When you think of an art collector, your mind will probably point to high finances, aristocratic mansions by Lake Como or fancy apartments in Hong Kong. With a reason. According to a study of ArtNews (“The top 200 collectors”, 2017) 40% of collectors are related to finance. In addition, more than half are Americans, followed by Europeans and Asians, being the latter a booming investment.
Hard to relate to that, right? It only feels right to call yourself a collector if the word Thyssen is somewhere between your first 5 family names. The reality is often not so. Although collecting art at the highest level is certainly not a cheap hobby, there are professionals and people from medium up socio-economic levels who prioritize approaching a gallery rather than buying a new car. Also, emerging art collectors are key to the art market in most places.
80% of the art market is distributed every year among USA, UK and China. However, in countries like Spain its volume represents approximately 1% worldwide. In such small markets, small and medium collectors are the base of the art market. They are a white blackbird for galleries and dealers, who must focus their efforts to build loyalty and expand their base.
In the last years we are seeing new and interesting initiatives to promote the purchase of art among young emerging or even uninitiated collectors. In its latest edition, ARCOmadrid rehearsed the #mecomprounaobra #ipurchaseanartwork) program, where people not necessarily linked to the world of art chose and shared in their social networks pieces of prices not exceeding 2,018€.
So if you are an emerging art collector, we have some good news for you. The art market needs you and would love it if you would come and visit.
Emerging art collectors, are they all created equal?
Definitely not. There are differences in the approach and the drive behind the decision to collect. Several studies reveal an interesting generational division between the more traditional collectors – still driven by knowledge and aesthetic pleasure – and the new generation of collectors, increasingly interested in how art behaves as a capital asset.
Currently, the new generation of collectors already looks at the financial implications of buying a work of art. According to a study by Hiscox, the commonly called millennials buy art for 3-5 years (33%), spends less than 1,000$ a year (40%) – although 33% invests in works between 5,000 and 10,000$-, and they plan to buy more works next year (63%).
If you are planning to become one, you should start figuring out what type of collector you are. Are you traditional or “new generation”?
7 tips for emerging art collectors
Since collecting art can become and addiction, a few tips will surely come in handy:
1. Set a budget
As in any milestone the most important thing is to set a budget and not get carried away at the moment. In the case of an online gallery, you can easily access the catalog to know about each work and artist, and that helps to limit a budget. In an auction, it is much trickier, as you might need to see the exhibition open to the public prior to each auction to analyze and assess the pieces.
2. Study the space and conditions to exhibit or store the works
The artworks must be pampered and treated to last as long as possible in the best conditions, so study the space you wanted to reserve for your works: if they are next to a window with lots of light, if the air conditioning directly gives the area, the installation of lights for wall works, etc.
3. Don’t buy unless you know the artist
Purchasing an artwork is a bit of a leap of faith. Knowing if a work will increase its value over time is not a sure thing. However, knowing the artist’s path, if he/she has cohesion in his/her style and work, are factors that help you being more comfortable with the decision of the purchase.
4. Surf the net to discover new artists
Emerging art collectors use Instagram to discover new artists and works to invest in. They use it to get to know the artist more, see their daily work or connect with other art market agents, such as galleries, investors, fairs or dealers. It is also thanks to the fact that most of art galleries actively use social networks.
5. Know how the different purchase channels work
Auctions can work in different ways. They can be over the telephone, written, face-to-face and online, and always stressful. In the case of galleries, purchases can be made on site or electronically, in a much more relaxed and pleasant way.
6. Keep an eye on the investment…
New collectors know that art gives them profitability while they can enjoy it every day in their living room, kitchen or office. This cannot be done with other types of financial assets, more intangible.
Younger collectors have a much more financial mindset and see art collecting as a way to accumulate wealth. They are less likely to see art as a risky investment. They expect a sustainable appreciation of the price in the future, probably because they have not experienced major crises such as the setback of the early 1990s. New collectors are more willing to use their art collection as a loan guarantee to take advantage of strategic investment opportunities, or even to acquire more art. Therefore, it is important that financial and tax advisors help mitigate assess the financial operations they are making to lower the impact of state taxes.
7. … and another on the philantropy
Emerging art collectors are very socially committed to the new globalized economy of the art world. The youngest of art collecting see this as an important means for social and political promotion on an international stage.
Art is among the most emotional assets a collector has. Traditional collectors have more predilection for their art than for their stocks and goods. Although art has not historically been seen as a financial asset, this mentality is changing for younger and newer collectors.
Younger art collectors are more likely to give their art to non-profit organizations. In contrast, more traditional collectors are much more likely to give their art collection to the family.
Becoming and emerging art collector and building your dream art collection is possible. We welcome you to start here!