ART MARKET RECESSION
At least for now, the US has managed to avert a complete collapse of the banking system permitting the press breathing space to ponder the potential impact of the financial crisis on businesses and individuals around the world.
How will the art market fare? The views are mixed.
From Indian art galleries to billionaire art collectors noone in the art market will be immune from the fallout claim some observers. Prices will alter, collections will change hands, art businesses will consolidate, change strategy or move. Others point out that art indices such as the Mei Moses index show that art has a low correlation with stock indices. But can you rely on art indices when art as an asset class is so illiquid and non homogenous compared with stocks goes the counterargument. According to Philip Hoffman of the Fine Art Fund a third of investible art assets is in the hands of just 20 or so very wealthy collectors providing some price protection. However others point out that the market is splitting and the upper end may have a different outlook to the lower end.
Time will tell how events will unfold but in the meantime some press sources have started to report stories hinting at what they expect ahead.
Impact on Indian galleries – Time
It is easy to be dazzled and forget for a moment that India’s markets, like those around the globe, are in the throes of financial turmoil. But even here, worries are starting to surface reports Time. Mumbai is India’s financial capital, but it’s also the center of the country’s booming fashion industry and contemporary-arts community. Those three worlds feed each other here, just as they do in London, Tokyo and New York. As the markets plunge – the main Mumbai index, the Sensex, is down 36% since January – many of Mumbai’s wealthy financiers are beginning to spend less in the city’s galleries and luxury boutiques. “I’m extremely worried,” says Jai Bhandarkar, owner of an art gallery in Colaba, one of Mumbai’s toniest neighborhoods. “The spending power of the people who collect art is going to be affected. The art market has already gone down so much.”
The fate of Lehman’s art collection – Artinfo
Artinfo : When Lehman Brothers filed for Chapter 11 bankruptcy on Monday, it left out Neuberger Berman, its giant asset management unit and, according to Artnet, one of its “few profit-making divisions in recent months.” The investment bank is now taking bids for the unit – which includes an impressive corporate art collection – with five private equity firms reported as possible buyers: Kohlberg Kravis Roberts, Hellman & Friedman, Clayton Dubilier & Rice, Bain Capital, and CVC Capital Partners.
Neuberger Berman was cofounded in 1939 by Roy Neuberger, whose name also graces the Neuberger Museum of Art in Purchase, New York, established with the help of Nelson Rockefeller in 1974 so Neuberger could show off his collection. Neuberger Berman has had a fund since 1990 to buy works from “emerging to mid-career artists, with an emphasis on the former,” according to a press release for a 2004 touring show. That exhibition, “Crosscurrents at Century’s End: Selections from the Neuberger Berman Art Collection,” included pieces by such artists as Marlene Dumas, Andreas Gursky, Takashi Murakami, Neo Rauch, and Sam Taylor-Wood.
The firm is now reported to have some 600 works in its collection, which is displayed in its offices worldwide. It remains to be seen whether the new owner will keep the collection intact or sell the pieces off while the art market is strong.
Billionaire art collectors not immune – uTV
It is unlikely that art will retain its value in the current slump, despite the record-breaking Damien Hirst sale earlier this week says UTV Business News. This will come as a shock to Donald and Doris Fisher, the founders of the Gap clothing chain who returned to the Forbes Rich list in joint 377th place – on $1.3bn – thanks to their $1bn art collection which includes pieces by Chuck Close, Richard Serra and Alexander Calder.
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