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Skate's Art Investment Review Transparency For The Global Art Market Since 2004 www.skatepress.com 155 East 56th Street, 4th floor, New York, NY 10022 USA /phone: +1.212.514.6010 Skate’s Art Investment Review 2011 Annual Art Investment Report In this Issue: IntroDuction ...................................................................................................................................................... 2 Table 1 Skate’s Top 30 Art Industry e-Commerce Leaders, Technical Merit ............................................... 5 Table 2 Skate’s Top 5 Art e-Commerce Leaders to Watch ........................................................................... 8 2011 Art Market Overview ............................................................................................................................... 9 Table 3 Skate’s Top 5000 Key Metrics in 2011 versus 2010 ....................................................................... 10 Table 4 Skate’s Top 5000 Peer Group: Key Data Points .............................................................................. 10 Table 5 Skate’s Achievement of the Year Awards ....................................................................................... 11 Art Market LiquiDity AmiD a Chinese Bubble? ................................................................................................ 11 Table 6 Ten Most Active Artists by Number of Artworks TradeD Within Top 5000 Price Range................ 13 Table 7 Biggest Changes in the Artists’ Market Capitalization of Skate’s Top 5000 in 2011 ...................... 13 Table 8 Ten Most Valuable Artists in Skate’s Top 5000 (as of December 30, 2011) .................................. 14 Table 9 Top Five Auction Prices PaiD in 2011 .............................................................................................. 14 Investment Potential of Art in Skate’s Top 5000: ERR Results of 2011 .......................................................... 15 Table 10 Repeat Sales Data: 2011 vs. 2010 ................................................................................................... 15 Table 11 Ten Most LiquiD Artists (Greatest Number of Repeat Sales by Years) ........................................... 16 Table 12 Five Best Exits from Art Investments in 2011 ................................................................................. 16 Table 13 Five Worst Investments in Art Realized in 2011 ............................................................................. 18 Table 14 All Time ERR Records (Based on Repeat Sales within Skate’s Top 5000) ....................................... 18 Table 15 Female Artists in Skate’s Top 5000 ................................................................................................. 19 Leaving Skate’s: Value Reductions and Exits .................................................................................................. 19 Table 16 Revolving Door: Artists RepresenteD in Skate’s Top 5000 of Artworks by Auction Prices ............. 20 Table 17 Top 10 Losers: Artists with the Greatest Reduction in Value anD Number of Artworks ................ 20 Table 18 Top 10 Artists by Market Capitalization without Sales Records in 2011 ........................................ 21 Table 19 Most Valuable Living Artists ........................................................................................................... 21 Table 20 Skate’s Top 5000 Living Artists Who Passed Away in 2011 ............................................................ 22 Skate’s Art Stocks Review ............................................................................................................................... 23 CalenDar of Conferences anD Other Events in which Skate's Will Participate in 2012 .................................. 25 155 East 56th Street, 4th floor, New York, NY 10022 USA /phone: +1.212.514.6010 web: www.skatepress.com Introduction Welcome to the 2011 Annual Art Investment Report expanDing the adDressable market for art Dealers by Skate’s. Published by Skate’s Art Market Research anD auction houses. since 2006, this report covers global art market trends anD proviDes forecasts for the coming year. When we founded Skate’s in 2004 and began talking Our coverage is focused on the universe of global about effective investment returns on works of art, artists (674 names as of December 30, 2011) whose using financial terms such as “free float”, “peer works are represented in Skate’s Top 5000, our group valuation” and “value enhancement” in database of the world’s most valuable art based on conjunction with art, art trade practitioners were auction prices. We also follow all publicly traded art often at a loss. Now, seven years later, we have a funDs anD companies operating in the art inDustry gooD several thousanD of them as subscribers anD arounD the worlD, tracking their performance with enjoy close relationships with many professional art Skate’s Art Stocks InDex. organizations anD businesses that have come to embrace the investment approach to art buying anD To learn more about Skate’s Top 5000 and the selling. The iDea of art as an investment has become artworks anD artists representeD, please Download embedded in their thinking. Skate’s application for your iPad or visit www.skatepress.com. For art stocks anD art funDs As recently as 2009 when Skate’s Art Investment coverage, please visit Skate’s Art Stocks & Funds. HanDbook was publisheD, even the well-known name of the book’s publisher—McGraw-Hill—was In this report, we focus on the world’s leading not enough to get the book into U.S. museum stores, auctions with sales qualifying for entrance into which maintained a ban on all art investment Skate’s Top 5000 in 2011 (the threshold price stands literature. Throughout 2011, however, we have seen at $2.1 million as of December 30, 2011). Skate’s the diffusion of “art as an investment” school of currently covers 30 auction houses globally, of which thought from the fringes of the finance worlD into Sotheby’s, Christie’s, Poly International Auction, the mainstream view of what Drives art purchases Phillips anD China Guardian Auctions are by far the anD sales in an increasingly broad global art most significant contributors of works to Skate’s Top marketplace. Fuelled by global economic 5000. uncertainty, investors, lured by its asset protection quality, have poured capital into fine art. The rapiD The Art Market Will Decompose Into growth anD globalization of art market participants Investment and Consumer Grades have clearly moved buy-siDe power to new money that is interested in no-nonsense Discussions of risk Art Securitization and e-Commerce to Drive anD return, transaction transparency anD ownership costs, as well as other core aspects of art as Growth for These Market Segments, investment thinking. Access, social cache, personal Respectively tastes, the electric magic of the auction room anD the dealer’s pitch are things that remain in play as The Big Picture: Art Market Drivers—From Art factors relateD to art buying. Yet these factors are no as an Investment to Art as a Consumer Good longer isolateD from hard facts anD financial numbers. The concept of art as an investment has emerged from something vieweD as vulgar anD inappropriate We have long preached the advent of rational less than ten years ago to the mantra of the art trade thinking about art as an alternative investment class, toDay. It is a concept that has helped to Drum up being used not to substitute but to compliment DemanD for works in the miDst of economic turmoil traditional art buying practices. It has now arrived. anD garner the attention of new buyers, thus Now what? 2 Skate’s believes that this arrival marks not the end fact, following the long market bonanza caused by but rather the beginning of a long anD profounD the end of the ColD War, the advent of global trade change that will sweep the art market in the coming anD the emergence of the BRICs, the global art Decade. It will follow two Distinct trends: segregation market will lanD on the same plateau as it was of the investment quality art market anD the rapiD immediately following the Japanese speculative transformation of a cottage art trade inDustry into buying spike in the 1980s. an increasingly efficient corporate structure, with supply chain management anD a retail system more The art funDs of toDay give weak hope. While the efficiently linking artists anD consumers. numbers can vary, fewer than 100 art funDs are open to outside investors globally. Furthermore, Segregation of the Investment Quality their art purchases Do not even account for 1% of Art Market total art purchases worlDwide. The LonDon-based research firm ArtTactic, which is run by our In 2011 alone Skate’s estimates that there were over respected competitor anD friend AnDres Patterson, 2,000 transactions completed on the auction market believes that the money unDer management in the involving artworks priced at $1 million or more per art funDs inDustry grew by nearly 50% in 2011 to $1 work. There were probably as many Deals completeD billion, although we see many of those funDs as in galleries and art fairs arounD the worlD as well. Art more reminiscent of certain individuals’ structured trading volumes have grown close to $80 billion for art holDings than truly transparent collective 2011, having reached peak levels previously seen in investment vehicles. At Skate’s we have managed to 2006-2007 (the honorable professor of art establish coverage of only a Dozen art funDs to Date,
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