The Do’s and Don’ts of Contemporary Art Investing

Hello and welcome to Art Insider for April 21st, 2022 – FREE Edition.

Today, we’ve prepared another issue by Nicholas Shorvon, our favorite art investment expert and advisor.

He explains the Do’s and Don’ts of buying contemporary art by young artists, and offers you the best investment strategies.

Let’s go!

How to find and buy a young contemporary artist’s work

This article is to help advise you if you’re buying to own long-term, and you’re looking for a good investment.

The art market is really a series of niche marketplaces, and be aware: the ‘young contemporary’ primary marketplace (speaking purely in investment terms) is at the riskier end of the art market spectrum.

However, sometimes you can buy something for £10K and see a similar piece by the artist sell a year later for £150K.

Ewa Juszkiewicz is a good example of this – a 37-year-old artist from Poland (where she still lives and works). Her works have been going for nearly 10x their estimates.

Girl in Blue. Estimate of $80,000 – 120,000, sold for $730,800 at auction last November.

How to find an artwork

The first step is to go to a showcase gallery where you’ll get the chance to see lots of young artists’ work, all in one place.

I’m based in the UK, so a good one here is the Frieze contemporary young galleries/artist’s section at their fair (Frieze Focus).

London’s Frieze Focus is devoted to young galleries and showcases the most exciting emerging artists, such as Sin Wai Kin

If you are based elsewhere, find the nearest contemporary art fair, and then explore their young gallery sections.

Remember: the most successful buys happen when you catch a great young artist early, at a great gallery. This article offers you the best, simplest system of doing that.

A gallery being invited to the fair means important people in that fair’s country have noticed the gallery and respect it. The fair will have curated a list of good up-and-coming galleries for you, so, to an extent, they will all be back-able.

Once at the fair, find the gallery that exhibits the artists’ work you like the most. Introduce yourself, say you really like the work and that you’d like to visit their main gallery. Arrange a time the owner can meet you there and show you the artists’ portfolio.

If it’s a smaller art fair, there might not be a section for young galleries, in which case – focus on galleries resident to the host country, and work the same way: find which gallery has the work you like the most and then go and visit it.

Most private (commercial) galleries are free so you can just make a list of the ones you like the look of and go and wander around when you have time. The best way to get your eye in is to see lots of art.

Talk to gallery owners about the artists you like most. They are the world experts on these artists and will be happy to educate you on all aspects of their career to date. Don’t be afraid to ask lots of questions and don’t be afraid to ask how much each work is.

The rules

There is one rule – no flipping.

Why?

Recently, it has been very noticeable that a great many of the young artists who have started to break through (and who are now being represented by the biggest blue-chip galleries) are seeing their work going to auction at the biggest auction houses’ contemporary sales.

Strangely, these auctions are being front-loaded by these young artists born in the 90s/80s! (Mostly from an underrepresented demographic). Their work is being sold for way over the estimate and, unusually, in the same auction, established (safe) blue-chip artists (who have had major shows in big institutions / are owned by major institutions/galleries around the world / have a long-published auction history) are being listed in the middle and end, and performing average at best.

This is really suspicious, and I warn you not to get involved in the next auctions or try and simulate this behaviour. I don’t know what’s happening but it’s usually bad for the artists (warning from history, zombie formalism). This is also bad for the artist’s gallery, and it has the potential for a rug-pull and destroying their career.

I mean, it’s an economic term using the word “Zombie”. Surely worth a click.

If you flip from the primary market, you will be black-listed and will only be able to buy one piece. The gallery may well end up buying back your piece from auction and will be furious that they had to. They control the price and try to get the artist to break through. They are your best asset because their interest in the artist “making it” is much bigger than yours.

Breakthrough Artists

These are the artists who are breaking through as we speak, and among this list are likely the next superstars. But, at the same time, it’s important to note that this group displays some of the auction results I referred to previously, which seems a little irregular and can make the artists worth avoiding (for now).

If you click on the links below, you will see how recently, despite their age, a lot of them have been front-ended in contemporary sales at auctions (ahead of blue-chip artists), which is unsettling enough that I’m avoiding them, even if they have far exceeded their estimates.

What can we learn from this?

Well, quite a few of these artists have just recently moved from up-and-coming galleries to blue-chip ones; others are at smaller galleries who are thriving and are on their way to becoming blue-chip. In most cases, the work was available a few years ago at a fraction of its current value.

This article is trying to help you find the next great ones, rather than the artists below, whom I wouldn’t advise chasing due to the strangely handsome figures they are auctioning for (and bear in mind that people who sell the work at auction have likely bought a lot of other works that haven’t performed so well).

But the point here is that you could have found them two years ago, had you followed this system. The most successful buys are when you catch a great young artist at a great gallery.

That said, here are some of the young artists who seem to be breaking through to the next level (some already clearly have):

KOJO MARFO (B. 1980)

Chief and his Calabash. Estimate of £10,000, sold for £47,880

ISSHAQ ISMAIL (B. 1989)

Facade 4. Estimate of £10,000, sold for £94,500

MICHAEL ARMITAGE (B. 1984)

Ewaso Niro. Estimate of £3,000, sold for £47.880.

FLORA YUKHNOVICH (B. 1990)

Study of Putti. Estimate £40,000, sold for £302,400

TSCHABALALA SELF (B. 1990)

Partners. Estimate 450,000 HKD, sold for 1,386,000 HKD.

JADE FADOJUTIMI (B. 1993)

A Cropped Perspective of This Whirlwind Effect. Estimate of £150,000, sold for £627,500

ABOUDIA (B. 1983)

Haut les mains (Hands up). Estimate of £30,000, sold for £378,000

LAUREN QUIN (B. 1992)

Airsickness. Estimate of £30,000 – 50,000, sold for £441,000

CINGA SAMSON (1986)

Lift Off. Estimate of 50,000 – 70,000 GBP, sold for 321,300 GBP.

ISSY WOOD (B. 1993)

Chalet. Estimate £100,000 – 150,000, sold for £441,000.

AVERY SINGER (B. 1987)

European Ego Ideal. Estimate of $1,500,000 – 2,500,000, sold for $4,023,000

SALMAN TOOR (B. 1983)

The Arrival. Estimated $60,000 – 80,000, sold for $867,000

RACHEL JONES (B. 1991)

Spliced structure (7). Sold for £910,750 inc. premium.

How to invest in a breakthrough artist

I’ve already shared how to find a good prospect, but here is a summary:

  • Buy what you like. Remember, if you like it, chances are other people will do too.
  • The sweet spot is to find a great young gallery representing a young artist you like.
  • Buy with a plan for a long-term hold – don’t flip young contemporary, especially if you’ve bought from the primary market.
  • Avoid the secondary market for young artists.
  • If you see prices rocketing and want to exit, the responsible thing to do would be to approach the gallery that sold you the work in the first place – they may find a buyer on your behalf (for less commission than the auction house).

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Author

Stefan Von Imhof

Stefan Von Imhof

Stefan lives and breathes asset analysis and valuations. Before founding Alts, he was the Head of Product at Flippa, he created and ran Flippa's Due Diligence Program, and has bought & sold dozens of websites & newsletters. Prior to Flippa he was the first product manager at HG Insights, a market intelligence company which sold to Riverwood Capital Partners. Originally from Boston and later Santa Barbara, CA, he now lives in Australia with his wife & Boston Terrier, Charlie.

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