The Art Of The Deal

In spite of a sales slump, global art advisors are upbeat on India.

SURATH SINGH India Head, Gurr Johns (Photo: Vivan Mehra) SURATH SINGH India Head, Gurr Johns (Photo: Vivan Mehra)

They're known as "hidden persuaders" and their tastes and opinions guide which art works the super-rich buy. They bid millions of dollars at auctions and nobody knows the real purchaser; they dispose of major art pieces and the seller's identity remains secret. Watertight confidentiality is the watchword for this discreet breed known as art advisors.

Now, London-headquartered Gurr Johns - among the world's biggest and best-known art advisory firms -has just opened an office in India. It's the first emerging-market office to be established by the firm which at a venerable 103 years of age is London's oldest established art consultancy. "We keep a very low profile because we deal with leading collectors and people like to keep their budgets, buying and selling very, very secret," says Surath Singh, an on-the-go 40-year-old who heads the India office.

With art prices still recovering from the 2008 global crisis, why has Gurr Johns decided to set up shop in New Delhi? South Asian art auction house sales were up a minuscule 0.5 per cent year-on-year in 2016, totaling $98.1 million, according to British market analysis firm ArtTactic - and that rise was only because sales of Classical Indian art rose sharply.

The top auction houses - Christie's, Sotheby's and Saffronart - saw a 25 per cent plunge last year in sales of South Asian Modern artists that include M.F. Husain, S.H. Raza and F.N. Souza, although that drop was partly attributed to demonetisation. Big-ticket works barely met reserve prices in auctions toward the close of 2016.

Globally, the world's public and private auction house sales were either up 2 per cent in 2016 at more than $45 billion, according to the latest Tefaf art market report, or down 11 per cent from 2015 at $56 billion, if you consult a report commissioned by Art Basel and UBS. Almost half of that is based on estimates of anonymous private sales, which are an extremely tricky area. While India is only a fraction of the world total, China is the biggest-grossing region with an estimated 35 per cent share of the global auction worldwide, followed by the US in the mid-20 per cent range.

"In India, this market is in its infancy - we want to be in on the ground floor. We're here for the long haul," declares Singh. Gurr Johns has advised on $1 billion worth of transactions globally in the past eight years. "There's a chance that growth in the region could be exponential," Singh says, noting India is home to the world's fourth-highest number of billionaires, according to Forbes.

In pre-Independence days, art patronage was confined to royal courts. After independence, India didn't create enough wealth on a major scale. Significant wealth creation happened post-liberalisation. "As a result, India's a new kid on the block when it comes to the art market. The art market is relatively young, creating a need for independent, expert guidance," Singh says.

"I see my next three years as an education phase," Singh says, noting many Indians follow a standard route as they accumulate big wealth. They get a nice car, big house, farmhouse, acquire real estate abroad and possibly a yacht and only then realise "what they have on their walls is a reflection of their personality and tastes" and that they can impress people by owning "serious" art, he says.

There are only a handful of private museums of consequence in India, while China has over 850, according to ArtTactic. "You go to a museum on a weekend and there's no one there. That art background doesn't exist," Singh notes.

As a consequence, art advisors can serve as vital middlemen - the unseen, guiding hand for serious Indian collectors, says Singh. And of course, with art being an "asset class," many collectors want to build portfolios that will appreciate. "We take a flat 10 per cent on the deal, and we'll do everything for you from looking, evaluating to negotiating on your behalf to closing the purchase," he says.

Art advisors are sought after as they're independent. Also, how can a buyer keep track of the global art market, which has exploded to include not just the US and Europe but also the Middle East, China, the subcontinent and South America? "How do you pick the right art work, make sense of what's out there, know the market price, ensure a work's provenance - that's where you need an advisor," says Singh. Art advisors are also prized for connections in what can be a relatively closed system. Top-tier galleries hand-pick clients and have long waiting lists for the biggest artists they want to place in important private collections or institutions.

So what's next? There's concern over the lingering overhang of demonetisation which has inhibited luxury spending. While artists from the Progressive Group such as Husain, Raza, and Souza have dominated auction sales in the last 10 years, recently other schools of Modern South Asian art have been coming to the fore such as the Baroda School -- Bhupen Khakhar, for example, and Nasreen Mohamedi, ArtTactic says, suggesting widening horizons. And contemporary artists like Bharti Kher and Subodh Gupta have been doing well abroad.

The real star has been Classical Art whose prices have soared, despite India's strict 1972 Antiquities and Art Treasures Act banning export of artworks over a century old and obliging domestic collectors to register private antiquities collections with the government.

Auction sales of Indian Classical art jumped nearly 59 per cent in 2016 from the previous year thanks to growing domestic antiquities demand, pointing to a shift in collecting habits, ArtTactic says. Some advisors will get clients to buy one of everything and create a portfolio of blue-chip artists. But there are advisors like Singh who'll encourage clients to develop stand-out individualised collections that will still be great investments.

Like everything in life, though, there are no guarantees with the art market, says Singh. "You should stick to the mantra of buying something that pleases you," he says. It could be on your wall for a long time -- and not just because you like it.

Penny McRae writes on the arts and business