‘Big chill’ feared as Frieze Art Fair begins

LONDON - Will Chinese buyers ride to the rescue? Will the super rich decide painting and sculpture is a better investment than volatile stocks or risky debt? Those are the questions in the art world as hundreds of galleries and collectors descend on London for the annual postwar and contemporary frenzy centered around the Oct. 13-16 Frieze Art Fair in Regent’s Park.

The annual event has spawned a merry-go-round of auctions, rival fairs like the Pavilion of Art & Design, major exhibitions, gallery openings and, of course, endless glitzy, champagne-fuelled parties. But after two years of strong growth in prices, particularly for top artists, global financial turmoil once again threatens to bring the chill of uncertainty to the week as it did in the wake of the 2008 Lehman Brothers collapse.

Matthew Slotover, co-founder of Frieze who is considered one of the art world’s most powerful figures, conceded that concerns over slow economic growth and Europe’s debt crisis could weigh on the fair.

But he, like many others, argued that investors may prefer to put their money into a painting than a paper asset. “It is something tangible and real,” he told Reuters in a recent interview, stressing that personally he would not treat art as a financial investment alone. “In an age where people are losing faith in paper money, in currencies and in equities, it’s one of those assets that people feel, well, at least I’ve got this actual thing.”

More and more frequently experts draw a distinction between the top end of the market - works by household names that rarely come to the market - and midrange art priced, say, between $100,000 and $500,000.

Anders Petterson, head of ArtTactic, which tracks investor confidence in different sectors of the art market, saw his midrange indicator slump from nearly 90 percent in June to less than 30 percent in October. Over the same period the indicator for works valued at $1 million or above slipped slightly but remained over 90 percent.

One “wild card” this week could be demand from Asia’s growing number of ultra-wealthy collectors. A few years ago it was Russian oligarchs who were snapping up much of the world’s most expensive art. Now the focus is firmly on China as the land of the “modern-day Medicis.”

Recent sales at Sotheby’s in Hong Kong gave a mixed picture of Chinese demand for art and luxury goods. The auctions raised $411 million in spite of difficult conditions in financial markets, yet the total was down from April and of the works on sale, contemporary art struggled most with more than a fifth of lots unsold.

Reuters