Between Prestige & Return: The Art of Investing

A guest article by Berthold Baurek-Karlic, CEO of the Vienna-based consulting and investment company Venionaire Capital

Most investments and collaborations are based on hard facts, figures, and reports. Some investments, however, come straight from the heart. This is especially true when it comes to the purchase of artworks. It is therefore not surprising that many art collections now managed by professional family offices were originally the private passion of their founders.

Especially during times of crisis, investments in tangible assets increase. In addition to real estate and gold, works of art the interest of many investors.

From patrons, muses and benefactors

Investing in art is by no means a 21st-century invention. The history of patronage stretches far back into past centuries, and even today we owe magnificent buildings , sculptures , paintings , and much more to the patrons of that era

Today, however, there is more to it than just personal passion and noble philanthropy. The sharply rising value of certain art forms has drastically increased the visibility of art and collectibles as an alternative investment class. Since 2003, the global art market has tripled in size.

There is no equivalent to the familiar stock market index here. Managing an art portfolio therefore requires countless individual strategic decisions: genre by genre, artist by artist, object by object. Just as with selecting individual securities, success depends on when you buy and when you sell.

Reciprocal Effects: How Web and Art Interact

Digitalization has now reached the art market , and – as in so many areas – the COVID-19 pandemic was the driving force. During the lockdowns, galleries were suddenly forced to publish prices online. Artists were suddenly globally accessible, and their art was visible online anytime, anywhere in the world.

Before the pandemic, non-fungible tokens a distant concept; today, they are the instrument for trading digital art. At the same time, lockdowns enabled the emergence of new art forms. Social distancing, with all its restrictions, also created spaces for freedom in the form of free time.

And art is a daughter of freedom – as Friedrich Schiller already stated.

What remains after all the considerations, indices, and deliberations?

Unlike a startup, a work of art cannot go bankrupt. Ultimately, a painting, like any other product, will be evaluated. And the principle remains: a good product should never become boring. That's what true art is all about. Think of great masters like Monet or Balzac.

Even after centuries, the human mind and soul still find joy in them. It was this feeling that led us at Venionaire Capital to acquire a painting by the Austrian artist Mike Büchel . Büchel's homage to Honoré de Balzac (160×180 cm, oil on canvas) now adorns our office in Vienna.

For us, art is more than just a pure investment: art is always connected to high emotional value and awakens feelings. The homage to Honoré de Balzac never ceases to amaze us. Wherever your gaze falls, you discover something new. It wanders from one loving detail to the next, lingers briefly, and yet is already eager to flit on, to discover even more.

Investing in tangible assets – but how?

Especially in times of low interest rates and rising inflation, investments in tangible assets are increasing. Besides real estate and gold, works of art are currently attracting particular investor interest. However, unlike stocks or bonds, works of art do not generate ongoing income.

They even incur follow-up costs for the investor after the purchase: insurance, storage, maintenance – not to mention the artist's personal rights arising from their authorship. Therefore, anyone who wants to be successful with fine art investments needs the necessary expertise or knowledgeable advisors. Investments in art are long-term in nature and should only be made if the work is so appealing that, deep down, you never want to part with it.

About the author & Venionaire Capital:

Berthold Baurek-Karlic is Managing Partner (CEO) of the consulting and investment company Venionaire Capital in Vienna. With his network of over 250 experts – including galleries, industry insiders, and artists – he has been advising high-net-worth family offices, private individuals, and companies throughout Europe on strategic investment decisions for over 10 years. Further information: www.venionaire.com

About the artist:

Mike Büchel enjoys international success as a consummate artist. The Austrian native studied in Mexico, Taiwan, and Florence and is considered one of the few who have mastered the craft of the old masters. The artist lives and works in Vienna. See also: www.mike-buechel.at

Venionaire Capital

Berthold Baurek-Karlic is Managing Partner (CEO) of the consulting & investment company Venionaire Capital in Vienna and, with his network of over 250 experts – including galleries, scene insiders and artists – has been advising high-net-worth family offices, private individuals & companies throughout Europe on strategic investment decisions for over 10 years.

www.venionaire.com/

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