Art not only has aesthetic and emotional components - in addition to the possibility of buying and collecting it out of passion, more and more people are seeing the acquisition of works of art as an investment opportunity.

Ralph Kleinsimlinghaus has seen the ups and downs of the art market. He is an art dealer and managing director of Artax Kunsthandel KG, which was founded in 1988 and occupies 700 square metres in Derendorf. Artax stocks 20th and 21st century art. There are currently around 6,500 objects in stock, which can be viewed on site at any time, but are also sold via the website. In this way, the company aims to promote the democratisation of art, as even art lovers with less money can buy one of the works, which range in price from 50 to 20,000 euro. Of course, there are always clients who want to invest money in art. But such an investment always involves a certain risk. "Since the financial crisis in 2008, we have had a small dip in the art market," explains Ralph Kleinsimlinghaus. Such dips have happened before, in 1988/89 or 2001, and they could happen again at any time. Since the last crisis, however, the market has flourished, leading to unprecedented price levels and more and more people wanting to invest their money in art. Many are particularly interested in the blue chips, high profile artists who are currently trading at very high prices. "At Artax, however, we give our customers an overall view of art and show them alternatives to expensive artists, which is important to us," says Ralph Kleinsimlinghaus.

Ralph Kleinsimlinghaus is an art dealer and managing director of Artax Kunsthandel KG.

He is certain that price increases are mainly due to an artist's marketing, for example on social media, as well as the reactions of museums and art critics. There is also a very fast-moving art market, with galleries constantly building up new stars and young artists who then disappear from the market just as suddenly. This also has an impact on today's collectors. "It seems to me that they are helping themselves to art as if they were in a crowded supermarket. As a result, the collections that are created today are often very disparate. Particularly for higher earners, art has established itself as a kind of "savoir vivre", and buying it is often a very conscious investment decision, especially for younger people. As an art dealer, however, he also knows that a work of art involves a number of financial elements that many buyers are not aware of, such as artists' social security contributions, copyrights or VAT, transport and storage costs. "Art is not a directly convertible commodity and only makes sense as an investment if I am prepared to take it off the art market for several years. Only then can it achieve a status of desirability," explains Ralph Kleinsimlinghaus. It is therefore part of Artax's customer service to advise on current developments on the art market and on investments. "If art doesn't trigger a sensual experience for me, a large investment always becomes a risk factor. Because if I buy something that really convinces me, it won't hurt me if it's worth less one day".

Artax offers 20th and 21st century art, currently around 6,500 works, all of which can be viewed on site. The cheapest works start at 50 euro.

Peter Toffel knows this too. A trained banker and financial planner, he is himself an art lover and collector, so he speaks from experience. He is the head of the Ganteführer Family Office on Düsseldorf's Rathausufer, which specialises in managing large private fortunes. In addition to securities, real estate and jewellery, this also includes art collections. What is his view of the current status of art as an investment? "The most important thing is that I have to like the art before I invest in it. If you like to consider it in terms of increasing value, you should go for the big names - young artists aren't necessarily going to be successful". Gallery owners are therefore stakeholders in the market, helping to shape it. "The art market is still good, but there are themes that should be treated with caution, such as NFTs, where prices have fallen by up to 80 per cent," explains Peter Toffel. "On the other hand, I've never seen the prices of already high-priced artists fall. He is also certain that an art investment should be made for the long term: "With few exceptions, you will only find collectors in the classical art market who practise the classic 'buy and hold'. In addition, the art market has become quieter in recent months, he says, the crisis and the associated uncertainty and reluctance to buy can be felt, but this will disappear. Peter Toffel sees online investment portals such as Arttrade, based in Düsseldorf's Immermannstrasse, as a real alternative to the traditional art market. "Arttrade offers the opportunity to invest smaller amounts in a work of art; an excellent approach alongside traditional investments if you see it as an independent asset class in your portfolio". When you take into account the specific characteristics, an investment in classical or contemporary art is just as safe as the purchase of a luxury watch, which can increase in value significantly. •

“If art doesn’t trigger a sensual experience for me, a large investment always becomes a risk factor”

Words: Katja Vaders
Pictures: ARTAX, GANTEFÜHRER FAMILYOFFICE

The art of investing