David
Norden
in Paris
- Galerie de Buci- 73 rue de Seine.8-13 sept.09
David
Norden
in Paris
- Galerie de Buci- 73 rue de Seine.Five African miniatures presented by David Norden in Paris next week ( Image real size )
Bamun (ex. Josef Herman )Bangwa royal miniature (ex. J. Herman ) Phemba-Yombe top of a staff (ex-Theo Joyal- Michael Rhodes/NYC) Baule (ex. J. Herman ) Songye (ex. J. Herman )
On the other side a banking crisis, declining economic
output, and the IMF possibly readying itself to bail-out UK (and USA? )
government finances: in economic terms, the World is back to the dark days of
the 1970s.
So what did smart investors do with their cash in the mid-1970s? Well one of the
biggest investors of the day – the British Rail pension fund – reduced its
exposure to gilts and the stock market. In 1974, it did what no big pension fund
had done before. It bought fine art and asked W. Gillon to select the African
Art pieces.
And by the time the financial storms of the 1970s and early 80s had passed, that
art was resold and had earned British Rail pensioners an 11.3% average annual
compound return. That is higher than typical very long-term returns on equities
of around 8%.
But – and this is crucial – the art also introduced an element of
diversification into British Rail’s pension portfolio and thereby reduced the
overall riskiness of its investment returns. That was a savvy thing to have done
when, just as today, the financial system was facing exceptional stresses.
An outstanding opportunity to pick up great African art on the cheap
Well, that same great investment opportunity could be opening up for you right
now. The credit crunch has caused fine art prices to fall by as much as 40% from
recent peaks. Transaction volumes at auction have dropped back significantly and
many African Art dealers has showed a bit nervous when sales are slowing down.
But this time round, you don’t need to be a big City institution to grab your
share since African Art has pieces in all price categories. By visiting the
dealers in Paris next week, you could soon have your very own stake in fine
African Art with good provenances that will prove a good investment on the long
run...
And that could prove a very shrewd move, protecting your wealth from the
inflationary impact of our government’s reckless borrowing binge. If our
experience of the inflationary 1970s and 1980s is to be repeated, then you must
make sure you own some assets that are real rather than financial. And the
better quality and more scarce they are, the better.
Fine art could fit the bill perfectly. How much you should allocate to fine art
will depend on your own circumstances and investment objectives. But it might be
helpful to know that the British Rail pension fund invested 2.5% of its assets
in art.
There are many factors at play which support the case for investing in art right
now. Urbanization and population growth are driving a boom in art museum
construction as a catalyst for urban renewal. It’s known as the “Bilbao
Effect” when a successful museum helps to regenerate a whole city or district
and attract international visitors. Examples of this include the Quai Branly in
Paris, the foundation Beyeler Riehen/Bazel in Switserland, the De
Young Museum in San Francisco and last but not least the MAS
that will open it's doors in Antwerp spring 2011 and
will also show The Dora And Paul Janssen Collection of Pre-Columbian
Art (MAS-pdf).
Even the authorities in the United Arab Emirates
recognized this when they decided to construct a new Louvre museum in Abu Dhabi,
due for completion in 2012.
Finite supply and growing demand point to higher prices ahead
There is a shrinking supply of major works worldwide, with museums tending to
hold forever once an item has passed out of private hands. This bodes well for
future prices being higher than they are today. Research has established that
art gave investors an average annual return of 7.7% between 1875 and 2000. That
compares to a return of just 6.6% from equities over the same period, although
the comparison ignores the significant additional return from dividends, which
art, of course, does not provide.
Art’s investment performance has been strongest during periods of currency
devaluation or price inflation – which the UK and USA looks to be heading into
right now. Several Art funds where created recently, one UK-based manager
of one art fund summarises the benefit of art as providing an “irreplaceable,
unleveraged real asset.” It all stacks up to art becoming an increasingly
mainstream investment option in the years ahead.
Just like gold, art pays no dividend and has to be stored safely for the very
high valued pieces, unless you prefer to enjoy it in your home. If the lack of
any dividend puts you off, then you might be interested to know this: African
art investors enjoy the art by viewing it at their homes or offices and gives
them more prestige. And, if the pieces are lent out to museums, you can see them
there and perhaps feel a sense of pride in owning something of such quality and
lasting value. Lending art to museums also helps to raise the work’s profile,
quite possibly boosting its future valuation – and your eventual profit.
This situation presents you with perhaps a once-in-a-lifetime opportunity to
acquire top museum quality works of African art. However, it is a long-term and
illiquid investment that requires very specialist knowledge and experience.
If you are sufficiently wealthy and knowledgeable about art, then you may be in
a position to purchase the best artworks directly yourself from high end dealers
in Paris. But if you are of more modest means or less knowledgeable prefer to
leave the task to an expert to help you select pieces in your collection, you
could also invest in small ethnographic pieces and from lesser valued areas like
Tanzanian Art. Apply the same rules investing in African Art than with your
money, spreads over several works, prefer quality to quantity and helps you
achieve that all-important diversification.
You
are welcome to see my recent acquisitions and the presentation of the novel Ashanti
Spell from Sara VanClef:
"This could have been a love story... I found Ashanti Spell a very interesting insight about unknown facts in the history of the Ashanti. I enjoyed reading a heartbreaking story of the spell of the Ashanti on a white woman. Very interesting are the information about the meaning of this Ashanti doll, and the attempts to learn its age and value."
David Norden
"...Ashanti Spell is an intriguing story that holds the reader's interest from beginning to end. It is a thumping good story told in a very good voice that will have the reader quickly turning pages in an impatient rush to discover the mystery shrouding the African sculpture..."
The opening reception with my recent acquisitions is next Tuesday afternoon at 3:05 p.m. in the Galerie de Buci, 73 rue de Seine, 75006 Paris
Good investing and enjoy African art in Paris next week,
David Norden
Tel +32 3 227.35.40
P.S.: Many of my sites performing maintenance. We'll be back shortly.
P.S.2: IF you need a map to locate me just click the
image below
