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How to grow your wealth by investing in art 

September 8, 2023

Art has always held a unique place in the hearts and minds of people across the world. It transcends cultures, speaks to the soul, and reflects the diverse narratives of humanity. In recent years, Nigeria has emerged as a vibrant hub for the arts, both locally and globally. Its art market has grown exponentially, attracting the attention of collectors, investors, and enthusiasts alike.  

Truly, in a world where financial markets can be unpredictable and economic stability uncertain, many Nigerians are turning to alternative investment options to safeguard their wealth. One such avenue gaining popularity is investing in art. Not only does this offer a means to protect one’s wealth, but it also allows individuals engage with Nigeria’s rich cultural heritage and support local artists. 

The art of wealth preservation 

With growing inflation, wealth preservation is a critical concern for many Nigerians. While traditional investments like real estate, stocks, and bonds have their merits, they can be subject to market volatility and economic downturns. Art, on the other hand, has historically shown resilience in keeping and appreciating in value over time. This makes it an attractive option for those looking to diversify their investment portfolio and reduce risk.  

Art from Dotun Sulaiman's  collection

The renaissance of Nigerian and African art 

Nigeria boasts a vibrant and diverse art scene, with a rich history that dates back centuries. From the terracotta figurines of Nok culture to the intricately carved doors of the Yoruba to the popular Benin masks, artistic expression has been an integral part of Nigeria’s cultural heritage. The recent surge of global interest in Nigerian art, coupled with emergence of world-renowned Nigerian artists, has placed the country firmly on the international art stage.  

One of the driving forces behind this revival is the rise of new generation of Nigerian artists. Visionaries like Ben Enwonwu, Bruce Onobrakpeya, and Yusuf Grillo laid the foundation for contemporary Nigerian art, inspiring a new wave of talent. Artists such as Bunmi Agusto, Njideka Akunyili Crosby, Toyin Ojih Odutola, and Victor Ekpuk are now gaining global recognition, showcasing the diversity and depth of Nigerian artistic expression. 

Read also: See Our Top 5 Paintings From Dotun Sulaiman’s Art Collection 

The growth of the Nigerian art market 

 The growth of the Nigerian art market can be attributed to several factors: 

Global recognition: Nigerian artists are increasingly showcased at prestigious international art fairs and exhibitions, gaining recognition from collectors and galleries worldwide. 

Investor interest: Art investment in Nigeria has piqued the interest of local and international investors looking for alternative assets to diversify their portfolios. 

Art from Dotun Sulaiman's collection

Cultural identity: Nigerian art stands for a unique cultural identity that resonates with collectors seeking authenticity and diversity. 

Economic Growth: Nigeria’s economic growth has created a burgeoning class of affluent individuals with the means to invest in art. 

What are the benefits of art investment in Nigeria? 

Investing in art offers several benefits that make it an appealing wealth preservation strategy: 

Potential for high returns: The value of Nigerian art has shown significant appreciation over the years, with some artworks fetching millions of dollars at auctions

Portfolio diversification: Art is considered an alternative asset class, providing diversification benefits and a hedge against traditional market volatility. 

Cultural significance: Owning Nigerian art allows investors to connect with the rich cultural heritage and narratives of the country. 

Prestige and enjoyment: Art ownership is associated with prestige, and many investors derive pleasure from displaying and sharing their collections. 

Supporting artists: Investing in Nigerian art directly supports local artists and contributes to the growth of the country’s creative industry. 

Navigating the Nigerian art market 

While the Nigerian art market presents exciting opportunities, it also comes with unique challenges and considerations: 

Market knowledge: Investors should educate themselves about Nigerian art, including the history, artists, and trends. Engaging with art professionals and attending exhibitions can help build expertise. 

Art from Dotun Sulaiman's collection

Authentication: Due diligence is crucial to ensure the authenticity of artworks. Seek expert opinions and verify source before making a purchase. 

Portfolio diversification: Diversify your art investments across different artists and styles to mitigate risks associated with individual artworks. 

Storage and conservation: Proper storage and conservation of artworks are essential to maintain their value. Consider factors like climate control and insurance. Coronation Insurance is here to help. 

Exit strategy: Art investment is typically long-term. Have a clear exit strategy, whether it involves selling through auctions, galleries, or private sales. 

Risks and challenges 

Investing in art also comes with inherent risks and challenges: 

Market volatility: Art prices can be volatile and influenced by trends, artist’s popularity, and economic conditions. 

Iliquid nature: Art is illiquid compared to traditional financial assets. Selling artworks may take time and incur costs. 

Authentication issues: The risk of investing in counterfeit or misrepresented artworks exists, emphasising the importance of due diligence. 

Limited regulation: The art market is less regulated than traditional financial markets, which can make it susceptible to fraud. 

Subjectivity: Art valuation is subjective, and prices can vary widely based on individual preferences and opinions. 

Strategies for art investment in Nigeria 

To navigate the Nigerian art market successfully, consider the following strategies: 

Research and education: Invest time in researching Nigerian art, attending exhibitions, and engaging with artists and experts to build your knowledge. 

Diversification: Spread your investments across different artists and styles to reduce risk. 

Long-term perspective: Approach art investment with a long-term horizon, understanding that it may take years for the value of artworks to appreciate significantly. 

Expert advice: Consult with art advisors, dealers, and appraisers to make informed decisions. 

Due diligence: Verify the authenticity and source of artworks before making purchase. 

Networking: Build relationships within the art community to stay updated on market trends and opportunities. 

Investing in Nigerian art offers a unique opportunity to engage with a thriving cultural scene while potentially enjoying financial returns. The canvas of Nigerian art is vast and vibrant, waiting to be explored by those seeking both financial growth and cultural enrichment. 

How Coronation can help grow your wealth  

We focus on three things: Lend, Invest, Insure. See how this aligns with your wealth growth with art.  

On Investment 

Take for example, Zainab, a young professional with a passion for art but uncertain about how to start investing in this dynamic world. While on this journey, Zainab discovered Coronation Asset Management, a trusted financial partner known for innovative solutions.  

Investing in Art in Nigeria

Coronation’s financial advisors sat with Zainab to understand her goals and aspiration explaining how art investment can be a valuable addition to her portfolio, offering both cultural enrichment and potential financial growth.  

Coronation’s specialists guided Zainab through the process, providing insights into Nigerian art, introducing her to emerging artists, and helping her build a diverse art collection tailored to her tastes and investment goals.  

With the business’s expertise, Zainab now confidently navigates the art market, knowing that Coronation Asset Management is by her side, committed to preserving her wealth using art. 

Coronation Asset Management understands that art investment is not just about buying paintings; it’s about making informed choices, building cultural connections, and securing financial futures.

Ugoma Ebilah, an Art Curator and Collector says about investing in art:

Look with your eyes. Buy the things that move you, that you love, and that you can afford. And, even if you cannot afford and you could possibly afford, still buy it. Sacrifice a little bit…it is always worth it at the end.

On Insurance 

But even after you have invested, you need to ensure that your art is preserved.  

Artworks can stand for a significant financial investment. Insuring your art ensures that you are financially protected in case of theft, damage, or loss due to unforeseen events such as fire or natural disasters. This protection helps you recover the financial value of your art. 

Art insurance, which typically covers a range of risks, including theft, accidental damage, fire, vandalism, and transit-related incidents, helps preserve the value of your art collection. If a valuable artwork is damaged or lost, its value may diminish significantly. Insurance allows you to repair or replace the artwork, ensuring that its value is kept. 

If you lend or transport your art for exhibitions, art insurance can provide coverage during transit, ensuring that your artworks are protected even when they are not in your possession. 

Therefore, you can seek customised policies to protect your artworks. Whether you have a single valuable piece or an extensive collection, you would find something tailored that suits your requirements. 

Meanwhile, art curators can help assess the value of your collection accurately. This ensures that you have the proper coverage for your artworks. You can get in touch here for us to assist. 

On Lending 

Using your art as collateral for a loan, often referred to as “art-secured lending” or “art-secured financing,” can be a way to use the value of your art collection to access capital. You only need to carefully consider the terms of the loan and the potential risks. Coronation Merchant bank offers diverse lending solutions as well as other private and affluent banking needs to match your lifestyle.

Pray tell, what are you waiting for? Get in touch with us today.

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