Increased private investment in art - 21 November 2005

Monday, 21 November 2005

As investors look for the next big return beyond property and shares, an increasing number are looking at art.

There has been a significant jump in the number of investors purchasing art for a return, notes the National Private Bank, the private banking arm of the National Australia Bank (NAB). 

In response to requests from its clients, the National Private Bank is hosting a series of seminars on the issues that people should be aware of when investing in art.

"We have witnessed a 500% increase in inquiries from individuals considering collecting art as an investment," said Barry Pang, principal of Artpreciation, an art adviser and speaker at the National Private Bank seminars.

Mr Pang noted how "art can provide serious returns. For example, if you purchased a Nolan or a Whitely 10 years ago its price has more than trebled over the past decade. 

"With property and some other investments flat, more people are looking at diversifying their investments beyond shares, looking for something that can provide them with additional alpha returns," he said. "Art is one asset class that is increasingly being considered. The fact that it can also be enjoyed and admired enhances the value of ownership and investing."

Carl Harman, head of the National Private Bank, cautioned: "As with all investments, the skill is knowing what might perform well, and what might be wallflowers.

"Collecting art can be a hit and miss affair. Not many buyers can afford a Picasso, but there is certainly money to be made from collecting the works of the right artists and holding onto them for a long period of time. Of course, finding out who those artists are can take a lot of time and research, requiring professional advice.

"As with any investment, there is no substitute for research, which is why the National Private Bank regularly hosts seminars for clients interested in investing in art," he said today.  The seminars are addressed by Mr Pang, Anita Archer, the head auctioneer of Deutscher-Menzies as well as directors of the country's major art galleries.

Ms Ros Odgers, a senior private banker at the National Private Bank, suggested: "Potential art investors should, as with any investment, seek expert advice".

- Buy the best you can afford.  As there are blue chip shares, there is blue chip art.
- Do your homework. Speak to experts and shop around - there are many fakes and worthless pieces out there.
- Buy what you like. You will enjoy it more if you like it. If nothing else this increases the piece's value to you.
- Rarity is a good thing. If it's hard to find there probably aren't many around, which is good for future values.
- Narrow the focus. It is easier to learn about one type of collectible than try to research everything.
- Condition is vital. Look after the treasures - condition can be everything.
- Be patient. Not only will it probably take time to find the right collectibles, it may take time before they're profitable.

The National Private Bank prides itself in offering a diverse range of financial solutions for investors with complex financial needs. "Our clients are demanding more from their banks than ever before, and rightly so. We believe in the importance of building valued relationships with our customers, and a large part of that is being able to go beyond the traditional realms of advice and offer them a full range of financial solutions," says Ms Rodgers. "With the right advice, and as part of a diversified investment portfolio, collectibles can be an enjoyable and profitable addition to an investment portfolio."

The National Private Bank looks after the financial needs of individuals and business owners and managers who have an income of more than $250,000 a year or investable assets of more than $1 million.  Its client base also includes many sports stars, celebrities as well as executives at other financial institutions.

About NAB Private Bank
The NAB Private Bank is profoundly client centric. Its bankers use their knowledge  to provide the most appropriate solutions, and aim to deliver those solutions seamlessly, for their clients.  It has 91 teams in 24 locations, including dedicated private banking suites, around the country.

For further media information, please contact:
NAB Australia Corporate Affairs
Guy McKanna
Tel: (02) 9237 9817
Mob: 0402 893 843

* The information contained in this media release is for media advice purposes only. The contents are true and correct at time of publishing/issuing, however may change over time. For further information about NAB products or rates, please go to Interest Rates, Fees & Charges