By Madhusree Chatterjee, IANS,
New Delhi : Investment in art continues to be robust globally despite the credit crisis in other financial sectors. And India is reaping the benefits of the boom as it tries to emerge as a mature market, says art investment guru Phillip Hoffman.
“The art market continues to perform strongly, exhibiting long-term growth year after year,” Hoffman, who is in his mid 40s, told IANS in an exclusive e-mail interview from London.
Hoffman, the chief executive of the Fine Art Fund Group, which is the first fund to invest in art as an asset class worldwide, is launching the Indian Fine Art Fund to cash in on the demand for Indian art by investors in the global market.
“We at the Fine Art Fund Group believe there is a high level of creativity and talent in India, which is going to make this market move even further; and with continued global exposure in 2008, we think it is the right time to invest in Indian art,” Hoffman said.
The art fund pioneer, who was the youngest member of auction house Christie’s International Management Group at 33, is also credited with setting up the Fine Art Fund II and the Chinese Art Fund. He has been associated with funding and investment in international art for the last 18 years.
The current size of the global art market indicates the volume of investment it is attracting, says Hoffman who is visiting India next month to address the India Art Summit-2008.
“It is estimated that the size of the art market is $3 trillion with an annual turnover of $30 billion. However, as the market becomes more global, some predictions claim that the annual turnover will rise to $100 billion by 2012,” Hoffman said.
India, however, said Hoffman, was still in its emerging phase. “The size of the market has grown from $2 million to approximately $400 million in seven years alone,” he said.
An expanding buyers’ base is triggering the investment boom in Indian art. In the past, Indian art was purchased by rich Indians in the country and non-resident Indians abroad.
But it is now finding investors overseas, thanks to the spurt in the international exhibitions and global auctions of Asian art, Hoffman explained.
“However, we believe that the demand for Indian art is continuously growing and that the market has not yet matured. An international fair of Indian art can help boost the growth rate by directly involving the galleries and artists alike, getting collectors and investors on site. And thus generating general interest,” Hoffman said.
The Fine Art Fund Group chief believes that modern and contemporary Indian art had been undervalued as compared to other areas of the art market. But with the boom in the financial markets, real estate and other asset classes in India, many new art collectors are establishing themselves and purchasing works from artists of similar heritage, Hoffman said.
The Indian art scene, feels the investment honcho, is already global in a sense.
“It continuously attracts international buyers, dealers and auction houses. Indian art is well represented by galleries worldwide and is closely followed by collectors and investors alike. I think there is much room for growth in the Indian art market.
“Prices are rising and are much higher than they were, say, five years ago. However, compared to Western contemporary art, there is potential for a hike in prices,” Hoffman said.
Much of the investment boom in Asian art has been prompted by a new wave of investors, which includes buyers like India, China, Russia and the Middle East.
“These new geographical segments have made a powerful entrance by bringing both new artists and investors in the market,” Hoffman said.
The boom in investment and growth in the country’s art market is here to stay. “It has never been affected by recession so far and has proven to be a very stable investment option with a positive history,” Hoffman said.
According to him, the market correction of the early 1990s, which followed the art market boom of the late 1980s, was largely due to the entry of Japanese buyers, who used the market for purposes of money laundering and tax evasion.
The Japanese investors bought art works en masse and dumped it back into the market creating an artificial high.
“But that boom could not be sustained. Now, the art market is global and as such cannot be affected by any single group of buyers or investors,” Hoffman signed off, predicting a steady road ahead for investment in Indian art.