In 1960, renowned Italian art collector Count Giuseppe Panza di Biumo complained bitterly that the US$3,500 price tag for the Robert Rauschenberg painting, Winter Pool, was far too high. The Count demanded the dealer, Leo Castelli, reduce his price to US$2,000, but Castelli declined, noting that demand for Rauschenberg’s paintings was strong because, along with Jasper Johns, he was now considered the best painter of the younger generation.
Essentially, Castelli’s message to the Count was simple; I’ve got something you want – make a decision. Count Panza di Biumo bought the painting.
Winter Pool sold through Sotheby’s in 1988 for US$3.4 million – a compound annual growth rate (CAGR) of 27.85%.
Finding the next big thing
The best investments in contemporary art have almost always been made in the primary market. The number of times I have been asked to find someone the next Brett Whiteley or Andy Warhol surpasses the number of hot dinners I have enjoyed.
The benefit of hindsight is obviously a wonderful thing, so as a case study, let’s consider contemporary artist Chen Ping. Hand in White Reaching out to Her in Red (illustrated below) was purchased for $15,000 from Chen Ping’s recent sell-out Sydney exhibition. As it stands, Chen Ping’s current auction record is the same as Damien Hirst’s was in 1991 when Saatchi commissioned the now infamous Stuffed shark for £50,000 – zero! If Hand in White were to be offered at auction today in the Australian market, would it sell for $15,000? Probably not. So why is this work a strong investment play?
The lack of auction record is simply due to the fact nothing has been offered for sale by this artist. An auction house, particularly in Australia currently, will state this artist is untried and untested in the secondary market and therefore wouldn’t warrant higher estimates. Couple this with the fact that on the rare occasion that works are offered for resale, they are facilitated privately due to demand for the work – hence the sell-out exhibitions. A consistency in the primary market is just as important for investors to monitor as the activity in the secondary market.
Cheng Ping
We then have to look more closely at Chen Ping’s CV. Classically trained at the Guangzhou Academy of Fine Art, he has established a regular exhibition calendar which sees his work represented in the USA, China (Beijing, Shanghai and Hong Kong), Singapore, France and Australia. In 2008, his work was exhibited at a major show held at the Guangdong Museum of Art, a work from which was acquired by the Museum. He also has work held by the White Rabbit Collection in Australia.
In 2010, a major article on his work was published in Asian Art News drawing parallels between Chen Ping’s work and that of the renowned British painter Francis Bacon. In 2011, Chen Ping was exhibited by his New York gallery, Tally Beck, at Scope Basel as part of the highly prestigious Basel Art Fair and was exhibited as part of a major group show with his Shanghai dealer – Pearl Lam. In that exhibition, Chen Ping’s work was exhibited alongside works that are priced in excess of US$400,000.
Significantly, Pearl Lam will also exhibit a solo Chen Ping show as part of Asia One at the 2012 Hong Kong Art Fair. When it comes to Chinese art, Pearl Lam, for some background, has the ear of Charles Saatchi – the famed art collector and gallery owner – so the sphere of influence is extraordinary. All the while, Cheng’s work has been increasing in price and selling consistently well. In 2005, works of similar scale were on the wall at $7,500.
The investment potential
Clearly, there is potential: Cheng’s classically trained; held in institutional and key private collections; attracting the attention of the arts media; significant dealers are involved in his work and career; and he’s exposed to a truly global market.
The big question though is will it be realised? Only time will tell, but the above and the consistency in selling exhibitions both domestically and internationally suggests that it’s a good start.
Will Chen Ping’s work be selling for millions of dollars in 10 to 15 years’ time as Francis Bacon’s has gone on to do? I don’t know, but certainly it is feasible and realistic to suggest that he has the potential to rival the prices of his contemporaries at the recent Pearl Lam exhibition.
Those who have made sound investments in contemporary art have typically purchased well in the primary market. The $8,000 paid for a painting by Australian artist Del Kathryn Barton at her Melbourne show in 2005 now sees those works trading in the auction rooms for upwards of $40,000. And then there was her record auction price move from a mere $800 (2006) to $192,000 set in 2011 through Deutscher and Hackett. Don’t forget that at auction, you have decided to pay more than anyone else in the room for that work.
Long-term investments
The other thing to note about the very successful collectors / investors in this space is the term that they have typically held a work – something that is STILL all too often underestimated in the Australian market. Spreading the risk across a handful of artists is also a key. And, of course, the golden rule is that the investment lies in the quality.
Discolsure: Al Bailey is the executive director of Art Equity, Chen Ping’s representative gallery in Sydney.
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