Welcome to the WC, wherein you’re trapped in my mind for eight to ten minutes weekly.
I’m off to Nashville on Friday, so there won’t be any access to the WC for a fortnight, I’m afraid. Service resumes the first week of November.
But just two bits for you this week:
- This week, art
- Why art investing is hard
- Is the art market in trouble?
- So what’s to like right now?
- One book recommendation
Next week, I’ll (finally) dive into some potentially better uses for the 30+ million acres of land (more than 1% of America) currently devoted to ethanol-producing corn.
Let’s go.
Table of Contents
Why art investing is hard
Investing in art can be super lucrative. You hear stories of people 100x’ing their money on a newly minted starlet or a rediscovered old master.
But that’s not the norm, and making money with art is challenging in some perhaps unexpected ways.
With art investing, you have all the usual problems associated with investing in an appreciating asset:
- No cash flow
- The whims of the market
- Finding a great asset to buy
- Finding a buyer when it’s time to sell
But two other problems make art more challenging than most asset classes:
- Timing: the really, really great opportunities come around irregularly and have quick deadlines. You need to be ready to act — then act fast.
- Transaction costs: if you buy from an auction, you’ll pay 20% or more in fees. The same goes when you’re selling. Likewise if you’re working with an art broker and gallery. Flipping a piece for 50% gain gets you to even once these fees are factored in.
So you see operations like MasterWorks crop up. They raise funds ahead of time and have the clout to negotiate better prices than the average Sheik.
Their platform has its own challenges:
- The AUM is high, so they have to focus on big, well-known artists and artwork where there’s usually less alpha.
- In addition to standard management and performance fees (1.5%/20%), they take their own 10% off the front end and 15% to 25% when they sell.
Which is pretty much what you’d pay via a broker and gallery in the end.
This problem has had us scratching our heads for a while: how to build a lean investment vehicle that reduces transaction costs, can act quickly, is big enough to be economical for us (my kids like food), and is small enough to invest in artists who have room to grow.
I think the solution is an art opportunity fund co-GP’ed by an art broker:
- A five-year vehicle
- Capital committed upfront but only called when we find something great
- The broker gets paid carry at the end rather than fees upfront
I’ve floated the idea to some investors, and we’ve already got about half the capital committed, so maybe there’s something to this idea.
If you like the sound of this and want to get involved, let me know.
Is the art market in trouble?
If you follow the art market at all, all you’ve heard from breathless pundits lately is that “the art market is tanking,” that there’s a “chill in the market,” and “choppy waters” lie ahead.
This is true in some sectors but not all.
As the art world recovers from London Frieze Week 2024, a closer look reveals a thriving art market in several areas despite ongoing challenges.
Dead white guys have been obscenely overrepresented in galleries, museums, and private collections for centuries because that’s what buyers, visitors, and collectors wanted. But that’s changing as these three pillars rush to catch up with what 21st-century patrons want. And more and more, those gallery clients, museum visitors, and collectors aren’t old white men. They want artists who look like them. Most of what’s defined as Blue Chip today is old dead white guys.
This is the reason why some markets are struggling relatively. But some segments are on fire.
Recent auctions during Frieze Week have shown strong signs of recovery and growth. Christie’s 20/21st-century Evening Sale achieved an impressive 89% sell-through rate by lot and 96% by value, totaling £81.9 million (\$107.1 million) — an 83% increase from October 2023. Sotheby’s and Phillips also saw noteworthy successes. David Hockney’s “L’Arbois, Sainte-Maxime” sold for £13.2 million at Sotheby’s, ten times its previous auction price. Emerging artist Joseph Yaeger’s debut at Phillips saw his work sell for over £200,000, far surpassing estimates.
Previously (and still) underrepresented artists like British surrealist Ithell Colquhoun are rising to the top. Ridiculed and ostracized in her time, her lifestyle, beliefs, and artwork are finally getting the respect they deserve. This reflects changing tastes, moving away from the dominance of “blue-chip” artists. There is also a growing focus on diversity, with increased demand for works by underrepresented groups, such as women and artists of color. This trend is both socially significant and financially rewarding, with artists like Colquhoun seeing substantial value increases.
London remains a key hub in the global art market, accounting for about 17% of sales, and is showing resilience in the face of increased competition from Paris, especially with the rise of Art Basel Paris post-Brexit. Industry leaders believe both cities have room to thrive, and recent successes in London demonstrate its ongoing relevance.
The market’s evolution is evident in its broadening focus. Clare McAndrew, founder of Arts Economics, notes that the current downturn mainly impacts high-end sales — those multimillion-pound deals for established artists. However, events like Frieze Week, with diverse gallery representation and varied price points, continue to play a crucial role in supporting a dynamic and accessible art ecosystem.
While some challenges exist, the art market is far from a uniform decline. Instead, value and attention are shifting to new areas. Emerging artists, underrepresented voices, and contemporary works are gaining appreciation both critically and commercially. The market is evolving, becoming more diverse and, in many ways, more accessible. Frieze Week serves as a critical barometer of its health and direction, highlighting the thriving segments shaping the art world’s future.
So what’s to like right now?
OK, so dead white guys are out. Who’s in? While I can’t vouch for the commerciality or investability of anything below, here are a bunch of artists whose work fits two requirements:
- Not dead white guys
- Art I like
BAME and Latin American artists who are reshaping the art landscape and potentially the art market.
BAME Artists
Ghanaian artist putting a fresh face on contemporary portraiture.
Boafo’s vibrant portraits celebrate Black identity with a flair that’s hard to ignore. His works have not only caught the eye of collectors but have also fetched impressive prices at international auctions. If you’re looking for an artist who’s both culturally significant and commercially buzzing, Boafo might just be your guy.
Nigerian-born, Los Angeles-based artist blurring the lines between cultures.
Akunyili Crosby’s mixed-media paintings delve into the complexities of cultural hybridity and personal identity. Her intricate works are in high demand, and major museums are scrambling to include her in their collections. Think of her art as a bridge between continents—both geographically and thematically.
British artist painting people who don’t exist—but maybe should.
Yiadom-Boakye is known for her enigmatic portraits of fictional characters. Her paintings exude a timeless quality, and they’ve secured her a spot in major museum collections worldwide. If imagination could be bottled and sold, she’d have cornered the market.
Nigerian-born artist redefining the art of storytelling through portraiture.
Odutola’s intricate drawings and paintings explore the nuances of identity and race. Her solo exhibitions at prestigious institutions have only amplified the demand for her work. She doesn’t just create art; she crafts narratives.
American artist bringing African-American history to the canvas.
Marshall’s paintings are a deep dive into the African-American experience, and collectors are eagerly taking the plunge. His works have achieved substantial commercial success, making him a staple in major art collections globally. Consider him the historian the art world didn’t know it needed.
British painter mixing tradition with the unexpected.
Ofili’s vibrant and textured works often incorporate unconventional materials—think elephant dung and glitter. Winning the Turner Prize in 1998 shot him into the international spotlight. He’s proof that a little risk can go a long way in the art world.
British artist spotlighting race, gender, and colonial history.
A pioneer of the British Black Arts Movement, Himid won the Turner Prize in 2017. Her paintings are not just visually striking; they’re conversation starters. In a market that values both aesthetics and message, she’s hitting all the right notes.
British-Nigerian artist examining cultural identity with flair.
While Shonibare works across various media, his paintings contribute significantly to his acclaim. His explorations of colonialism and identity are both thought-provoking and visually arresting. He’s the kind of artist who turns heads—and then gets those heads thinking.
Latin American Artists
Brazilian artist making abstraction as vibrant as Carnaval.
Milhazes blends motifs from Brazilian culture with modernist traditions in her colorful abstract paintings. Her works have fetched high prices at international auctions, proving that abstraction is alive, well, and potentially lucrative.
Colombian painter adding volume—in all senses—to art.
Botero is renowned for his distinctive style featuring rotund, exaggerated figures. His paintings are instantly recognizable and highly sought after. In the realm of figurative art, he’s supersized both the form and the market.
Brazilian painter unearthing the layers of history and identity.
Varejão’s works often incorporate ceramic tiles and explore themes of colonialism and cultural identity. Exhibited globally and achieving significant commercial success, she adds a unique and compelling tactile dimension to painting.
Argentine artist mapping the complexities of human experience.
Raised during Argentina’s brutal military dictatorship in the 1960s and 1970s, Kuitca is known for his abstract paintings combining architecture, theater, and cartography elements. His works represent Argentina at the Venice Biennale and invite viewers to navigate the spaces between reality and imagination.
Colombian-born artist capturing the chaos and energy of globalization.
Murillo’s dynamic abstract paintings and installations have garnered attention in major exhibitions worldwide. His works command high prices at auctions, suggesting that the art market is as intrigued by globalization as he is.
Chilean artist weaving together indigenous traditions and contemporary themes.
Vicuña’s multidisciplinary works are exhibited internationally, and her paintings intertwine poetry, politics, and visual art. She’s gaining recognition and, with it, a growing presence in prominent galleries.
Argentine painter playing with light and movement.
Associated with the Op Art and Kinetic Art movements, Le Parc’s explorations have made his works popular among collectors and museums alike. In a market that appreciates innovation and aesthetics, he’s literally lighting the way.
Mexican artist decoding identity and language through art.
Amorales’s paintings delve into themes of identity and communication, often using a visual language that challenges conventions. Representing Mexico at the 2017 Venice Biennale, he’s cemented his influence on the global art scene.
Mexican master whose legacy refuses to fade.
Though Tamayo passed away in 1991, his works command attention and high prices at auctions. His influence on modern art, particularly in blending Mexican culture with universal themes, keeps him evergreen in collectors’ eyes.
Peruvian artist confronting race, class, and immigration.
Ortiz’s provocative paintings address some of society’s most pressing issues. Her works are increasingly featured in prominent galleries, sparking conversations that many might find uncomfortable—but necessary.
One book recommendation
To dive into the themes above, check out The Story of Art Without Men.
Explore the Dutch Golden Age, the astonishing work of postwar artists in Latin America, and the women defining art in the 2020s. Have your sense of art history overturned and your eyes opened to many artforms often ignored or dismissed. From the Cornish coast to Manhattan, Nigeria to Japan, this is the history of art as it’s never been told before.
That’s all for this week; I hope you enjoyed it.
Cheers,
Wyatt
Disclosures
- This issue was brought to you by our homies at GenAI.Works.