Q2 has been another excellent quarter for us. We welcomed a significant strategic investor, saw more evidence that our long term market thesis is gaining traction, made a number of excellent acquisitions, a couple of sales and progress on a number of loans from the collection.

Yehudit Sasportas, 'Engadina', 2005 

Fund
Our assets under management have reached a $20 million milestone thanks to the entry of a new strategic investor, marking a first doubling of our size since the idea to create the collection sprouted in early 2011. 

Collection
With the new assets we have maintained our course focusing on three key markets: Africa, China and South America.
Please see our recent acquisitions to get a flavor of the diverse works we have been adding.

Performance
Despite a few realizations, this quarter our NAV growth remained relatively constant, meaning that our sales proceeds have been broadly in line with our carried book values. For more information, see our Q2 2014 Factsheet.

New Initiatives
As discussed in last quarter’s report, we are developing a new Israel based residency program that should further enhance the artist promotion work we do while at the same time supporting our business objectives.

Press
In April, I was interviewed extensively by the Italian magazine ArtEconomy24, the result of which was published online in English and Italian. I was also interviewed for Ynet (Israel WebTV) on the pros and cons of art versus real estate investments.

Art Market

At the risk of sounding a little like a broken record, I will again report an incredibly robust market. Not only is the contemporary market realizing record-breaking results at auctions, art fairs and galleries, but also the Impressionist and Modern auctions both in New York and London, confirm that appetite for art collecting and investing is particularly buoyant. This can be seen especially among buyers from developing markets such as China, Russia and the Middle East; precisely the premise on which our collection has been founded.

Read our recent analysis on the broader implications for the art market and prices for contemporary art in developing markets here.  Travel

In May I flew to Honk Kong for the second edition of Art Basel Hong Kong and then continued to the mainland, spending several days in Shanghai and Beijing. Mostly I visited galleries and artist studios but also attended the opening of the new Yuz Museum in Shanghai, owned by one of Asia’s most prominent collectors, Budi Tek. I also visited a new exhibition at the UCCA which made headlines primarily due to Ai Weiwei’s strange withdrawal of his works.

In June I headed over to Basel for what is arguably the most prominent event of the contemporary art world. Art Basel did not fail to impress. The vivid crowd and rush of excitement was evident from the outset with galleries immediately reporting multi-million dollar sales. Particularly encouraging for us was to see how many of the artists invited to present at the Unlimited section and curated 14 Rooms performance section, were from developing markets, and how many of those we have been collecting in recent years; Haegue Yang from Korea; Xu Zhen, Yang Fudong and Zhang Huan from China; Mikhael Subotzky from South Africa; Marina Abramovic from Yugoslavia and Sudarshan Shetty from India  – see images on Instagram. Evident also was the fact that almost every major gallery exhibited at least one significant Chinese artist  at their booth, surely a means to facilitate better ties with the wave of new collectors from China.

Highlight

Another interesting artist from Africa invited to Unlimited was Pascale Marthine Tayou who presented an immersive and complex installation comprising of videos, sculptures, found objects, paintings, collages, rubble and much more.  I have been following Tayou for several years and now believe he is on the brink of firmly establishing himself as a leading voice in African contemporary art. We have therefore just agreed the acquisition of three excellent works for the collection that are demonstrative of his broad artistic practice and thus we dedicate an artist spotlight to him.

Sales

We had three sales this quarter, the most significant of which was a beautiful sculpture, 'Karma' by Korean artist Do Ho Suh. The work was acquired in 2011 but had since sold out in the primary market with several examples going to important museum collections. Demand for the piece seemed very strong and we were pleased when it sold at the Sotheby's Hong Kong evening sale for $778’711, the second most expensive work by the artist ever to sell at auction. It generated a net investment return of 43% for us, over slightly less than three years.

Loans
We unveiled a few important loans to the Tel Aviv Museum of Art this quarter, including our Ai Weiwei ‘Forever’ installation and the historically significant performance work of Marina Abramovic, ‘Rhythm 0’ from 1974. The latter work generated a lot of press in Israel, particularly as it was unveiled in close tandem with the artist's current performance at the Serpentine Gallery in London. The press has been enthusiastic about the work citing a stark contrast between Abramovic's original investigation of the human condition with that of her more recent works deemed too self-centered.

Further, we agreed to lend our very large William Kentridge drawing ‘Anti-Entropy’, associated with the world-renowned ‘Refusal of Time’ project that was first shown at Documenta, for the Kentridge exhibition currently being planned at the Ullens Center for Contemporary Art in Beijing. We have also received a request to lend our Ai Weiwei ‘Grapes’ work to an exhibition of Chinese contemporary art at the Garage Center for Contemporary Culture in Moscow. Both exhibitions will be held this fall - a very busy lending period for us with additional loans of three works at the Museum of Arts and Design in New York, a large canvas by Rodel Tapaya at the Gwangju Biennale in Korea, as well as the ongoing loans at the Tel Aviv Museum of Art.

Talks

I was invited to present my views on art investment at DC Finance, the largest annual wealth management conference in Israel in May. I have also accepted an invitation to speak at ARTfi Berlin in September, during the Berlin art week and ABC Art Fair. 

Team

We are delighted to welcome Filipe da Costa Leite in a new role as Director of Business Development. Based in London, we will now have a permanent presence in the finance capital of Europe.

Filipe was born in 1986 in Porto, Portugal to a prominent banking family. He moved to England to study International Business and Management at Oxford Brooks University after which he went on to forge a career in finance. He worked at Roland Berger Strategy Consultants in Munich as a Financial Services Consultant and at Credit Suisse in Zurich and Singapore as a Junior Relationship Manager in Private Banking.

Coming from a family with a long tradition of collecting fine art, Filipe naturally took interest in contemporary art and studied Art & Business at the Sotheby’s Institute in London. Intrigued by the nascent art fund industry he soon started researching various funds and investment opportunities.

Following an introduction earlier this year by our advisory board member Jonathan Lourie, Filipe was convinced by Art Vantage's strategy, selection process, transparency and objectives, and soon committed a substantial investment on behalf of his family.

During the course of the last few months, we were impressed by Filipe’s astute observations, energy, global network and passion for art. We believe he could be a substantial contributor to our growth objectives and therefore created a role in which we are confident his skill-set will come to bear. Welcome on board Filipe!

We are also pleased to welcome Raquela Cohen as our new Research Analyst and Online Content Manager. Based in Tel Aviv, Raquela brings a wealth of experience from previous positions at several commercial London galleries.

Please see our updated Team Page on the website.

As usual, I look forward to receiving your comments, thoughts and suggestions and wish you all a cool and relaxing summer.

Serge Tiroche