Why Art is an Emotional Business

In just three years, Art Basel Hong Kong has managed to establish itself as an important date on Asia’s international art calendar.

The show has clearly struck a chord with its in-depth overview of the region’s diversity through both historical and cutting-edge works by leading and emerging artists.

Art’s ability to enrich our lives emotionally is a notion as old as civilization itself. Great works of art are part of our shared consciousness, and a common language through which we perceive the world.

Following the global financial downturn in 2008, segments of the art market—led by contemporary art—have enjoyed boom times.

Dramatic headlines trumpeting major art sales support a growing narrative that positions art as a financial asset, and help to feed interest in the business of “flipping” art for financial gain.

In 2015 global art sales reached $63.8 billion, according to the TEFAF Art Market Report. The annual report, published this month, confirms that activity remains high, although the volume of sales has slowed from 2014’s record boom year.

The strongest art market continues to be the United States, with 43 percent. Sales in China have dropped by almost a quarter as its economy tightens, positioning it in third place below the United Kingdom.

By sector, Post War and Contemporary art are most in demand, followed by Modern art.

Helping to propel sales are the world’s mega clearing houses, as epitomized by Christie’s, which last year brokered the most expensive auction bid ever for Pablo Picasso’s Les Femmes d’Alger—at $179.4 million.

The auction houses admit to adopting many theatrical tactics to help bolster sales. The most successful auctioneers are inherent showmen. The artworks are rarely positioned in a sequence that honors any knowledge of art history or chronology.

Drama is the order of the day; the first lot usually has pre-secured interest to help set the tone and encourage enthusiastic bidding for the rest of the auction.

Yet, an estimated two-thirds of the world’s art is sold privately. Paul Gauguin’s Nafea Faa Ipoipo (When Will You Marry?) was sold in February 2015 for an estimated $300 million.

Such trends help keep the auction houses and media reporters in business; but the focus on transitory public sales is anathema for many collectors. For many, the inherent value of art remains a philosophical assertion that can’t be measured in numbers.

Art as a passion-led business

Mary Rozell, Global Head of the UBS Art Collection, joined the financial services company in September 2015, having worked as the Director of the Art Business program at Sotheby’s Institute of Art in New York.

Rozell says she was attracted by the ethos emanating from the top of the group, and its known commitment to the art world.

“For me, the best collections I have worked on, and am familiar with, have always been driven by passion,” she explains. “UBS’ collection is widely recognized as one of the most important corporate collections of contemporary art in the world. We have more than 30,000 artworks spanning the last 50 years by emerging and established artists.

“The philosophy underlying our collection is to build and maintain a seminal body of work that provokes thought while being inspirational. We also believe it upholds our commitment to support and encourage the artistic communities in places where we do business.

“Our core collection now has great value, and an illustrious history as part of our two Swiss predecessors and PaineWebber, but the original buyer, Donald Marron, was a passionate post-war art collector.”

Rozell accepts that some art has “great investment value” but admits to finding the trend to treat it as such “rather tiring”.

“Art is unlike any other commodity, and selling art can be very difficult,” she warns. “The markets are unpredictable, whimsical even, and as an asset it is also costly to maintain.”

One contemporary artist who echoes Rozell’s views about the importance of passion is Shi Guowei, featured in this year’s UBS Art Collection at Art Basel Hong Kong.

Born in China’s Henan Province, Guowei urges artists to avoid focusing on the potential monetary value of their work.

He says. “The most important thing for any artist is to be loyal to himself, so he can express what is inside of him. Many young artists try to create works that they think will fit the market’s needs. But the market price is not important in my opinion; the expression of their inner feeling is.”

Guowei also admits to being amazed at the many different interpretations and meanings people are able to ascribe to his work—“sometimes not even close to what I have intended with that piece of art.”

Watch UBS’ interview with Shi Guowei

In addition to the emotional demands involved in creating and collecting art, many would-be collectors underestimate the physical requirements needed to care for the work.

Rozell recalls thousands of real estate pictures she has seen where the artworks are just hanging on the walls, in front of windows or above heaters—risking irreparable damage.

“It’s a conservation question,” she says. “If you’re going to preserve the value of your artwork, you need to preserve its physical integrity, so you have to make sure your windows have UV protection—you can’t hang it over a heater. Generally speaking, you want stable temperatures and humidity. The worst thing for works is when you have wild fluctuations.”

Registrar duties are also required, and cataloging a large collection, like that of UBS, requires considerable database work.

“Cataloging is an important part of any collection,” says Rozell. “Some collectors have lost track of what artwork they have where. And then there’s the question of whether you want to have insurance or not.”

For the “enlargement of self and humanity”

Richard Armstrong, Director of the Solomon R. Guggenheim Museum and Foundation, has a clear message for any would-be investor.

“Art is an illiquid investment, which to me means, don’t touch it if you are only interested in making money,” he says. “On the other hand, if you’re interested in enlargement of self and imagination, and enhancement of humanity, it’s an amazing activity. It can have a major impact on you as a person, as well as your partner in life, your progeny and, if we’re all lucky, the public at large.”

As head of one of the world’s most famous collections, affectionately known as at the Guggenheim on Fifth Avenue in New York, Armstrong believes many collectors have an emotional and personal entry into art.

“I think people see something in an inanimate object that complements, contradicts or explicates something about themselves,” he says. “It’s a kind of primal reaction. They want to acquire that thing because it has talismanic value to them; and from that acquisition they’ll frequently meet other people who are similarly motivated—artists, dealers and the rest of the art community.”

This community underpins the enduring success of both museums and popular fairs like Art Basel, Frieze Art Fair and TEFAF Maastricht. Armstrong refers to it as “a fellowship of like-minded people who value discernment and discovery”.

The Guggenheim, designed by Frank Lloyd Wright, long ago secured its position as one of New York’s star attractions, and is reported to be one of the most photographed buildings in the world. Armstrong confirms the number of international visitors to the museum has reached “historic highs,” but believes the collection also serves an important role for Americans.

“We are attracting a growing audience of living artists—some of whom are based in New York, many who are not,” he says.

“We are also engaging a growing audience of people who have an interest in, and believe in, the credibility of art of our time. Our global projects take this idea even further by collaborating with living artists for the acquisition of works into the Guggenheim collection.

“Through the Guggenheim UBS MAP Global Art Initiative, resident curators with deep knowledge and experience in key cultural regions spend time with artists working in those regions, visiting their studios and selecting works that enhance the existing dialogue among works in our collection.

“With the Robert H. N. Ho Family Foundation Chinese Art Initiative, our curators are collaborating with artists from mainland China, Hong Kong, Taiwan and Macao to commission new works; many will be site-specific to the New York museum, and have elements of social practice. Those new works will also enter into our permanent collection.”

Today, the Guggenheim attracts more than one million visitors each year to its carefully considered collections. Armstrong attributes much of the museum’s success to its “prescient predecessors” who founded and promoted the Guggenheim as a site, as a vision and as an attitude.

The museum’s willingness to embrace popular culture and its unique building architecture have strongly contributed to the Guggenheim brand.

Armstrong also credits the Guggenheim’s reputation, which has enabled the museum to collaborate and experiment with international cultural institutions.

“These collaborations allow us to share our collection with a wider audience; work with colleagues in other global cultural centers such as Mexico City, Helsinki, China and Singapore; and engage with artists who are working in an increasingly international and borderless manner,” he says.

“The Guggenheim has always been an unusual museum in that it had a sociological aim from day one, which was to change behavior by exposing people to radical and advanced ‘non-objective art’—what we would call ‘abstract art’ today.

“To the degree that abstraction is now considered a mainstream expression, the museum has been highly successful. Its principles still guide our trustees and staff, and we continually challenge each other to be radical, as the museum was from its inception.

“Through our Guggenheim UBS MAP Global Art Initiative, for example, we’re learning at a rapid rate, [and are] able to reflect on our process in real-time and make adjustments in the manner that a start-up might.

“That feels radical, as well. Art practice, art making, art curation, is not one-size-fits-all, and we want to be responsive, especially when it means putting ourselves out on a limb to see how far we can reach, how much we can grow and how many people we can impact.”

Helping collectors navigate a complex world

By comparison, exhibitions like Art Basel present a compressed and filtered exposure to a broad range of artworks, which can act as a compendium to the museums.

The UBS Art Competence Center provides a bespoke service for some of the bank’s wealthiest clients interested in engaging with the art world.

Patricia Amberg, Head of the UBS Art Competence Center, agrees fairs can provide an invaluable opportunity to help clients “navigate a very complex world”.

“At Art Basel, some clients are newcomers and some are well-established collectors. If someone is starting from scratch, we will explain the market, the structure and art history, as an independent advisor. As soon as we know which direction they should go—maybe there’s interest in a particular market, or a specific period—then we can execute due diligence.”

Education forms a key component of art investment services like the ones UBS provides. The global team possesses expertise and experience in the growing demand for collectible art, as globalization and digitalization help introduce new entrants, and new money, into the market.

“It is a long process, but it is a wonderful work,” says Amberg. “It’s about lifting the client, understanding their needs and providing the right kind of advice. It is a strong education process, with the goal being that one day the client will be able to handle everything on their own.

“Passion is one of the fundamental dimensions of great wealth, with art and its many forms being one of the most common expressions of passion from our wealthiest clients,” Amberg adds.

Ultimately, like all the most successful advisory services, the UBS Art Competence Center is based on trust. With so many works of art, and with fraud in its ascendency, it is easy for clients to feel overwhelmed.

UBS prides itself on being able to provide independent and impartial advice—with no stocks it needs to sell and no ulterior motives that might create any conflict of interest.

The group does not buy from auction houses, either. The focus on the primary art market is a conscious attempt to support the ecosystem within which the art world operates—from new works to the artists and galleries.

The message emanating from the experts at UBS team is clear: Regardless of any current fads, the future is bright for any collector drawn to the cultural nourishment the art world provides.

Or, as UBS’ Rozell puts it: “Many people love collecting art because it expands their world. Once school stops and we all go to work, we are not learning in the same way. It keeps that side of you alive; your curiosity, your interests and your passions.

“And when you have art hanging on your walls it is an everyday reminder of those core passions and interests, and of your own personal journey.”