Ruth Knowles on Art: An Alternative Asset Class at Saïd Business School

Ruth Knowles, our Senior Director at The Fine Art Group provided a different view of art – as an alternative asset class.

Ruth spoke about how wealth is one of the biggest drivers of the market. More interestingly, she said, most of that wealth is coming from Asia, the Middle East, and Russia.

So why do people invest in art?

Firstly, Ruth pointed out, it is a tangible asset: ‘You can put it on your wall; you can tuck it away – you have something there for the future’. It is quite a good hedge against inflation. It is very portable — you can buy it in London and you can ship it to New York and you can move it in different currencies. And, certainly at the top end of the market, it seems not to be hugely affected by what is happening in the financial markets.

‘If you are going to consider art as an asset, you really need to be in that market day in and day out.’

This is why the Fine Art Group offer advice and create more structured art funds, as well as art financing and providing loans against art works.

Due diligence is also extremely important: Ruth said that ‘the number one reason why people fall down on actually trying to use art as asset is that they don’t do their due diligence properly’. This is about checking whether a work of art is listed as lost or stolen, what condition it is in, and whether the artist is dead or alive.

‘Make sure that you work with the experts and appreciate that the different sectors of the market behave differently.’

As long as you are very, very careful and are working with the people who can [understand the market], then you should be making money out of investing in art. It is a good solid diversifying asset to hold in your portfolios.’

 

To read more about Ruth’s presentation click here. 

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