Buying art is always a question of considering both aesthetics and financial investment, though you do always have the physical or electronic art work left to behold, unlike paper investments where worthless means literally that you end up with nothing.
It is also generally a lot more fun shopping around for a piece of art than many other investments. At their best artists are purveyors of curiosity and imagination as well as beauty, and the galleries magnificent spaces.
Try visiting the 53 warehouses in Al Quoz’s Alserkal Avenue during Art Week, which has begun in Dubai, and you will see what I mean.
The latest uber-cool space called ‘Concrete’ was only finished this Wednesday, just in time for a fine exhibition, Syria: Into The Light, a survey of 20th century Syrian painting featuring 40 artists active between 1924 and last year.
That said if serious money is involved then finding the right art adviser is just as important as if you were buying shares and need a knowledgeable stockbroker to help you avoid obvious errors.
Just because something looks beautiful does not mean it will rise in value, or even be saleable in the future. The name and reputation of the artist counts for a great deal and unless you spend a lot of time and effort on research you are unlikely to match the insight of a professional who does this for a living.
Personally I find it easier to look at the Middle East as a region for art investment than to consider actual individual artists. Here I can smell the air and sense an opportunity.
It’s less a matter of noting beautiful art than feeling a market that is somehow maturing and reaching critical mass, and that’s the sort of development that can mean a major escalation of value in art.
For example, this week saw the announcement of Dubai’s first privately-owned art gallery for the public, Jameel Arts Centre, set to open in 2018, a functional 10,000-square-metre, three storey complex to be built in the Culture Village on the banks of Dubai Creek.
President of Art Jameel, Fady Mohammed Jameel, also revealed a partnership with The Metropolitan Museum of Art in New York, where it will advise on art acquisitions for The Met from this region.
Indeed, it has already done so with the first two works chosen and partly paid for by a generous donation from the Jameel family. Why would they do that?
Well advancing the reputation of Middle Eastern artists is clearly a philanthropic act, though if you are also a major collector of their work then there could be a long-term payback in terms of an increase in the value of such assets.
Clever art investors with big budgets not only consider the intrinsic aesthetic worth of what they are buying but also how to add value with public relations and celebrity endorsement.
And there is no bigger celebrity in the art world than The Metropolitan Museum of Art, although Art Jameel does have existing collaborations with London’s Victoria and Albert Museum and the Prince’s School of Traditional Arts.
There is absolutely nothing wrong in doing this. It’s actually a mark of the growing sophistication of the Dubai art scene, just over a decade since the launch of Art Dubai as a rather modest regional fair.
It’s not the greatest show on earth but you won’t find better in the Middle East, and it has done a great deal to put the region on the map for international art investors who travel here specially for this event.
Strolling around the exhibition I liked the huge computer generated screen images that change as you approach them at the TeamLab stand; US$35,000 for the computer and screens, and $100,000 for the algorithm producing the picture.
Elsewhere the ‘Dark Lens’ of Cedric Delsaux placed AI robots in two night scenes from downtown Dubai for considerably less money.
So is this a good time to buy? It could be as the global art market has topped out, and remains much quieter than in recent years. There are even tales of big losses by some investors.
Russian billionaire Dmitry Rybolovlev this month sold a painting by Mark Rothko for $13 million, the last of five he auctioned at Christie’s with total losses of about $150m over 18 months.
Experts are not sure exactly why he decided to sell into such a weak market. Rybolovlev bought the works, including Gaugin, Klimt and Rodin, with the assistance of a Swiss dealer who he has since sued for damages.
Dubai is not yet a market for art with this sort of value. But to be up-and-coming in the art world is usually a profitable place to be.
However, choosing something you enjoy looking at is far easier than recognising a great art investment.
Peter Cooper has been a financial journalist in the Gulf for two decades.
business@thenational.ae
Follow The National's Business section on Twitter
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Ain Issa camp:
- Established in 2016
- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
- Most from Deir Ezzor and Raqqa
- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Expert advice
“Join in with a group like Cycle Safe Dubai or TrainYAS, where you’ll meet like-minded people and always have support on hand.”
Stewart Howison, co-founder of Cycle Safe Dubai and owner of Revolution Cycles
“When you sweat a lot, you lose a lot of salt and other electrolytes from your body. If your electrolytes drop enough, you will be at risk of cramping. To prevent salt deficiency, simply add an electrolyte mix to your water.”
Cornelia Gloor, head of RAK Hospital’s Rehabilitation and Physiotherapy Centre
“Don’t make the mistake of thinking you can ride as fast or as far during the summer as you do in cooler weather. The heat will make you expend more energy to maintain a speed that might normally be comfortable, so pace yourself when riding during the hotter parts of the day.”
Chandrashekar Nandi, physiotherapist at Burjeel Hospital in Dubai
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
More from Neighbourhood Watch
Killing of Qassem Suleimani
RESULTS
5pm: Handicap (PA) Dh70,000 1,400m
Winner: AF Tathoor, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm: Handicap (TB) Dh70,000 1,000m
Winner: Dahawi, Antonio Fresu, Musabah Al Muhairi
6pm: Maiden (PA) Dh70,000 2,000m
Winner: Aiz Alawda, Fernando Jara, Ahmed Al Mehairbi
6.30pm: Handicap (PA) Dh70,000 2,000m
Winner: ES Nahawand, Fernando Jara, Mohammed Daggash
7pm: Maiden (PA) Dh70,000 1,600m
Winner: Winked, Connor Beasley, Abdallah Al Hammadi
7.30pm: Al Ain Mile Group 3 (PA) Dh350,000 1,600m
Winner: Somoud, Connor Beasley, Ahmed Al Mehairbi
8pm: Handicap (PA) Dh70,000 1,600m
Winner: Al Jazi, Fabrice Veron, Eric Lemartinel
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
