Believe it or not, you can invest in alternative assets and grow your wealth while creating a vibrant arts sector and creating opportunities for dynamic African artists. Nando’s can show you how.
American writer, theologian and mystic Thomas Merton wrote in No Man Is An Island: “Art enables us to find ourselves and lose ourselves at the same time.” The quote continues: “The mind that responds to the intellectual and spiritual values that lie hidden in a poem, a painting, or a piece of music, discovers a spiritual vitality that lifts it above itself, takes it out of itself, and makes it present to itself on a level of being that it did not know it could ever achieve.”
The power of this prose is its point that art is indeed a salve to our souls. In a world bombarded with news of famine, war, corruption and abuse, there is sweet respite to be found in the beauty of art. Furthermore, investors are increasingly becoming aware of their power to uplift and support artists and the art world by means of their support.
Spurred on by strengthening motives of social responsibility, art investment is gaining traction. Dr Julie Taylor, Founder and owner of Guns and Rain online art platform, says: “Art investing, particularly in a country like South Africa, allows for investment with a purpose, not simply for investment growth.” She believes investing in art can have a positive social and developmental impact for local artists and the arts more broadly.
South Africans are, by their nature, avid art collectors. Corporates, state-owned enterprises and family trusts have amassed millions, if not billions of rands worth of original artworks over the years, many of which can be viewed at private art museums around the country. However, until now these investments have more often than not formed part of a company’s balance sheets rather than as contributors to their triple bottom line.
Africa’s art scene
Make no mistake, it’s not all about philanthropic intentions. South Africa’s contemporary art scene can be a real money spinner. A deeper look will reveal more than wooden giraffes and gauche sunsets.
Works by local artists Irma Stern, Jacob Hendrik Pierneef and William Kentridge, to list a few, are generating stellar returns on the local and international art market. Kentridge’s Tête de femme bleue fetched €405 000 (about R6 million) in Paris in April this year, Stern’s 1943 portrait of Freda Feldman in Basuto Hat was sold in Johannesburg for R4.1 million in 2016 and her Sunflowers sold for a staggering £416 750 (R7.1 million) in London in May. Kentridge’s World on its Hind Legs sculpture raised £125 000 (R2.2 million). In 2013, Pierneef’s Landscape Stellenbosch fetched £713 250 (R12.3 million), Stern’s Congolese Beauty sold for £541 250 (R9.3 million), and Vladimir Tretchikoff’s Chinese Girl, fetched £98 200 (R1.7 million), all at the same auction.
In recent years other African artists have also begun fetching record prices at auction. In May 2017, Ghanaian artist El Anatsui’s wall piece Earth Developing More Roots sold for £728 750 (R12.6 million). An African art collection incorporating pieces from the Congo, Gabon, Mali and Liberia sold for a collective US$41 million (R545 million) at New York’s Sotheby’s in November 2014, which included a rare Senuo Female statue carved by an unknown Ivory Coast or Burkina Faso artist, valued at US$12 million (R160 million). Nigerian sculptor Ben Enwonwu’s The Mirror Sculptures raised £361 000 (R6.2 million), three times its expected value in London. And an Anatsui sculpture entitled New World Map fetched £541 250 (R9.3 million) in 2012.
For the good of art
While such figures show the inherent value in art, the industry is increasingly focusing on how to expose African art to international markets, making the discussion less about the money and more about developing contemporary African talent.
Former Virgin Group shareholder Robert Devereux, founder of the African Arts Trust, fell in love with Africa while on sabbatical. He is now fully committed to uplifting artists on the continent. He told London’s Financial Times: “[The trust’s] primary objective is to act as a catalyst for the emergence and growth of locally managed and sustainable contemporary art organisations… It’s really about supporting grassroots organisations.” In his personal capacity, Devereux also supports young artists in Johannesburg by offering bursaries.
Another organisation spearheading African art internationally is the 1:54 Contemporary Africa Art Fair, which is dedicated to promoting contemporary African art. Founded in 2013 by Touria El Glaoui, a former banker who was close to the art world, being the daughter of a Moroccan artist, 1:54 hosts annual exhibitions in London, New York and Marrakech. She told Village Voice, New York’s online cultural guide, about the work she does in the emerging art space: “For younger, less visible artists, its’s something that can give them visibility and that they can use as a strength.” El Glaoui adds: “We still need to accelerate getting people engaged with contemporary African artists. If we get a scenario that is aligned with the rest of the world, then our mission will be complete.” Devereux serves as an adviser to 1:54.
Locally, online platforms such as Guns and Rain are also working hard at getting African talent exposed to international markets. Taylor, who founded the initiative, explains: “Art investing – particularly in a country like South Africa – also allows for investment with purpose; not simply for growth. It can have a positive social and developmental impact for local artists and the arts more broadly.” The e-gallery promotes a number of established and emerging Southern African artists and states a commitment to fair and ethical trade. Taylor ensures her site is accessible to all the world’s major markets by having it available not only in English but also in Mandarin, French, Portuguese and Spanish.
Nando’s more than just chicken
Art platforms and organisations can only do so much, however, opening up the way for business to support the arts. One organisation that can act as a case study for South African businesses looking to give back through art is Nando’s. Co-founder and former CEO Robbie Brozin is fond of saying:
“If you’re not in business to change people’s lives then what are you doing?”
When it comes to the Shared Growth art space, Nando’s is proud of its work within the local art arena and as a patron of the South African art scene. With more than 19 000 pieces of art in its collection, Nando’s boasts the largest single collection of South African emerging art in the world, and the largest collection of South African art outside the country. This collection is not hidden away either. It is housed in the chain’s 1000 restaurants across 24 countries.
Although Nando’s supports more than 320 artists, it did not go out looking for top young artists. Instead the company sought the expertise of development programme Yellowwoods Art. The programme creates opportunities for artists and works at all levels, starting with emerging artists through to some of Africa’s top artistic talent. Their programmes include the Spier Arts Academy, the Creative Block and Qubeka. And, more recently, the Nando’s Chicken Run and the Nando’s Artists Society.
The Nando’s-Yellowwoods partnership fits in with the company’s culture of making a difference. Rather than making a one-off contribution to artists, the company focuses on providing regular support and income to artists through strategic programmes, ensuring artists’ careers are being developed at the same time as the chain continues to build its extensive art collection.
The success of the programme is explained best by Brozin, who said at the launch of a new Nando’s outlet in the United Arab Emirates recently: “A lot of people talk about a social programme. We look at art as being an integral part of making our chicken taste better.” Art is central to the Nando’s brand.
“A lot of people talk about a social programme. We look at art as being an integral part of making our chicken taste better.”
Nando’s has also joined forces with 1:54. The group hosted a stand at the 2017 1:54 exhibition showcasing four of its artists: Maurice Mbikayi, Regi Bardavid, Pat Mautloa and Lezette Chirrime. Together these artists contribute over 400 pieces of work across Nando’s stores globally.
- Since the 2008 financial crisis, physical assets like gold and art have become attractive investment options for many wealthy individuals.
- Art investing allows for investment with a purpose, not simply to achieve investment growth.
- South Africa’s contemporary art scene can be a real money spinner, with works from artists like Irma Stern and William Kentridge fetching millions at auction.
- In recent years other African artists have also begun fetching record prices at auction.
- The industry is increasingly focusing on how to expose African art to international markets, making the discussion less about the money and more about developing contemporary African talent.
- One organisation that can act as a case study for South African businesses looking to give back through art is Nando’s, which supports more than 320 artists and has more than 19 000 pieces of art in its collection.
- Competitions like Absa’s L’Atelier and the SA Taxi Foundation Art Award help to raise the profile of young African artists.
Nando’s is not the only business in South Africa adding its weight to the local art scene. Absa’s L’Atelier competition, which is run in conjunction with the South African National Association for the Visual Arts, is aimed at artists between the ages of 21 and 35 and has now spread to include artists from South Africa, Botswana, Zambia, Ghana, Kenya, Uganda, Tanzania, Mozambique, Mauritius and Seychelles. The competition offers winners a range of fully paid residencies in some of the world’s top art cities.
Other initiatives offering vital support, professional development and exposure for local talent include Sasol’s New Signatures, FNB’s Joburg Art Fair and RMB’s support of Assemblage studios.
The Arts and Culture Trust, in association with Nedbank, is another opportunity for young artists to secure funding. Twelve recipients out of 688 applications receive a grant in 2017. “Grants and awards help us to take our work further. They also help a lot to raise our profile. People want to see these kinds of accolades on your CV,” says Thandi Ntuli, a Johannesburg-based jazz musician and grant recipient.
The SA Taxi Foundation also offers an art award. Its 2017 winner was painter and print maker Banele Khoza, who won R50 000. The competition’s hallmark is the taxi decals designed by the winner and runners up. Each work is wrapped on 10 mini-bus taxis for a year. The value of this exposure is around R600 000.
A number of local incubators have also been established to give local talent a boost. Joule City Arts Incubator, the South African Business Women in Arts, Arts and Culture, the Kentridge Art Incubator Project and the Department of Arts and Culture Incubator Programme are just a few programmes supporting young South African artists.
Measuring the value of South African art
While support and exposure are vitally important, the sea-change in how art is received and the opportunities it offers will only be felt when investors see the sense of buying local art. Since the 2008 financial crisis, physical assets like gold and art have become attractive investment options for many wealthy individuals, who view them as safer options.
Attempts to understand art as an asset class have even resulted in dedicated art indices being created to measure the value of art as an investment. Wealth management firm, Citadel, launched South Africa’s first art index: The Citadel Art Price Index (CAPI). The index, which features 100 local artists, tracks the selling price of their artwork across a number of auction houses and auctions. The index has shown that in a world of political and economic uncertainty, art as an investment has outperformed many investment classes since the launch of the index in 2011. In South Africa, CAPI has outperformed bonds, cash, and property, coming in second only to the JSE All Share Index. Globally CAPI has also held its ground against some of the major global indices.
In his 2016 overview, George Herman, Citadel’s Chief Investment Officer, noted: “[The] demand for real assets is bound to benefit high-quality art, albeit with some time lag.” He added: “Unfortunately only the top-end, trusted names will benefit from this search for safety.”
This insight highlights the importance of developing artists to become brands in their own right, thereby bringing their work to the attention of global investors.
Unveiling the value
Art as an investment within the Shared Growth space is harder to sell than a pure investment. And many corporates and investors remain reluctant to put money into a sector over which they have little or no knowledge.
Guns and Rain’s Taylor explains: “There is a substantial lack of knowledge about, or understanding of, contemporary fine art by the wider public. In part, this is due to the fact that art is neglected as a school subject in most countries in the region, and there is often very little government funding for the arts.”
She believes stakeholders within the industry have a responsibility to drive education: “We need further education and awareness to foster appreciation of contemporary art and its social and economic value. There is a role for all the players in the art industry to push together for this visibility, from artists, gallerists and dealers, to critics, auctioneers and academics.”
“The competition’s hallmark is the taxi decals designed by the winner and runners up. Each work is wrapped on 10 mini-bus taxis for a year. The value of this exposure is around R600 000…”
Taylor advises anyone who wants to gain exposure to art to work with those in the know. “Corporate or business collectors should be sure to work through reputable advisers, gallerists and dealers, and ideally invest early in young artists with promising trajectories. Bear in mind that art is a long-term investment.”
She is, however, bullish about the future. “African art is on the ascendancy, so keep an eye on the bigger picture and learn as much as you can before making your decisions.”
Article first published in the Investment Management publication, Gradient. Gradient provides views and opinion pieces, both internal and independent, on topical issues in the financial arena and economy. For more information, please call us on +27 (0) 860 111 456, email email@example.com or contact your financial adviser.