With nearly 30 years of combined experience in finance, the Investec leaders share their experiences in art collecting, offering a blend of personal anecdotes and professional insights.
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Art’s Resilience and Value as Part of a Diversified Portfolio
Tristanne Farrell, the podcast series host quotes the Art Basel and UBS Art Market Report that shows, in the face of high borrowing rates, geopolitical instability, and volatile economic conditions, the global art market still managed a total estimate of $65bn in sales, in 2023. Whilst this is a YOY drop of 4 percent in value the art market stabilised over 2024. Cumesh attributes this to art being less cyclical than other assets.
He notes, “In times of market volatility, and lacklustre growth, alternative investments like art offer a compelling option for diversification. The key aspect is understanding your own liquidity needs. Liquidating assets like equities is much easier than selling an art piece and hoping for a higher value.”
Cumesh continues, “I think art’s a bit of an all-weather market. I don’t think it’s cyclical. I think there are moments when there are up cycles, but I do think there’s a consistent base of art collectors, people who really enjoy art for what it is. And if I look at the continent, I just think South Africa as a whole has some of the most incredible artists.”
Both Cumesh and Itumeleng advocate for art as part of a diversified portfolio, albeit a small one. Itumeleng asserts, “Alternatives must remain that in a portfolio – the alternative, not the main.”
For Cumesh, art represents both passion and strategy: “My 5-7 percent in alternatives is for fun, enjoyment, and inspiration.”
Navigating Primary and Secondary Art Markets
Understanding the distinction between primary and secondary markets is crucial for collectors. The primary market involves direct sales from galleries, offering exposure to new artists. “It’s important for artists themselves, as they gain exposure and guidance,” notes Itumeleng.
The secondary market, driven by auctions, can reflect an artwork’s value more accurately. Cumesh, who bought a few pieces at auction says it’s a good value gauge but advises caution when bidding to purchase. “Remember to account for buyer’s commission and VAT during auctions!”
The Opening of Digital Doors
Social media has revolutionised access to art, allowing collectors and artists to connect directly. Itumeleng shares, “I’ve reached out to artists on Instagram – it’s become a vital tool for discovery.” Cumesh agrees, noting the shift during COVID-19. “Online interactions became crucial when physical access was restricted.”
The Origins of Their Art Passion
For Cumesh, it started with family influence: “My sister’s passion for art sparked something in me.” Itumeleng was drawn in by the sheer artistic genius of one artist, Mohau Modisakeng. “There’s a level of creativity you can’t explain. It was just insane! Mohau then introduced me to other artists. The best part about collecting is meeting artists and being able to get to their studios and see some of the work they have- just lying around.” Cumesh also places great value on being able to meet artists.
Itumeleng enjoys visiting studios, especially with his kids, who bring a fresh perspective: “It’s fascinating to watch how a six-year-old gets drawn to a piece,” he says.
The Cultural Significance of Art Fairs
The African art scene is more accessible and vibrant than ever, with platforms like the Investec Cape Town Art Fair bringing the continent’s artists to an international audience. Whether it’s the exciting works of emerging talents or the revered masterpieces at auction houses, art remains a timeless investment for the passionate and prudent alike.
As Itumeleng succinctly puts it, “The dividends of art are the enjoyment and inspiration it provides.”
