Valentine Willie shares his art investment strategies

By Chan Quan Min

The Southeast Asia Art Capital fund managed by renowned art dealer and gallery owner-operator Valentine Willie will give investors more than just financial returns. Willie will be on hand to help ease investors into the booming Southeast Asian art scene. He measures the success of the art fund on how many investors the fund can eventually convince to become fully-fledged art collectors. In the third part of our series, he shares with KiniBiz readers some of his art investing strategies.

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Best known as a gallery owner-operator across the Southeast Asian region, Valentine Willie, in close to two decades, built up a network of commercial art galleries in Kuala Lumpur, Yogyakarta, Manila and Singapore under the Valentine Willie Fine Art (VWFA) name.

But in recent years, Willie has gradually pulled out of running gallery spaces in favour of ad-hoc projects under the Valentine Willie Special Projects (VWSP) banner.

 A 2012 interview quoted Willie as saying he was looking to “disentangle” himself from commercial activities. In the same interview he claimed, “I’m not leaving the art scene, I’m just going to be involved differently.”

 Jump forward to 2014 and Willie’s latest project is setting up Malaysia’s first art investment fund of its size and scale. Art funds are not a new concept; they have been around for a decade in the West, pooling investors’ money to invest in artwork with a view to capitalise on appreciating prices.

But unlike most other art investment funds, Willie and his partners plan to do more than generate cash returns for investors.

In an exclusive interview with KiniBiz, Willie spoke about the need for the Southeast Asian Art Capital fund, as it is aptly named, to engage and inculcate passion for collecting in its members. More than anything, the fund should be seen as a low-risk entry point for investors who want to grow their interest in art.

As an investment vehicle, putting money into an art investment fund would compare better than going it alone, said Beverly Yong of RogueArt, a Southeast Asian contemporary art consultancy.

“What we would say is that, if one really did want to acquire art purely for investment and not for a personal collection, it would seem much wiser to do this through a fund with a manager with experience and access to a broad range of information in the field than simply ‘punting’ or relying on ad hoc advice,” Yong explained.

As well as investor education, Willie said he wanted to see the art fund take on some of the functions of a commercial art gallery. This would entail events to promote the collection or introduce to the public, an up and coming artist.

Nevertheless, the ancillary functions of the fund would not distract from the main goal, which is to multiply investors’ money, Willie assured.

The first of his three-point strategy of art investing is to focus the purchases on works that could later be sold to private museums. While Southeast Asia is ostensibly lacking in ‘institutional infrastructure’, this is set to change with a raft of private museums to be built in the region before the end of the decade.

In a 2012 interview with The Star, Willie said, “In any cultural city, the top of the pecking order should be the museums. In Southeast Asia, the auction houses and certain collectors are calling the shots and setting the trends. There is little scholarship and serious writing about the arts. That’s what we need to develop.”

Two years on Willie is still informed by the same views. His responses to questions by KiniBiz on his investment strategy are reproduced below.

On the varied histories of Southeast Asian art and selecting the right artists to buy into:

What’s happened is that a few favourites have gone up. (Collectors) have been very selective, there are a few million dollar ones out there. These would be what you call the masters generation. Our Masters are alive, Indonesian masters are dead. The Philippines masters are several generations dead, and yet the same names keep cropping up. Why? Because history is being written. There are huge gaps in Indonesian art history that remains unwritten, underexposed and that explains the first strategy which I call the dead or almost dead strategy.

 The fund would go into research into who these artists could be, and why they should be revived. Identifying artists who have gone, because in the rush to claim the masters we have forgotten the second and third generation. Mostly because there is no historian…

40% of the fund (would be based on second to third generation artists). Masters have already reached their peak.

On the growing force of institutional buyers:

You’re going to have all these museums opening up. They are going to collect what? They are going to collect masters. And who will the middle class look to buy art, they look to the museums.

A key part of this whole fund is building on the fact that you are writing history. And you’re betting on the side of history because you have inside knowledge – which is me. I’ve operated in the region as a dealer and the 64 thousand dollar question is what is good art?

And there are many, many factors. And ultimately you… listen to the museum, and that’s why we want to create the museum. Museums are being created as we speak. It’s being able to understand what these museums want.

On the art fund commissioning series of works by selected contemporary artists, Willies second strategy:

Some of the most exciting art being made is actually contemporary art. Because society’s going through such momentous changes right across the region. All of that is vital, cogent and the art reflects that.

I the old days artists used to prepare – I will give them 16 months, minimum 12 months – they don’t do more than one show a year. You don’t want people to think ‘oh he’s too productive, he’s churning them out’.

Because the market has become so buoyant in the last six years (the artists) can’t cope anymore. This is their time in the sun, they’ve struggled for the last ten to twelve years and now they can paint lots to cover their nest egg, that’s all understandable.

Consequently the idea isn’t as clear, the painting isn’t that good because they rushed it – they do four to five solo shows a year across the world, some of these artists.

I work with all these artists on a long-term basis: I always give them the luxury of time. Before I couldn’t guarantee before the end of the show they would get enough money to live. With this fund I can guarantee them that.

Is it not a little odd that you will create a show of the commissioned works, but as everything has been purchased by the fund, there is nothing for sale?

Well that’s when you create the demand. At the end of the period if (the artist) really want to see the show – let’s do a catalogue. But everything is sold at the show, sold to the fund. See, for the artists they like to see how successful they have been in their original idea.

On ‘selective trawling’, Willie’s third strategy:

The third one if the most fun of all. Its called selective trawling. Selective trawling is being able to identify works in a auction catalogues or in what people bring to you and being able to say this painting is undervalued. Why? Because of ignorance – people don’t know enough. Just like everything else. You go and buy something and you don’t know that this is a diamond, and then you go and look at it and it’s a diamond.

Because I’ve been doing this for so long people bring stuff to me and sometimes on the market is worth this much. And I pay them this much mainly because ‘the history is not written’. So I do a little bit of research and find out I can tell a different story from this painting – it becomes worth much more.

The other thing is I go through auction catalogues. I bought these two works at Malaysian auction markets. This one is RM7,000, the other RM11,000. When I’m finished telling the story behind these paintings they will be worth three times as much.

On the waves the fund could make with an eventual fund size of RM30 million:

A US$10 million fund is small enough to not be 10% of the market and big enough to actually make an impact. You can’t be too small or too big. Too big and you become a slave to the market.

But still big enough to make an impact in the sense people will be watching what we buy and people are going to ride on that. (The fund) needs to be able to buy (art) first before anyone else will.

On programmes to engage the fund’s investors:

It’s (an investment) without too much risk – more informed choices – and we are going to do a scheme where we allow them to keep some of the paintings, as in loan it out to them.

I would also like to keep (the operation) personal, up to 50 people so that I am always available and investor’s can call me up for advice.

Some of the things you are proposing, such as holding shows for new artists and investor education sound very much like what you used to do in galleries, and your bringing in some element of that into the fund.

That’s part of it. Part of the buyers buying is the glamour – don’t forget that – the cachet of just owing art. A little bit of style a little bit of piazza because art owning is inspirational.

If 20% (of investors) eventually collect art because they invested in a fund that made money but also made them look at art differently then that would be a successful fund. Because I’m educating a generation of collectors who will eventually give to museums.

Would you say there is a risk investors take on your reputation because the fund is so dependent on your decisions?

Yes, I think one of the things some investors are saying is ‘its all dependent on you Valentine’. It’s not by choice I wish there were more people as enthusiastic and passionate as I am then I wouldn’t have to do it myself.

(The investors) would only need me so far as I will have an exit strategy for everything that we buy. The team has given me boxes to tick before I even spend the money. And after I spend the money I would have to do projections, on how much this would be worth in seven years.

Apart from justifying every purchase I make (on behalf of the fund), I will also do up for each artwork who are the likely future buyers and how (the fund) will sell it.

The auction market is a key part of it and it’s because there is a very strong secondary market. We are no longer dependent on Christie’s and Sotheby’s.