Of course, the array for amateur and “investor” collectors is much wider than that for art fund managers. It’s hard to say where investors diverge in taste from passionate collectors because sometimes it can be one of the same,” says Zand. “An aspect of our advisory is to collect the best of an artist’s work, the best period and the best quality in each category. “We continue to see impressive prices in the sale room with significant liquidity and participation at every level of the art market,” she adds.įor Roxane Zand, director of the Middle East department at international auction house Sotheby’s, keeping it safe lies in collecting blue chips. Isabelle de La Bruyere, Middle East director at Christie’s, says the art market has shown stability and resilience to the wider economic environment, while other markets have not. “If you have a $3 billion portfolio, it’s not a bad idea to have $15 million invested in art… When real estate bubbles burst currencies fluctuate, a Tintoretto is still a Tintoretto,” says Barakat. Still, it is the dependable value of well established art that banks and financial investment companies bet on to hedge against risk. “When times are tough, art funds are as risky as stocks and bonds to investors,” says Odille.

Requiring a relatively low minimum commitment of $100,000 for its “Middle Eastern Fine Art Fund,” Addax Bank advises newcomers to invest no more than 5 percent of their net worth into art.Īccording to art consultant and artistic director of the 2011 Menas art fair, Pascal Odille, the conservative approach is due in part to the way these funds are devised with a short-to-medium term artwork resale in mind, which is unlikely to be profitable during an economic downturn. “An increasing number of financial institutions are regarding art as an alternative asset class, providing a hedge against inflation and also proving to be a relatively good store of value, particularly in the current climate of uncertainty,” says Michael Jeha, managing director at Christie’s Dubai.īut while art is gaining favor as an aesthetically appealing asset class for high net worth Arabs, institutions such as Addax Bank, the regional representative for the Fine Art Fund group, still hold a cautious stance on passion investments. In early 2011, Emirates NBD partnered up with the Fine Art Fund Group to include art advisory services for high net worth individuals with wealth of more than $3 million. In 2007, Daman Investments, the Dubai financial services company, set up a five-to-seven year, $13.6 million contemporary Middle Eastern art fund. Capgemini and Merrill Lynch’s 2010 world wealth report states that the uncertainty of financial markets has led to a new breed of “investor-collectors” who are pouring their money into tangible items with long-term value.ĭubai, which anchored itself as the Middle East and North Africa region’s art capital after international auction houses Christie’s and Sotheby’s set up shop in the emirate, is already fostering tentative but burgeoning efforts by Emirati financial institutions to include art in their investment portfolios. “Financial markets are shifting from a multi-decade cycle of being overexposed to paper assets, toward a new cycle of investing in real assets such as real estate, gold, silver and collectibles such as art and diamonds that have no expiry date,” said Khaled Samawi, owner of Dubai-based Ayyam gallery. But Barakat probably realizes, just as much as anyone who has tapped into Middle Eastern art recently, that the market is following a global trend away from volatile stock markets, and into “passion” investments. He may be a business-savvy art connoisseur with a scholar’s comprehension of modern Arab art, a buyer for the London-based Fine Art Fund Group and a founder of Lebanon’s Agial gallery, but Saleh Barakat will gladly “kick people out the door” if he is asked to tip them on the next big art investment.

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