Skate's Art Investment Review 2011 Annual Art Investment Report

Introduction
Welcome to the 2011 Annual Art Investment Report
by Skate’s. Published by Skate’s Art Market Research
since 2006, this report covers global art market
trends and provides forecasts for the coming year.
Our coverage is focused on the universe of global
artists (674 names as of December 30, 2011) whose
works are represented in Skate’s Top 5000, our
database of the world’s most valuable art based on
auction prices. We also follow all publicly traded art
funds and companies operating in the art industry
around the world, tracking their performance with
Skate’s Art Stocks Index.
To learn more about Skate’s Top 5000 and the
artworks and artists represented, please download
Skate’s application for your iPad or visit
www.skatepress.com. For art stocks and art funds
coverage, please visit Skate’s Art Stocks & Funds.
In this report, we focus on the world’s leading
auctions with sales qualifying for entrance into
Skate’s Top 5000 in 2011 (the threshold price stands
at $2.1 million as of December 30, 2011). Skate’s
currently covers 30 auction houses globally, of which
Sotheby’s, Christie’s, Poly International Auction,
Phillips and China Guardian Auctions are by far the
most significant contributors of works to Skate’s Top
5000.
2011 Art Market Overview
� Skate’s Top 5000 total value reached $30.5
billion, and the ranking’s threshold price broke
the $2 million level.
� Average annualized investment returns on the
world’s masterpieces peaked at 4.82%, 1
confirming the strong performance of
�
exceptional artworks amidst global economic
turmoil.
Skate’s Art Stock Index had its worst year since
2008, losing 15% in value in 2011. This
performance came despite robust auction
1 As measured with repeat sales at auctions, includes
auction fees but excludes ownership and transportation
costs, before taxes.
volumes, with the index’s flagship stock
Sotheby’s shedding over one-third of its value in
2011, producing a -35.5% return for its
shareholders for the year as of December 23,
2011.
Perhaps, the key outcome is that throughout 2011
the art market has resisted pervasive global
economic turmoil and instability, with its high-end
segment growing on every measure in 2011
compared to 2010 (see Table 1 and next page for key
results). Driven by a record 119 repeat sales
registered within Skate’s Top 5000 in 2011, the
weighted average returns on Skate’s Top 5000 grew
to an all-time high of 4.82% per annum. Sellers
exiting the market in 2011 saw annualized returns of
7.20% on their works.
Today, to merit entry into Skate’s Top 5000, an
artwork must sell for more than $2.1 million at
auction; 721 such works did so in 2011 for a
combined value of $4.3 billion. These new entries
represent a very diverse universe of 250 different
artists, 81 of whom had no prior record in Skate’s
Top 5000. We note a pattern clearly reminiscent of
2006/2007, when booming demand for high-end art
coupled with a scarcity of works from established
names helped to bring multimillion dollar valuations
to “second choice” artists. As a result, art dealers
and auction houses were and are again now able to
establish price records for less well known art and in
the process feed more names into the pantheon of
the world’s most valuable art.
Typical of such boom times, we have observed a rise
in the presence of living artists, female artists and
artists from BRIC countries. In 2011, 59 new living
artists and 10 new female artists entered Skate’s Top
5000. Notably, 82 BRIC representatives—primarily
Chinese artists—significantly increased their share in
the rating compared to last year. These artists also
occupied top places along with artists who have long
held established auction market records. The only
slight decline was noticed in the average price paid
per work created by BRIC artists: $6 million in 2011
versus $6.2 million in 2010.
2