The art market: Fairly popular; The rapid growth of art fairs is changing the way galleries operate

The art market: Fairly popular; The rapid growth of art fairs is changing the way galleries operate

Jan 18th 2014 | From the print edition

SHORTLY after The Economist went to press, about 25,000 people were expected to turn up at the London Art Fair. Your correspondent visited just before, as 128 white booths were being filled with modern paintings and sculptures. Dealers clutched mobile phones to their ears or gathered in small groups. They seemed nervous—as well they might be. “I can earn a year’s living in one fair,” said one harried dealer while stringing up a set of lights.Before 1999 London had just one regular contemporary art fair, remembers Will Ramsay, boss of the expanding Affordable Art Fair. This year around 20 will be held in Britain, mostly in the capital. Roughly 90 will take place worldwide. The success of larger events such as Frieze, which started in London, has stimulated the growth of smaller fairs specialising in craft work, ceramics and other things. Art14, which started last year, specialises in less well-known international galleries, showing art from Sub-Saharan Africa, South Korea and Hong Kong.

One explanation for the boom is the overall growth of the modern-art market. Four-fifths of all art sold at auction worldwide last year was from the 20th or 21st century, according to Artprice, a database. In November an auction in New York of modern and contemporary art made $691m (£422m), easily breaking the previous record. As older art becomes harder to buy—much of it is locked up in museums—demand for recent works is rising.

London’s art market in particular has been boosted by an influx of rich immigrants from Russia, China and the Middle East. “When I started 23 years ago I had not a single non-Western foreign buyer,” says Kenny Schachter, an art dealer. “It’s a different world now.” And London’s new rich buy art differently. They often spend little time in the capital and do not know it well. Traipsing around individual galleries is inconvenient, particularly as galleries have moved out of central London. The mall-like set-up of a fair is much more suitable.

Commercial galleries used to rely on regular visits from rich Britons seeking to furnish their stately homes. Many were family friends. The new art buyers have no such loyalty. People now visit galleries mainly to go to events and to be seen, says Alan Cristea, a gallery owner on Cork street in Mayfair. Fairs, and the parties that spring up around them, are much better places to be spotted.

Some galleries are feeling squeezed. Bernard Jacobson runs a gallery opposite Mr Cristea. The changing art market reminds him of when his father, a chemist, was eclipsed by Boots, a pharmaceutical chain, in the 1960s. Seven galleries in Cork Street relocated this month to make way for a redevelopment; five more may follow later this year.

Yet the rise of the fairs means galleries no longer require prime real estate, thinks Sarah Monk of the London Art Fair. With an international clientele, many can work online or from home. Although some art fairs still require their exhibitors to have a gallery space, increasingly these are small places outside central London or beyond the city altogether. One gallery owner says few rich customers ever visit his shop in south London. He makes all his contacts at the booths he sets up at fairs, which might be twice the size of his store. “It’s a little like fishing,” he explains. “You move to where the pike is.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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