Adding fine art to your investment portfolio
Long gone are the days where fine art was only to be enjoyed and profited by the mega rich.
Here at Global Art Platform we create customised portfolios for clients to ensure that when the invest in fine art they are given tailor made advice to suit them.
We believe that whatever your financial situation there will always be a welcome place for art in an investment portfolio and here at Global Art Platform our experts work tirelessly to make sure that all of our clients are serviced in the exact way we would like to be serviced ourselves.
Sales Process & Payments
Our sales process is truly what sets us apart from many other companies.
We make the lion’s share of our income on the exit and on a percentage of the profits our clients receive.
So on advising a client about the market we will establish a budget that he or she is comfortable with. We then begin looking to acquire and isolate a piece we believe will match the goals and objectives our client wishes to achieve.
Upon doing this we will send the details of the piece over for the client to look at and decide whether they are to take personal receipt of the work or not.
We then complete the process by giving the following options of payment; Secure card payment using PayPal, UK bank transfer to our HSBC corporate account or by cheque. Whichever method best suits the client, will be paid directly to Global Art Platform Limited.
With certain suppliers who Global Art Platform use to source Fine Art our clients may be prompted to pay the supplier direct when this is the case funds will be send to a FCA registered custodian where the funds will be held to purchase the piece but the contract of sale still remains with Global Art Platform Limited.
From this point the piece will be delivered to the predetermined location and the initial sales process will be complete you will then receive your receipt of purchase and where applicable a certificate of authenticity which will be sent to the address on the signed contract.
Investment Grade Art Categories
With the stock market you have categories of how well established a stock is, and the art market is no different.
Fine Art Investment is widely split into 3 Categories:
Blue Chip – These are the likes of Andy Warhol, Salvador Dali, and Pablo Picasso etc. These artists have stood the test of time and have solidified themselves in the history of art.
Mid-Career – These are artists that have had recognised sales and are on the up in the art world gaining the attention of seasoned investors and art experts.
Emerging – These are artists that are at the start of their career, these artists can reach the highest yields in a shorter time frame but are naturally a bit more risky. This would be like investing in an IPO or a company inside the first few years of trading.
Here at Global Art Platform we like to accommodate all of the above depending on our client’s budget and attitude to risk. We have a range of artists spanning all spectrums to accommodate anyone portfolio.
Limited Edition Prints
When it comes to the term “prints” most people think of a copy of the piece as having little or no value. This is a misconception that is simply not true. More prints exchange hands than any other type of art and these are as likely to make money as an original.
A limited edition print run is a set number of prints created from a plate that is an exact impression of the original piece in question. There is a guarantee that after the set amount, for instance 25 have been made, that there will never be another print run of that individual work of art. This in turn is a way of limiting the supply and making sure the piece is not devalued. Most artists will also number the edition e.g. 6/25 to show the exact number that you own.
Limited edition prints are made in a number of ways depending on the time and style of the piece itself. For instance newer pieces are generally produced via methods of photography sometimes by the hand of the artist themselves, older works would have been produced using methods such as etching or lithography to create prints and once the desired number of the edition had been reached the template for that particular print would have been destroyed making further production of that piece impossible.
An artist is just one person so if he or she is in high demand you can rest assured that they would not be able to fulfil the demand for their work and for this reason the limited edition print market is very lucrative.
If created by the artist themselves these are still considered to be originals and not to be confused with copies.
As you can see from our market page, the art market has consistently performed extremely well for a large amount of people over the years and this is not due to one reason alone.
For centuries now art has played a part in the backbone of some of the globe’s largest corporations assets and this is because Fine Art is considered to be a steady investment.
Its non-correlation to other markets means it is a fantastic tool to diversify a portfolio and spread risk.
Global market’s are affected by external factors such as war, political unrest and more recently Greece’s debt crisis which sent stock markets crashing and with the U.K referendum looming it may be wise to look into non-correlated assets such as Fine Art which will not be directly affected whatever the outcome.
Whatever the result of the referendum is it will most certainly have an affect on all major markets both before and after the vote.
Our dedicated team work tirelessly to ensure that the pieces we advise our clients to invest in are of the highest quality and that all relevant checks are executed in regards to validity and providence of the piece in question.
Global Art Platform will only advise on pieces that we believe will have the desired effect of increasing in value. This is reflected in how Global Art Platform makes the Lion’s share of its income by charging 10% on profits made on acquisitions under £100,000 and 7% on profits made on acquisitions over £100,000.
Because of the way Global Art Platform makes the Lion’s share of its income (a percentage of the profit on sale) it is imperative that we source the piece at the lowest possible price and sell at the highest meaning that Global Art Platform and the investors interest in the market are aligned.
Taking all of the above into consideration our team have one consideration in mind isolating pieces of Fine Art with strong potential to increase in value over the mid to long term. Sticking to this strict strategy means that we cannot always accommodate personal aesthetic taste, Global Art Platform concentrate on the business of Fine Art as an investment and not pleasure. however if both are achieved then fantastic.
Physical & Online Galleries
With the number of purchases in the art world increasing it’s no wonder that the number of both online and physical galleries are shooting through the roof.
This is good news for everyone as it shows a clear and evident reassurance that the market and demand are growing and that there is money to be made in this market. Galleries essentially ‘invest’ into art in much the same way as our clients do. They buy the pieces from a source and mark up the product to sell onto a client, thus creating profit.
The issue with buying through a gallery is that the works have already had a lot of their margins taken out by galleries themselves meaning a desirable rate of return will take much longer.
This does not mean though that in some cases, we may be able to sell one of our client’s pieces off to a gallery at a profit if they believe they can still achieve more for it.
Supply & Demand
Most markets are dictated by supply and demand, the art market is no different.
In layman’s terms if you have an item or product where demand outweighs supply, you can be quite certain that you will see an increase in value.
The only thing that will affect your position is more supply, which in turn could saturate the market you are dealing in thus making your product or item less valuable.
Artists are very aware that saturation of their art can devalue their brand. For this reason they are extremely cautious as to how much of their work is published always making sure that the demand by far outweighs the supply.
Another example, if you were to invest in an Andy Warhol, Salvador Dali or Picasso all of which have represented fantastic returns over the past the few decades, it would be impossible for there to be any saturation, the reason being they are all deceased and cannot produce anymore work.
Be vigilant of fakes
It is no secret that art, along with many other industries that make a sizeable profit have experienced fakes in its history.
Han van Meegeren famously sold $60 million worth of fake Vermeers to everyone from Hermann Göring to the government of the Netherlands.
When investing into this asset class it is crucial that you can trust the company that you are working with. All pieces bought through ourselves will come with:
- Certificate of Authenticity (where available)
- Proof of purchase
When investing into art this is a specialist field, so where there are new online and retail galleries opening all the time, it is of high importance that you choose a company that specialise in this field.
To fall in line with our business strategy of making money when our clients sell, it is in our best interest to be conscientious in ensuring the authenticity of the work we offer.
At Global Art Platform we state in our contract details that we want first refusal if you find a buyer for a piece of art acquired through us simply because we may believe we can get a higher price for your piece over the short term.
Global Art Platform make a percentage on exit and only on profit generated. We are a performance related brokerage meaning the more our clients make the more we make.
We aim to keep the sale of a client’s art in house and sold privately meaning there are no hammer fees as charged at auction making it much more profitable for the investor.
Why we are worth our percentage of the profit on exit:
As a performance related brokerage that makes percentage on exit and only on the profits, it makes perfect business sense that we sell you out at the highest possible price to maximize our profit. This also means that we are obviously going to get you involved at the lowest possible price again to fall in line with our business strategy.
As a tangible asset fine art can be sold at auction, gallery, or privately giving the investor numerous exit avenues.