thierry Ehrmann, Artprice’s founder/CEO, highlights the art market’s excellent performance in H1 2019: “A collector who, at the start of this year, invested in the 100 most successful artists of the last five years (2014-2018), would already be looking at a value accretion of almost a sixth in the value of his/her portfolio.”
The Artprice100 © index gained +16% over the first half of 2019 while the S&P 500 added +18% over the same period. The similarity in the performances between the American financial markets and a portfolio of works by the world’s top performing artists (defined in a purely objective manner) proves the undeniable attractiveness of the Art Market as an alternative investment.
The performance of the Artprice100© over the first half of 2019 was driven by exceptionally strong demand, barely satisfied by supply. The supply/demand imbalance, generated a rapid increase in value, particularly on works by the 100 top performing artists on the global secondary art market.
The turnover slowdown recorded in H1 2019 by major auction houses, including Sotheby’s (-9%) and Christie’s (-28%), reflects a less dynamic high-end market than in previous years. However, prices have shown no signs of fatigue and the contraction in the volume of sales is a reminder that the art market is directly dependent on the number of works in circulation.
In a financial context of sustained negative or near-zero refinancing rates, some collectors are probably preferring to hold certain artworks and not cash in on investments that remain highly competitive. Moreover, the persistence of extremely high transaction costs, both in galleries and in auction rooms, is discouraging short holding periods (under five years), and tempting some collectors to consider private transactions as an alternative.
The Artprice100© index driven by Warhol, Zao Wou-Ki and Wu Guanzhong
Heavily weighted in our Artprice100© index with 9.1% of the portfolio, Pablo Picasso has not contributed to its value accretion for several years. As we have seen over the last four years, his prices contracted -2% in the first half of 2019.
However, Andy Warhol, Fu Baoshi, Zao Wou-Ki and particularly Wu Guanzhong have all clearly enjoyed value accretion, providing the main thrust for the progression of our Artprice100© index in H1 2019. Without setting any new auction records, these artists have all enjoyed strong price inflation. The sale of major works by these artists will no doubt confirm the trend.
On 2 June last, a large drawing by Wu Guanzhong entitled Lion grove garden (1988) fetched $20.8 million at China Guardian. It was previously acquired for $17.8 million on 3 June 2011 at Poly Beijing. Adding 17% over the last eight years, the drawing generated, in financial terms, an average annual return of +1.9%. However, another Guanzhong resale suggests that the bulk of the value accretion on his works has occurred in the last 6 months: an important Guanzhong work entitled Two Swallows was purchased for $7.1 million on 3 June 2011 (at the same sale as Lion grove garden) and fetched $7.8 million in December 2018, an increase of just +9.8%.
Paul Cézanne and George Condo
Investments in Modern artists carry the least risk and demand for their work is continuing to grow steadily offering attractive returns over the long term. Claude Monet and Paul Signac have both signed new auction records this year. Similarly, 2019 is already proving to be a superb year (the best since 2000) for Paul Cézanne. His painting Bouilloire et fruits (c. 1888-90), acquired for $29.5 million in 1999, fetched $59.3 million on 13 May 2019 at Christie’s New York, generating an average annual ROI of 3.6% over 20 years.
At the other end of the spectrum, Contemporary artists offer striking returns in the medium and short term. The most spectacular entry into the composition of the Artprice100© index this year is undoubtedly George Condo. The American artist enjoyed a massive secondary market success in 2018with 78 paintings and 34 drawings selling for more than $63 million, and on three continents (America, Europe and Asia)! The Condo phenomenon has been clearly illustrated by a number of rapid resales of small works including Soft Green Abstraction (1983), which was purchased for $17,000 in April 2017 in Munich and resold a year later in New York for $46,000.
In total, there were seven changes this year in the composition of the Artprice 100© index.
Jean Paul Riopelle
Pieter Brueghel II
Giorgio de Chirico
Four women… and two Old Masters
Unfortunately, we see no change regarding female artists. This year again, only four of the artists in the Artprice100© are women: Yayoi Kusama (Japan), Joan Mitchell (US), Louise Bourgeois (France) and Barbara Hepworth (UK). Yayoi Kusamanow represents 1.3% of the index compared with 0.9% last year. Her price index rose 20% in H1 2019.
The relegation of Pieter Brueghel II for reasons relating to market liquidity has exacerbated the rarity of Old Masters in the index. Numerically, the composition of the index is dominated by Modern artists, numbering 49, followed by Post-War artists (29), Contemporary artists (12), 19th century artists (8) and lastly… Old Masters (only 2).
Composition of Artprice100© index for H1 2019
Artist – Share – Period
- Pablo PICASSO (1881-1973) – 9.1% – Modern
- Andy WARHOL (1928-1987) – 6.4% – Post-War
- Claude MONET (1840-1926) – 4.5% – 19th Century
- QI Baishi (1864-1957) – 3.9% – Modern
- Jean-Michel BASQUIAT (1960-1988) – 3.7% – Contemporary
- Gerhard RICHTER (b. 1932) – 3.3% – Post-War
- ZAO Wou-Ki (1921-2013) – 2.9% – Post-War
- FU Baoshi (1904-1965) – 2.5% – Modern
- Alberto GIACOMETTI (1901-1966) – 2.4% – Modern
- Amedeo MODIGLIANI (1884-1920) – 2.2% – Modern
- Cy TWOMBLY (1928-2011) – 2.2% – Post-War
- WU Guanzhong (1919-2010) – 2.1% – Modern
- Roy LICHTENSTEIN (1923-1997) – 2.0% – Post-War
- Lucio FONTANA (1899-1968) – 1.9% – Modern
- Alexander CALDER (1898-1976) – 1.8% – Modern
- Marc CHAGALL (1887-1985) – 1.8% – Modern
- Joan MIRO (1893-1983) – 1.7% – Modern
- Willem DE KOONING (1904-1997) – 1.7% – Modern
- Henri MATISSE (1869-1954) – 1.5% – Modern
- Fernand LÉGER (1881-1955) – 1.4% – Modern
- Christopher WOOL (b. 1955) 1.4% – Contemporary
- Yayoi KUSAMA (b. 1929) – 1.3% – Post-War
- Jean DUBUFFET (1901-1985) – 1.3% – Modern
- René MAGRITTE (1898-1967) – 1.2% – Modern
- Peter DOIG (b. 1959) – 1.2% – Contemporary
- Wassily KANDINSKY (1866-1944) – 1.2% – Modern
- Jeff KOONS (b. 1955) – 1.2% – Contemporary
- David HOCKNEY (b. 1937) – 1.1% – Post-War
- Henry MOORE (1898-1986) – 1.0% – Modern
- LIN Fengmian (1900-1991) – 0.9% – Modern
- CHU Teh-Chun (1920-2014) – 0.9% – Post-War
- Paul GAUGUIN (1848-1903) – 0.9% – 19th Century
- Pierre-Auguste RENOIR (1841-1919) – 0.8% – 19th Century
- SAN Yu (1895-1966) – 0.8% – Modern
- Richard PRINCE (b. 1949) – 0.8% – Contemporary
- Sigmar POLKE (1941-2010) – 0.7% – Post-War
- Joan MITCHELL (1926-1992) – 0.7% – Post-War
- PU Ru (1896-1963) – 0.7% – Modern
- Auguste RODIN (1840-1917) – 0.7% – 19th Century
- Edgar DEGAS (1834-1917) – 0.7% – 19th Century
- Paul CÉZANNE (1839-1906) – 0.7% – 19th Century
- Yves KLEIN (1928-1962) – 0.6% – Post-War
- Camille PISSARRO (1830-1903) – 0.6% – 19th Century
- Richard DIEBENKORN (1922-1993) – 0.6% – Post-War
- Ed RUSCHA (b. 1937) – 0.6% – Post-War
- Keith HARING (1958-1990) – 0.5% – Contemporary
- Martin KIPPENBERGER (1953-1997) – 0.5% – Contemporary
- Louise BOURGEOIS (1911-2010) – 0.5% – Modern
- Alberto BURRI (1915-1995) – 0.5% – Modern
- Frank STELLA (b. 1936) – 0.5% – Post-War
- Damien HIRST (b. 1965) – 0.4% – Contemporary
- Egon SCHIELE (1890-1918) – 0.4% – Modern
- Ernst Ludwig KIRCHNER (1880-1938) – 0.4% – Modern
- Georges BRAQUE (1882-1963) – 0.4% – Modern
- Georg BASELITZ (b. 1938) – 0.4% – Post-War
- Pierre SOULAGES (b. 1919) – 0.4% – Modern
- Juan GRIS (1887-1927) – 0.4% – Modern
- Salvador DALI (1904-1989) – 0.4% – Modern
- Edvard MUNCH (1863-1944) – 0.4% – Modern
- Paul SIGNAC (1863-1935) – 0.4% – Modern
- DONG Qichang (1555-1636) – 0.4% – Old Master
- Fernando BOTERO (b. 1932) – 0.4% – Post-War
- WEN Zhengming (1470-1559) – 0.4% – Old Master
- George CONDO (b. 1957) – 0.4% – Contemporary
- Sam FRANCIS (1923-1994) – 0.4% – Post-War
- Alighiero BOETTI (1940-1994) – 0.4% – Post-War
- Bernard BUFFET (1928-1999) – 0.4% – Post-War
- Max ERNST (1891-1976) – 0.4% – Modern
- Robert RAUSCHENBERG (1925-2008) – 0.4% – Post-War
- CHEN Yifei (1946-2005) – 0.3% – Contemporary
- Maurice DE VLAMINCK (1876-1958) – 0.3% – Modern
- Barbara HEPWORTH (1903-1975) – 0.3% – Modern
- Pierre BONNARD (1867-1947) – 0.3% – Modern
- Donald JUDD (1928-1994) – 0.3% – Post-War
- Max BECKMANN (1884-1950) – 0.3% – Modern
- Tsuguharu FOUJITA (1886-1968) – 0.3% – Modern
- Alfred SISLEY (1839-1899) – 0.3% – 19th Century
- Laurence Stephen LOWRY (1887-1976) – 0.3% – Modern
- Morton Wayne THIEBAUD (b. 1920) – 0.3% – Post-War
- Nicolas de STAËL (1914-1955) – 0.3% – Modern
- Enrico CASTELLANI (1930-2017) – 0.3% – Post-War
- Anselm KIEFER (b. 1945) – 0.3% – Contemporary
- Michelangelo PISTOLETTO (b. 1933) – 0.3% – Post-War
- GUAN Liang (1900-1986) – 0.3% – Modern
- Kees VAN DONGEN (1877-1968) – 0.3% – Modern
- Francis PICABIA (1879-1953) – 0.3% – Modern
- Piero MANZONI (1933-1963) – 0.3% – Post-War
- Tom WESSELMANN (1931-2004) – 0.3% – Post-War
- Giorgio MORANDI (1890-1964) – 0.3% – Modern
- Günther UECKER (b. 1930) – 0.2% – Post-War
- Josef ALBERS (1888-1976) – 0.2% – Modern
- Robert MOTHERWELL (1915-1991) – 0.2% – Modern
- Rufino TAMAYO (1899-1991) – 0.2% – Modern
- Hans ARP (1886-1966) – 0.2% – Modern
- Emil NOLDE (1867-1956) – 0.2% – Modern
- Paul KLEE (1879-1940) – 0.2% – Modern
- Jean-Paul RIOPELLE (1923-2002) – 0.2% – Post-War
- Alexej VON JAWLENSKY (1864-1941) – 0.2% – Modern
- Albert OEHLEN (b. 1954) – 0.2% – Contemporary
- Frank AUERBACH (b. 1931) – 0.2% – Post-War
SIGEF Brings Inclusion to Davos and a Supportive Vision for a Smarter Future for the World
Sharing the same concerns and goals with the leaders of the global economy who will be gathering in Davos to pave the way “for a Cohesive and Sustainable World,” SIGEF by Horyou has opted to showcase its own commitment to sustainability through the organization of a side-event to offer a complementary and supportive inclusive vision for a better world.
Building on its “Together Shaping a Smarter Future” theme, SIGEF will add social innovation and global ethics to the Davos gathering. The event will take place on the morning of the 22nd of January at the Kirchner Museum. It will kick off with a networking breakfast. Four panels will make the program of the event. They will tackle some of the most challenging issues that the global economy is faced with.
Disruptive Technologies, the Future of Finance, the UN Sustainable Development Goals and Women Empowerment are the topics to be debated. “SIGEF has always been tackling the most important global issues and we are thrilled to initiate high-level discussions around them before Davos’ qualified audience. In the wake of this new technological age, we aim to contribute to the building of a smarter future for the world as we are bringing together, in their diversity, some of the actors who are leading the positive changes we want to see,” says Yonathan Parienti, founder and CEO of Horyou, organizer of SIGEF.
Some of the confirmed SIGEF Speakers include: Ms Karen Wilson, OECD Strategic Partnerships, Ms Katja Iversen, President of Women Deliver, Mr Charles Bendotti, Senior Vice President People & Culture Philip Morris International, Mr Jérôme Perez, Global Head of Sustainability Nespresso, Ms Ann Cairns, Executive Vice Chairman Mastercard, Ms Christine Spite, Tech entrepreneur and WWF Advisor, Dr. Nikolaus S. Lang, Managing Director and Senior Partner at Boston Consulting Group, Mr Xiaochen Zhang, President of FinTech4Good, Mr Adi Mimran, Venture Partner Cyrus AI, Dr Tomabechi, Innovator and Tech entrepreneur, Ms Vera Futorjanski, Innovation Expert and Advisor, Mr Vincent Subilia, Director General, Geneva Chamber of Commerce & Member of the Geneva Parliament, Anna Kletsidou, Head of Social Sustainability & Human Rights at Philip Morris International.
Outlook for Canada’s venture capital market remains robust: KPMG in Canada
Canada’s venture capital (VC) market crossed the US$1-billion threshold in the fourth quarter for the second time in a row to finish 2019 at an all-time record of US$4.6 billion, according to KPMG Private Enterprise’s quarterly Venture Pulse report, a global analysis of venture funding.
“It is really a testament to the growing maturity of Canada’s venture capital ecosystem,” says Sunil Mistry, partner, KPMG in Canada. “The tech ecosystem in Canada is now more independent and self-sustaining than ever before. I don’t anticipate deal activity slowing down anytime soon.”
Canadian VC investment totalled US$1.17 billion in the fourth quarter, up 30 per cent from the year-earlier period and down 34 per cent from a record high of US$1.77 billion in the third quarter. The number of closed deals were lower at 109, compared to 151 in the previous quarter, but were bigger in size.
The fourth quarter was powered by sizeable deals from 1Password, a Toronto-based password manager, Coveo, a Quebec City-based artificial intelligence startup, and Nuvei, a Montreal-based payment processing company.
“The Coveo funding round highlights the strength of Canada’s AI innovation ecosystem, which has spread well beyond its traditional innovation hubs of Toronto, Vancouver, Montreal, and Waterloo,” says Mr. Mistry. “At a sector level, fintech continues to be a dominant area of interest for investors – both from an investment perspective and from an M&A perspective – in part due to the strength of Canada’s banking and financial services sectors.”
Family offices continue to play a key role in Canada’s VC market, particularly in early-stage deals between US$1 million and US$5 million, he says.
Despite global economic headwinds, trade disputes, and potential uncertainty from this year’s U.S. Presidential election, the outlook for VC investment remains positive. “I don’t see much changing going into at least the first half of this year,” says Mr. Mistry. “A lot of funds already have their next fund monetized. They need to spend the money, and they’re looking to stay away from any volatility in the public markets.”
The U.S. remains the epicenter of VC activity, accounting for more than half of global VC investment in 2019, the report says. As 2020 unfolds, deal activity is expected to remain relatively steady, with areas like artificial intelligence, biotech, and fintech remaining very hot. According to the report, private valuations in the U.S. remain near-unprecedented highs, similar to if not eclipsing those seen during the dot-com era, driven in part by availability of capital.
While there are no signs of activity slowing, U.S. investors are becoming more discerning about where they put their money after mixed results from last year’s debuts of newly public companies. “We’re already starting to see investors pay a lot more scrutiny on the unit economics and business models,” says Mr. Mistry.
Unlike in the U.S., valuations in Canada continue to be competitively priced, which is helping to attract U.S. investment and fuelled later-stage funding. “Investors will keep investing where the economic climate makes the most sense, where the deal sizes are more reasonable, and where the venture ecosystem is reliable, and Canada checks off all of those boxes,” says Mr. Mistry.
SOURCE KPMG LLP
ID Ventures Partners with Google Developers Launchpad to Accelerate Michigan’s Tech Startups
ID Ventures, the venture team of Invest Detroit, announced today that it has been selected by Google Developers Launchpad to be its first continental U.S. partner in providing scaling resources to local and statewide startups.
Operating a global acceleration network across Latin America, Africa, Europe, Asia and Puerto Rico, Google Developers Launchpad will work in conjunction with ID Ventures, Michigan’s most active seed-stage investment team, to leverage talent, programming and services for economic growth.
The ID Ventures Powered by Google Developers Launchpad initiative will provide an opportunity for Michigan startups to access Google’s global network, insights from the company’s Silicon Valley-based startup programs, and 20 years’ worth of Google research and best practice insights on building businesses, products and teams at massive scale. ID Ventures was chosen because of Michigan’s robust startup ecosystem in which the team is firmly rooted, providing capital, programs, mentorship opportunities and support to early-stage startups in Detroit and across the state.
“This is truly a win for our local startup community,” said Patti Glaza, managing director of ID Ventures and executive vice president of Invest Detroit. “The partnership will give access to industry experts, startup training and needed services that will help our companies scale and successfully exit, moving us even closer to our vision of making Michigan a startup and technology hub for the Midwest.”
Markets outside of Silicon Valley are increasingly impacting the global startup and technology ecosystem. Though it is easier than ever to start a company, access to success methodologies, expert mentors, and ecosystem best practices for building companies remain unevenly distributed. As Google is a thought leader in building and scaling products and businesses using the most advanced technologies, this partnership and its resources will help ID Ventures’ portfolio companies, which includes some of the fastest-growing companies in Michigan, and other startups in the community scale exponentially.
Google Developers Launchpad focuses on developing companies and their ecosystems over the long term.
“Google is thrilled to expand our partnership with ID Ventures and its exceptional startup portfolio” said Kevin O’Toole, Google’s Head of International Growth for Launchpad. “The Powered by Google Developers Launchpad program is about empowering startup communities around the world and helping them leverage each other for insights and resource sharing. We are thrilled to expand this program into Detroit and the state of Michigan.”
SOURCE ID Ventures
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