Stories
Stories
Podcast
28.10.2021
When things aren't going so well at Deutsche Bank, CEO Christian Sewing could simply sit back and lose himself in one of the many pictures owned by the bank. Of course he doesn't do that, there is too much at stake at Germany's largest financial institution. On the contrary, when things are going badly, he likes to sell one or two pictures.
Deutsche Bank, for example, made a loss of 5.7 million euros in the 2019 financial year. Up to 18,000 jobs were to be cut, wrote Handelsblatt in February last year. The bank's famous art collection also had to suffer in order to raise new money. With more than 55,000 paintings, it is larger than many a museum collection and is also legendary.
Deutsche Bank had 200 works auctioned off at the end of last year, some in Paris, others in Munich. At the time, the bank wanted to raise a sum in the low double-digit millions.
When the Frankfurt bank sells its paintings, it always causes quite a stir. Not only because they include many works by famous artists, but also because sometimes a sale is carried out quietly and secretly, only to become public after all. A three-part painting by Gerhard Richter, for example, was long regarded as one of the collection's showpieces. "Faust", as it is aptly named, hung for many years in the lobby of the bank's Wall Street tower in New York. Until the painting suddenly disappeared, sold to an American collector. The sum: unknown, the name of the collector: also unknown.
Deutsche Bank is not doing anything dishonest with such a sale. Works of art can be regarded as an asset class, similar to shares, bonds or gold. They can be traded accordingly. It is the unromantic side of the business, but it is exactly the mindset that all those who want to invest in art themselves should have. At least that's what Arne Freiherr von Neubeck says.
Von Neubeck must know what he is talking about. He has been dealing in art for his clients since 2008, assessing its value for them and advising on investments. With "The Global Fine Art", he has created a company that focuses on contemporary works. His basic advice is: "Leave your emotions at home." If you want to invest your money in works of art, you can of course also decide whether you find a painting beautiful or not. However, according to von Neubeck, this is not a decisive criterion.
This means that such a painting does not belong in your own living room. Many are on display in museums or slumbering away in storage. It is not easy to store older pictures in such a way that they are not damaged and lose value. It can also be expensive. "We only work with flat paintings and photographs ourselves," says von Neubeck. "If you store a two-by-two-meter sculpture, it costs a small wealth."
"Buyers should have it plausibly explained to them that the artist is established, how the asking price came about, that it is an original - and what background the artist has," he says. Another decisive criterion: "If you understand what the artist wants to express with his painting, you can also assess the value of the artist and his painting to some extent." But according to von Neubeck, there is a big catch: "Art is almost always difficult for laypeople to assess, and in any case much more difficult than shares."
Von Neubeck has built up a network over the years and is in constant contact with gallery owners, curators, university professors and experts. However, when it comes to young artists in particular, a serious assessment is only possible to a limited extent, he says. If you are primarily looking for a safe investment, you should focus on blue chips when it comes to works of art. These are works that Neubeck likes to describe as "boring" in terms of their market development. Paintings by Roy Lichtenstein are among them, and Picasso also created such pictures.
The operators of the Artprice platform, which records all auction results worldwide, have analyzed the average return on investment. Anyone who buys a work of art for up to 50,000 US dollars can therefore expect a return of a good six percent after a holding period of 12.5 years. Anyone who spends between 200,000 and one million US dollars can expect a return of a good 8.2 percent after ten 10.5 years.
As a store of value, art is always an event. If you want to make big money, you can try to find an artist who could become the next big star. The works of Albert Oehlen, a painter from Krefeld, were the most recent example of this. Oehlen already had his market and his fame, but since he has been represented by the well-known gallery tycoon Larry Gagosian, the prices for his works have gone through the roof. However, if you bet on the wrong artist, you may have bought pictures that you can't get rid of later because the artist has disappeared into obscurity again.
And then there is also the matter of the market. This has suffered significantly recently due to coronavirus. This is because the trade fairs through which many works are usually sold did not take place. Global sales fell by 22 percent last year. It still amounted to a good 50.1 billion dollars. At least that's according to the "Global Art Market Report 2021", published annually by Art Basel and the major Swiss bank UBS. Although online business increased significantly in 2020, it was not able to replace all the fairs and auctions where interested parties are on site.
"If Art Basel, the largest art fair, is canceled, for example, then that naturally has an impact," says von Neubeck. Art buyers also want to be seen, vanity too often plays a major role when buying. "Art Basel is basically a kind of ego machine," says von Neubeck, who considers the market to be stable overall. "The interest in art is unbroken, and there is also enough money available," he says. The first events have already taken place again this year. Von Neubeck assumes that the market will therefore return to normal in the coming year.
The painting by the famous artist went for 450.3 million US dollars in 2017. The buyer was none other than the Saudi Crown Prince Mohammed bin Salman.
Painted in oil on a walnut panel, the work shows Christ as the Savior of the world in a frontal view. He has raised his right hand in blessing and is holding a crystal ball in his left.
The gap between second and first place is large. Christie's auction house sold the painting for 179.4 million US dollars. The buyer is unknown.
The picture is part of a series of 15 paintings by Picasso. The "O" version depicts a scene from a harem. As recently as 1997, the painting was auctioned at Christie's for just 32 million US dollars.
It is a close race between second and third place. The painting by the Italian painter was bought by an art collector from China for 170.4 million US dollars.
The oil painting shows an undressed woman lying on a dark red sofa and a turquoise blue cushion. Since the auction, the painting has been on display at the Long Museum in Chongqing, southwest China.
Stories
28.10.2021
Jan Schulte
Works of art can be suitable both for cautious investors and for investors who like to take a bit of risk. However, the market is subject to somewhat different rules than those for shares, for example.
When things aren't going so well at Deutsche Bank, CEO Christian Sewing could simply sit back and lose himself in one of the many pictures owned by the bank. Of course he doesn't do that, there is too much at stake at Germany's largest financial institution. On the contrary, when things are going badly, he likes to sell one or two pictures.
Deutsche Bank, for example, made a loss of 5.7 million euros in the 2019 financial year. Up to 18,000 jobs were to be cut, wrote Handelsblatt in February last year. The bank's famous art collection also had to suffer in order to raise new money. With more than 55,000 paintings, it is larger than many a museum collection and is also legendary.
Deutsche Bank had 200 works auctioned off at the end of last year, some in Paris, others in Munich. At the time, the bank wanted to raise a sum in the low double-digit millions.
When the Frankfurt bank sells its paintings, it always causes quite a stir. Not only because they include many works by famous artists, but also because sometimes a sale is carried out quietly and secretly, only to become public after all. A three-part painting by Gerhard Richter, for example, was long regarded as one of the collection's showpieces. "Faust", as it is aptly named, hung for many years in the lobby of the bank's Wall Street tower in New York. Until the painting suddenly disappeared, sold to an American collector. The sum: unknown, the name of the collector: also unknown.
Deutsche Bank is not doing anything dishonest with such a sale. Works of art can be regarded as an asset class, similar to shares, bonds or gold. They can be traded accordingly. It is the unromantic side of the business, but it is exactly the mindset that all those who want to invest in art themselves should have. At least that's what Arne Freiherr von Neubeck says.
Von Neubeck must know what he is talking about. He has been dealing in art for his clients since 2008, assessing its value for them and advising on investments. With "The Global Fine Art", he has created a company that focuses on contemporary works. His basic advice is: "Leave your emotions at home." If you want to invest your money in works of art, you can of course also decide whether you find a painting beautiful or not. However, according to von Neubeck, this is not a decisive criterion.
This means that such a painting does not belong in your own living room. Many are on display in museums or slumbering away in storage. It is not easy to store older pictures in such a way that they are not damaged and lose value. It can also be expensive. "We only work with flat paintings and photographs ourselves," says von Neubeck. "If you store a two-by-two-meter sculpture, it costs a small wealth."
"Buyers should have it plausibly explained to them that the artist is established, how the asking price came about, that it is an original - and what background the artist has," he says. Another decisive criterion: "If you understand what the artist wants to express with his painting, you can also assess the value of the artist and his painting to some extent." But according to von Neubeck, there is a big catch: "Art is almost always difficult for laypeople to assess, and in any case much more difficult than shares."
Von Neubeck has built up a network over the years and is in constant contact with gallery owners, curators, university professors and experts. However, when it comes to young artists in particular, a serious assessment is only possible to a limited extent, he says. If you are primarily looking for a safe investment, you should focus on blue chips when it comes to works of art. These are works that Neubeck likes to describe as "boring" in terms of their market development. Paintings by Roy Lichtenstein are among them, and Picasso also created such pictures.
The operators of the Artprice platform, which records all auction results worldwide, have analyzed the average return on investment. Anyone who buys a work of art for up to 50,000 US dollars can therefore expect a return of a good six percent after a holding period of 12.5 years. Anyone who spends between 200,000 and one million US dollars can expect a return of a good 8.2 percent after ten 10.5 years.
As a store of value, art is always an event. If you want to make big money, you can try to find an artist who could become the next big star. The works of Albert Oehlen, a painter from Krefeld, were the most recent example of this. Oehlen already had his market and his fame, but since he has been represented by the well-known gallery tycoon Larry Gagosian, the prices for his works have gone through the roof. However, if you bet on the wrong artist, you may have bought pictures that you can't get rid of later because the artist has disappeared into obscurity again.
And then there is also the matter of the market. This has suffered significantly recently due to coronavirus. This is because the trade fairs through which many works are usually sold did not take place. Global sales fell by 22 percent last year. It still amounted to a good 50.1 billion dollars. At least that's according to the "Global Art Market Report 2021", published annually by Art Basel and the major Swiss bank UBS. Although online business increased significantly in 2020, it was not able to replace all the fairs and auctions where interested parties are on site.
"If Art Basel, the largest art fair, is canceled, for example, then that naturally has an impact," says von Neubeck. Art buyers also want to be seen, vanity too often plays a major role when buying. "Art Basel is basically a kind of ego machine," says von Neubeck, who considers the market to be stable overall. "The interest in art is unbroken, and there is also enough money available," he says. The first events have already taken place again this year. Von Neubeck assumes that the market will therefore return to normal in the coming year.
The painting by the famous artist went for 450.3 million US dollars in 2017. The buyer was none other than the Saudi Crown Prince Mohammed bin Salman.
Painted in oil on a walnut panel, the work shows Christ as the Savior of the world in a frontal view. He has raised his right hand in blessing and is holding a crystal ball in his left.
The gap between second and first place is large. Christie's auction house sold the painting for 179.4 million US dollars. The buyer is unknown.
The picture is part of a series of 15 paintings by Picasso. The "O" version depicts a scene from a harem. As recently as 1997, the painting was auctioned at Christie's for just 32 million US dollars.
It is a close race between second and third place. The painting by the Italian painter was bought by an art collector from China for 170.4 million US dollars.
The oil painting shows an undressed woman lying on a dark red sofa and a turquoise blue cushion. Since the auction, the painting has been on display at the Long Museum in Chongqing, southwest China.
About the author
Jan Schulte
Jan Schulte writes about business and politics.
