Anders Petterson is a leading authority on the global art market and the founder of ArtTactic. We caught up with him to discuss his thoughts on current trends and the biggest risks which collectors face today ...
Q) Can you tell us a bit about your background and how Art Tactic first came about?
A) I moved from Norway to London in 1991 to study at London School of Economics. My first job was working as an investment banker for JP Morgan. In 2000, I started toying with the idea of a company that would supply objective, independent research and analysis for art collectors and art buyers, build on a similar model to an independent equity research firm. Out of this process came ArtTactic, which I founded in 2001. It was difficult the first 3-4 years to convince art collectors about the value and need for independent research. At the time, most research, information and market intelligence came through existing relationships with art advisors, auction houses and galleries. However, the global art market boom that started around 2005 saw many new art buyers entering the market. This influx of new participants, coupled with new, less transparent and immature art markets, increased the need and interest for information, research and education. This trend has become even more prevalent in recent years, particularly after the art market downturn in 2009.
Where we stand today is that whether you are a passionate collector or a speculator – you want to make an informed decision. ArtTactic does not substitute the knowledge and experience that auction experts, galleries or art advisors have, but it complements the due-diligence process, by aggregating and analysing any relevant data (price, sentiment, expert opinions etc) that we can find. Finally, we sell information and research, and not art works and we believe this independence is a critical element to the value of our service.
Q) Do you think we are still seeing a change from a collector led market to an investor led market, in which more and more consumers buy art for its financial value as opposed to its aesthetic appeal?
A) Yes, I think the market has become more investment oriented, partly as more people are viewing art as a viable asset class, and not only as a passion. However, the largest portion of art buyers is still investing in art for both emotional and financial reasons. We see very few art buyers who do it purely for investment reasons.
Q) The annual Frieze Art Fair is considered a health benchmark for the global art market. Did the 2012 fair perform as you expected?
A) Considering the current economic environment and the intense competition from other international art fairs, I think the Frieze Art Fair 2012 met its expectations. The feedback that we had from galleries and our clients were positive and transactions were taking place at all levels from the very high-end, reflecting the trends that we see in the auction market, but also at the lower price range, signalling a continued demand for younger, less established artists. The new addition of Frieze Masters added more gravity to Frieze’s art fair model, and was very well received by collectors and visitors.
Q) Why do you think the art market continues to be so vulnerable to economic uncertainty?
A) I don’t agree that it is so vulnerable. If one looks at the Post-War and Contemporary sales in November 2012, the market achieved an all-time high. So in light of austerity, sovereign debt crisis and global economic slowdown, parts of the art market seem to be doing pretty well. However, I do think one has to be careful in generalising these findings, as they only reflect a thin layer of the art market, which are works generally priced above $1 million. The middle-market for contemporary art (which we define as the $100,000-$500,000) looks more vulnerable as this has typically been the market that has appealed to City-type buyers, hedge fund managers – who in recent years have been facing lower bonuses and redundancies as the financial industry is going through an unprecedented overhaul.
Q) What advice would you give to a young collector looking to make their first investments in the art world today?
A) I would not recommend new young collectors to buy art as a pure investment. The investment market for art is currently limited to a relatively few number of artists at already very high prices. I would recommend someone to become an ‘active’ investor (or patron). Invest time to get to know the galleries and the art scene. Before buying a work, get to know the artists – make it personal and enjoy the fun of following their development and sharing their success.
Q) Based on sale results from autumn 2012, which geographical markets do you think have the strongest future and where shows cause for concern?
A) I think Brazil has an interesting future ahead, Eastern Europe remains undervalued and undiscovered. I feel China’s recent growth has been unsustainable, and driven by speculative elements.
Q) What advice would you give to dealers looking to make the most of emerging markets tipped to have a big future?
A) Establish relationship with the important local players (galleries, dealers, museums, curators and collectors). They need international galleries to help promote and raise awareness of the artists they represent, exhibit or collect. At the same time, these local players would act as important conduits for dealers to tap into a local market and its collector base as it starts to grow.
Q) How important a role do you think conservation framing plays in maintaining the financial value and long-term sale-ability of fine art?
A) As a result of the increasing monetary value of art in the last 10 years, there is an increasing focus on conservation and how to best protect the art work, as this will affect its financial value. In this context I believe conservation framing will be more and more important.
Q) In your opinion, what is the single biggest risk which fine art collectors face today and what can they do to safeguard their investments?
A) Not sure there is one single category of risk, I see at the moment two types of risks:
Risk: Buying into the tail-end of a herd –driven, ‘over-hyped’ market.
Solution: Become a contrarian, rather than a follower. Look for artists with historic importance, but who the market has largely ignored.
Practical Risk: Under-insurance/no insurance
Risk: Damage/loss/theft where the works are not adequately/ or not insured
Solution: Use a specialist insurer who understands art and art risk.
Q) Which artists do you like to collect for your own private collection?
A) I would have loved to have one of William Kentridge’s stop-motion charcoal animations.