s studio to look at the work that we have selected and I compare them with other works that the artist has done, I always come to the conclusion that we bought the best one.
“The key to buying wisely is a combination of name and quality – and only very expert people can achieve that.”