Alternative investments such as art, wine and furniture are becoming increasingly appealing to wealthy individuals, as they look at more use...

Alternative investments such as art, wine and furniture are becoming increasingly appealing to wealthy individuals, as they look at more useful ways of investing their money. Investing in art can be a lucrative option, if you get it right. But, like most other forms of investing, there is no certainty that the piece you buy will go up in value. That is why most advisors on art or furniture investments suggest that you should buy something that you like, so if you do find you cannot part with it because you will not get the price you had hoped for, you will not be stuck with something you abhor. Spencer Ewen of art advisory service Seymour Management, who offers an art advisory service to clients of Butterfield Private Bank, said: “We are here to make people smile. There is a lot of money around, and when there is a lot of money around, people spend it on nice things. “In the 1980s, the art market was driven by the Americans and Japanese, but now it is driven by everyone. People work hard for their money, and if they choose to buy things with their money, then good. “I think tastes are changing and moving away from the traditional. There is something about the way that people are doing up their homes now, it is becoming more modern.” Mr Ewen said his clients tend to be between the ages of 35 and 55, and either successful professionals or entrepreneurs. It is very difficult to pin down what a good investment would be in the art world, and often is a matter of personal taste, both the investor’s initially, and then the potential buyer’s taste at the other end. Matthew Paton of auctioneers Christies, said: “The one thing we always say is that you should never encourage someone to buy art as an investment, as it is not the most predictable of things.” However, he said there were a “fair few” examples of pieces that had been sold at auction a few years after they have been bought and the price has gone up significantly. For example, he said: “We had the Badminton Cabinet from the Medici furniture makers in Florence for sale in 1990 and it made £7 million. But it was for sale again last year, and made £19 million.” That means the piece had nearly tripled in value in 16 years. Mr Paton added: “Contemporary art seems to be a big buzz right now. But some others that crop up from time to time include football memorabilia. This starts at as little as £150, so you are not necessarily talking millions to invest.” Mr Paton said that in 1999, Christies had a football memorabilia sale that raised £45,179. Last year, it became the first auction house to achieve a sports sale that exceeded £1 million. However, he also said that for contemporary art, Andy Warhol was always a good measure, with similar works using a dollar sign screen print having given “good value”. He added: “There is also quite a premium in the market for items that have never been offered for sale before. If it is new to the market, it makes the piece more desirable.” The private banks offer advisory services relating to art investments, along with all of the other bells and whistles high net worth individuals expect from their bankers. Heather Maizels, director of Barclays Wealth, said: “Our art services essentially help our clients enjoy and use their wealth in whichever way suits them best, by building collections or adding further, and adding better quality, or new, areas of interest and potential. “We also help to develop their interests - we help clients discover and explore what ‘art’ can offer - particularly in the regions. For example, in Manchester we work closely with the Manchester City Gallery. “It can also support family philanthropy. Many clients have found the art world can provide interesting opportunities to bind a family together and provide a continuing interest. In London we work closely with the National Gallery and Tate Britain. “Art is a very good choice for anyone looking for an investment which combines potential with tax-free aesthetic enjoyment. Art can provide diversification from other investments, such as equities and bonds, and can be a useful asset management tool for clients looking to hedge their portfolio. But, we generally advise our clients to buy what they like and caution against paying the wrong price because an artist or style is fashionable.” Of course, once you have the artwork, it is important to keep it in the right way to avoid any loss of value through mistreatment. Alexandra Richards, senior client manager for insurance broker Aon Artscope, said: “It is down to us as the broker to make sure they have the right security and protection in place, as well as an idea of risk management. “That includes making sure the paintings are actually secured to the wall, making sure that a door could not swing open and puncture the canvas. It does not necessarily have to be paintings we consider, although they are probably the most valued. “With most clients we would look to do a client visit, and sit down with them to find out who the clients are. It gives us an idea of which insurance market to approach to cover the risks. Once you have been to the place that needs cover, you can determine the risks so much better.” Ms Richards would also be able to look at the other items the art investor had in their home, and then would be able to sit down with them and find out what their needs are. The risk management service on offer would depend, in many cases, on whether the client is a private investor or perhaps a firm of, say, solicitors or accountants looking to “use their money to decorate their office as well as being an investment”. Ms Richards added that a “communal office would have more people in than your home”, which would create a bigger risk to the artwork. Not all art that is bought as an investment will be hanging on the wall of a home or office, said Ms Richards. In some cases, it will be put into storage, and that could mean needing a specialist facility. She added: “It would need to be raised off the ground, for example. But usually, they are buying the art because they like it, if it happens to make them a return, then so much the better.”