Art: The investment to bank on

Corporations now rank just behind the Catholic Church and the British Royal Family as some of the largest private owners of art in the world. From Microsoft to Deloitte, big businesses dive headfirst into the world of paintings, prints and sculptures with glee.

But no companies are snapping up art quite like banks; in fact, they stand out as the clear leaders in the category of corporate art collections. JP Morgan Chase, one of the best-known financial institutions in the world, is also renowned for its vast art collection of over 30,000 artworks. Several are blue-chip pieces too – Picasso-level stuff. Deutsche Bank’s similarly expansive collection is worth a staggering $65m.

Interestingly, many of these companies claim they are not invested in art for the money. Former CEO of Deutsche Bank Josef Ackermann once said, “A company without a collection is like a person without a memory.” That’s a pretty expensive memory.

Corporations invest in art for various reasons, none of which they are ever too clear on. Some do so to liven up their soulless or greedy corporate image; some to aesthetically enrich their spaces and engage clients; and some to diversify their asset portfolios. Locally, banks and other businesses have also been in the art game for decades, for an equally wide array of reasons.

Surprisingly though, alongside those owned by big private brands like Nando’s, Sanlam, Absa and Spier, one of our largest local art collections is held by the SABC – a government corporation. Its collection began as an informal process over half a century ago and has now grown into a behemoth, containing over 1,000 artworks.

The crucial difference between the SABC collection and others is the specific mandate of this government institution. It is a collection formed to represent the country, and one that belongs to its people. The SABC’s curator, Koulla Xinisteris, focuses on acquiring artworks by artists who were neglected and overlooked during apartheid, as well as pieces that speak to the current South African condition.

“All of this is in keeping with the SABC’s mandate as a public broadcaster. Visual art, as a universal medium and language, can connect us all and foster a deeper appreciation for the human condition. Our curatorial focus on diversity and inclusion is in keeping with the SABC’s mandate as a public broadcaster,” says Xinisteris.

This collection includes numerous iconic pieces; it holds not one but five Irma Sterns, the most valuable among them being Seated Arab Man, painted in 1945. On occasion, the SABC Art Collection receives donations from prominent local artists looking to preserve their pieces in the zeitgeist of South African history. Recent donations include works by the late David Goldblatt and Christine Dixie.

Art specialist at Strauss & Co, Wilhelm van Rensburg, says the SABC’s extensive collection is a result of its early collecting and well-timed choices. “[They] acquired very important works, very early, for very reasonable prices.”

So, while the public broadcaster cannot capitalise on these gains, it’s estimated that this collection is worth around R250m. Many of these works have increased in value over time as artists have become more well-known and sought after.

This seems to be a repeating pattern across many corporate art collections – even for those who emphasise that they do not invest in art for financial gain.

It’s in the timing

Rand Merchant Bank’s Carolynne Waterhouse says it is a “pleasing rather than calculated outcome” that their collection is now so valuable. The collection is more an investment in the bank’s culture than a financial investment, she says.

The FirstRand Group merged the FNB and RMB art collections together 11 years ago, and it has been skilfully managed by art executive Beth van Heerden. She contends that the group collects art to engage its employees and clients in the world of art, and to encourage and inspire conversation outside of the humdrum of corporate finance.

The group makes it a point to buy works from up-and-coming young artists, many of whom have in time become world-renowned. For example, Van Heerden says the FirstRand group was one of the first corporates to buy art from Jake Singer, a multidisciplinary artist whose work now sells for eye-watering prices.

This, notes Van Rensburg, is not unusual. Beginning in the 1980s and hitting full stride a decade later, banks sought to “be seen to be supporting young struggling artists and the like” – taking in works from a more diverse group of artists and shedding their conservative European paintings.

FirstRand got in early with now-prominent artists such as Bambo Sibiya and William Kentridge. Waterhouse says pieces by artists such as these were bought 25 years ago or so not for their value then but “because it was good art and a reflection of the times”.

Van Heerden and Waterhouse agree that banks often feel a responsibility to buy art to protect it. While holding major historical value, some artworks can also be too expensive for government institutions to purchase, meaning that private companies often take the lead.

Such is the case for FirstRand’s ownership of politically challenging pieces like Intellectual Poverty by Blessing Ngobeni, or for one of their largest and most onerous pieces to maintain, Confrontation by Edoardo Villa. The massive outdoor sculpture is Villa’s inspired response to the pain, defiance and anger of the 1976 Soweto student uprising.

It cost the bank a hefty sum and took eight months to restore. But Gert Kruger, RMB’s chief risk officer, is not concerned with its investment value. “Our corporate collection at RMB is a repository of history and value,” he says. “We also see it as our way of preserving our history for the opportunity to learn across boundaries – be they racial, social or historical. It’s in this spirit that we preserve and showcase the legacy of Villa’s work.”

Nonetheless, collections like this are worth a fortune. “I think that’s the norm – being north of R200m,” says Van Rensburg on the average value of local corporate art collections.

Even if the intention is not to go searching for investment pieces, the art market has made some pieces worth a pretty penny.

Culture club

Standard Bank has a collection of 1,130 pieces, and is one of the foremost collectors and propagators of South African art. Though they were shy to go into detail on the record about the precise cost of their collection and how valuable some of their artworks are, it is a well-refined and impressive assemblage of pieces.

What Standard Bank did emphasise, though, was their motivation behind their collection. “The bank’s purpose, ‘Africa is our home, we drive her growth,’ is at the heart of our approach,” says their head curator, Dr Same Mdluli. “Guided by this mandate, we support a wide range of initiatives that celebrate artistic excellence, nurture younger talent and showcase the rich diversity of Africa’s creative expression.”

The collection was also started informally, guided by the personal tastes of the chairman of the bank, up until the shift to democracy, when a visual arts committee was formed. “This signalled a strategic shift toward acquiring major contemporary works that reflect the dynamic and evolving landscape of South African art,” Mdluli says.

Mdluli also made the oft-heard comment that art was bought to enhance the environment that the bank’s employees worked in, and clients visited. But many things can be true at the same time, and Van Rensburg stresses the fact that South African art is highly sought after, and that these collections are absolutely viewed as financial investments by the banks.

He notes that the art world is now focusing on buying, selling and collecting pieces by a group of artists known as the Black Modernists. “All the big names – Gerard Sekoto, George Pemba, that whole generation of black artists – have always been neglected. All of a sudden, they have been pushed to centre stage. The spotlight is on them, not only locally but also internationally,” Van Rensburg says.

So, for the banks that began collecting works by these artists 30 years ago, the value of their assets has skyrocketed. “If those corporate collectors [were] shrewd enough and had good advisers, then they are smiling, you know, because they have the top dollar.”

Small and beautiful

Of course, these collections belong to established banks and corporations – many being the backbone of South African business for the last hundred years or so. So why might newer, smaller businesses and banks be voraciously buying up art now?

There are reasons aplenty, as noted by Investec’s Tristanne Farrell. The bank’s Western Cape branch is starting a small art collection, comprised for now of just 40 pieces.

Farrell, a senior wealth manager at Investec, says this is their fresh start. “We moved to our new building two years ago; we sold a lot of the old art we had and started a smaller collection from scratch.”

Explaining the reasons for the de-acquisition, Farrell says that they “wanted our own art in our new building that we had chosen, [so] everyone could feel like they own the collection”. Investec wanted their staff to really understand the artists and their works, and feel like they had a stake in the collection. And, since becoming the key sponsor of the Investec Cape Town Art Fair, the company has delved headfirst into the art scene.

Like almost every South African bank, Investec sponsors the visual arts outside of just purchasing pieces. RMB sponsors the Latitudes Art Fair (among other events), Standard Bank has their Young Artist Award and the anchor supporter of FNB Art Joburg is in the name.

Farrell says the relationship between the cash-strapped art world and deep-pocketed banks feels almost inevitable. “Corporate and private collecting [is] the livelihood of most galleries and artists.”

With funding, local galleries and artists can exhibit overseas, generating interest in South African art, boosting the value of pieces and growing the market. In turn, banks like Investec get to enhance their brand and integrate themselves into a lively and creative culture that greatly contrasts the coldness of corporate banking.

Four of Investec’s 40 new artworks are drawings done by children at iKhaya le Themba, an after-care facility for children living in Imizamo Yethu township, in Hout Bay. These pieces don’t come with a hefty price tag and may never be worth much – but they speak to the company’s ethics and sense of community.

Getting banks to answer questions directly is a bit like trying to grab a very slippery, very intent-on-surviving fish. But Standard Bank’s Mdluli put it very succinctly when pressed as to what the corporate world brings to the art scene: “Private collectors are critical as they drive market value, offer informal patronage, and often support emerging artists before they gain recognition. Collectively they contribute to the development of a thriving creative economy.”

In the end, it’s not exactly a surprise. It’s just good business.

_{Cover image: Art on display outside of RMB’s Sandton head office in advance of the Latitudes Art Fair (including a William Kentridge In Defence of Optimism print).}