Successful sustainable finance executive Adam Ballin has found a passion other than building Asia's biggest wind farms. He is one of an increasing number of Kiwis investing big in NZ art, driving an unprecedented boom.
Adam Ballin is the business leader behind one of Asia's biggest renewable energy firms, responsible for financing the continent's largest solar and wind farms.
Most New Zealanders won't know his name – but New Zealand's art dealers and auction houses certainly do. He's made as big an impact there as he has in renewable and environmental finance.In just four years he has built up an enviable, and valuable, collection of works by New Zealand's greatest contemporary artists, which he keeps in his homes in Christchurch and Seoul.
He sees himself as a collector first, unlike some people he knows who have to keep some of their investment art in "freeport" warehouses near some of the world's biggest international airports. All his 200 or so artworks hang on the walls of his homes, and his family's homes, he says.
When I call him in Korea, I put it to him that he must have a lot of walls.
He laughs. "There's art that you love, and there's art that's collectable, and there's probably a nice spot in the middle," the 43-year-old says. "By buying them, you're not necessarily going to lose money over the long-term."
Ballin mostly buys more established artists. He has works by Bill Hammond (who died this year) and Colin McCahon and others that he estimates would be worth more than $1 million each. When pressed, he concedes he would have spent about $5m on art since he began collecting four years ago – but he believes his collection would be worth significantly more than what he has paid.
"If I buy something that I purely love from an up-and-coming artist, you're probably going to pay $10,000 or $20,000, but next week it's worth $2000. So what you've got is something you love to hang on the wall. Whereas if you spend a bit more you can get something collectable."
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Ballin has been enormously active, since he first visited Central Otago painter Grahame Sydney in 2017, and was inspired. Buying nearly a painting a week, on average, that makes him a significant player in the New Zealand art market this year.
And it's been a big year. A Frances Hodgkins painting, Christmas Tree, paired with a Henry Moore madonna-and-child sculpture has sold to a New Zealand private collector for $3.5m. An original Banksy painting sold at auction to a New Zealand collector, for $1.7m at Auckland's International Art Centre. Gow Langsford Gallery's John Pule exhibition – nine paintings and two drawings – has just sold out, raking in nearly half a million dollars.
"Next year I will have been in the art business for 40 years. And I've just come to the conclusion that if you hang around in the business long enough, you might actually be able to make some money! I don't wake up in the morning wondering if the next phone call is going to be from the bank." – John Gow, art dealer
This country's art market is hitting unprecedented highs this year as it bounces back from last year's lockdown.
"What we're seeing is a complete and utter record for sales," says dealer John Gow, whose gallery sold the Hodgkins and Moore pairing at the Auckland Art Fair. "This is the strongest the market has been, without a doubt."
Like Ballin, Gow laughs. "Next year I will have been in the art business for 40 years. And I've just come to the conclusion that if you hang around in the business long enough, you might actually be able to make some money
"I don't wake up in the morning wondering if the next phone call is going to be from the bank."
Selling out to Mammon?
Art, as an investment, can be contentious.
There are those in the markets who question the place of such tangible – or "alternative" – asset classes as art, wine and classic cars.
And there are those in the art world who are uncomfortable with the integrity of their art being sullied by Mammon.
As curator of the Fletcher Trust Collection, Francis McWhannell probably has one of the bigger art acquisition budgets with which to play – but neither he nor the trust likes to talk about the money.
In part this is because the 35-year-old brings another perspective as the son of Richard McWhannell, one of New Zealand's leading contemporary figurative painters, and so he knows what it is for artists to have to fight to protect their artistic integrity.
At Fletcher Building's big corporate HQ in Penrose, showing me around the collection he curates, his passion for the artworks is almost as tangible as the assets he manages. Talking about the paintings, their histories, the contexts in which they were painted, he brings them to life. His eyes sparkle behind his glasses. I fill up a notepad with notes I will never need for any article.
Yet there's one aspect he doesn't pretend to know about. "I’m not very well informed when it comes to art as investment," he says.
"Possibly this is an effect of being the son of an artist; I am at best ambivalent about the role of art as a tradeable commodity or a ‘place to put one’s money’." – Francis McWhannell, curator
"I have my own ideas about who is under-rated and bound not to stay so. However, I am considerably more interested in the cultural value of art, and I pay little to no attention to the market unless it concerns an artist I represent or one whose works I wish to buy or recommend be bought.
"Possibly this is an effect of being the son of an artist; I am at best ambivalent about the role of art as a tradeable commodity or a ‘place to put one’s money’."
But others are far more relaxed about the marriage of money and art. Dealer John Gow is one.
Though he won't breach any confidences, Gow is happy to talk in general terms about the big dollars in art today. "We're in the art business," he says. "And we run a business. And businesses don't run unless you make a profit.
"That doesn't mean to say I don't appreciate art on a higher level. But we're in the business of selling art. And we support artists fiscally, emotionally, and through managing their careers. So we play a fairly essential role in that art world."
He has dealt with Ballin and welcomes the entrance to the market of new investors like him, supporting the New Zealand arts. "He really is a great collector," Gow says.
Ballin's collection is spread between his home in Christchurch, where he grew up, and the South Korean capital of Seoul, where he lives and run his company, Equis Funds Group. His company is the biggest private sector financer of solar farms in Asia.
Covid-19 border lockdowns mean he and his family haven't been home to New Zealand for a while – but the regular arrival of New Zealand artworks (purchased sight unseen on the advice of art consultant Sophie Coupland) helps him stay connected to home. He believes that may be a big factor in Kiwi expats investing in New Zealand art.
"What I first loved about art was the way it could transport you to a place, it could bring back memories and feelings you had about a place."
It's a financial backstop too. "It's always nice to know that if you fall on hard times, that you have that potential to sell, that the art has been recognised as having value."
For him, it started with that visit to Grahame Sydney. "My first even goal was to buy something from Grahame Sydney, actually. I really wanted one my whole life, but they're obviously incredibly hard to get, and are very expensive."
So in 2017, he wrote to Sydney pleading his case ... and to Ballin's surprise, he wrote back. "I actually drove down there to see Grahame at his studio. He said to me, what's your interest?"
Ballin explained that he was interested in building a collection, and Sydney urged caution.
"You've got to be really, really careful," Sydney told him. "There's all of these big galleries, there's all of these art auctions, there's all of these people in this industry that are going to try to push you into buying something that, frankly, isn't worth anything.
"Because their job is to sell you art. So you've got to have a very careful and considered eye, or you're going to get conned into something that's not worth anything, aesthetically or financially."
| | SEE THE ARTWORK: The Ballin Art Collection, on Instagram | |
Grahame Sydney has become a supportive – and strongly opinionated – mentor to Ballin, in growing his collection. And Ballin has bought about 12 or 13 pieces from the painter. "Actually, he's just finished a new one this week, which he's sent me. Grahame's art is a good example. It's a bit like wine. What is investable in the art space or the wine space? It's really just the top one percent.
"So you've got to somehow get access to the blue chip artists. You've got to buy them at a good price. And then you've got to hold them for 10 or 20 or 30 years in order for them to really strengthen and appreciate."
And of course, there are other risks to art collecting, too. Ballin
"Buying art without standing in front of it does come with its own perils. I'll get something sent up here and I'll unpack it and go, eugh, that wasn't quite what I expected," Bellin says.
"But then you hang them up, and you live with them for a bit, and you stand in front of them with a glass of wine and you look at them and you appreciate the work the artist has put into them, and you start to get a lot more appreciation for them."
And he has had works arrive that have been smashed in the shipping like one of the big cast lead crystal eels created by Wendy Fairclough at part of her 2.25m long sculpture Tuna Heke. "Fortunately Wendy's a living artist so she could make a new one. If you damage or break an old masterpiece you're not going to be able to replace it!"
Making a dollar
There are other kinds of crashes that pose a threat. At Auckland's Gow Langsford Gallery, John Gow has survived the booms and busts of the 1987 stockmarket crash, and the 1997 Asian economic crisis, and the "particularly vicious" GFC in 2008.
"We had to roll up our sleeves and work bloody hard just to keep up with the overheads," he recalls. "If I didn't have friends in the banking industry, it would have been very tricky for us."
This new boom is unprecedented, Gow tells me.
Artists like Pat Hanly, Don Binney and Michael Illingworth have experienced a "real renaissance", he says. "Five years ago you might have paid $100,000 or $120,000 for a good Binney; you're now paying $400,000, which is a market increased."
"I buy with love, and I hope and pray everything I buy will go up." – Simon de Pury, auctioneer
"And the people who pay that sort of money want to know that that's the value today, and we can only go by what's happened in the past which tells us that the price of those will continue to go up."
"There are million-dollar transactions here. The Henry Moore was sold for circa US$2 million, and the Frances Hodgkins for NZ$750,000. And we've sold several McCahons north of a million dollars over the past decade. And some people don't want any publicity around them, which is why they buy them from us. Others don't mind."
One gets the feeling there is much more Gow would like to say. After all, like any investment asset class, the art market thrives on confidence.
The heady business of art
It was Sunday afternoon. We were running late, dressed in shorts and t-shirts for a bike ride. Disregarding the champagne on arrival, we asked the bar staff to pour orange juices for our three sons, and took seats at the front of the Webb's fine arts auction. I feel as if the staff would have poured us anything we asked for, to avoid a fuss.
Researching our Newsroom Pro series on different investment assets, I had popped into the auction with my family in tow. With volatile kids, I knew it was risky. What I didn't anticipate was that it wouldn't be the kids who acted out....
Surrounded by collectors and investors, fuelled by the adrenalin buzz, my wife and I found ourselves raising our bidding paddle. Not on a headlining Bill Hammond or Michael Parekōwhai or Ralph Hotere work, but on a rather lesser-known painter named Ben Clarke, whose untitled canvas we took a liking to.
It's a heady world, this business of art. I've just been reading the memoir of Simon de Pury, the celebrated American auctioneer who would fly around the world selling multimillion dollar Jeff Koons and Damien Hirst works at glamorous parties hosted by Leonard DiCaprio, Sarah Jessica Parker, wealthy oil barons or European counts.
"What really turned me on was never the history, and never the money, but rather the absolute pleasure of seeing and being around great art," he writes.
"Not that I am anti-money. No collector I have ever met is proud that the art he has bought has gone down in value. There is no reverse chic in falling prices."
"The painting came up in London and we moved it to a Switzerland freeport and sold it there, to a expat Kiwi client. He was keen to get involved in that deal." – John Gow, on freeport storage
De Pury buys two or three pieces a month and stores them in a Swiss freeport, in the hope of one day having his own European lakeside villa in which to show them off. "I buy with love, and I hope and pray everything I buy will go up."
Over the past few months, we've investigated the risks and rewards of investing in fine wines, classic cars, NFTs (non-fungible crypto-tokens) – and even boring old stocks.
But it was only at the art auction that heart triumphed over head and I walked out with a new investment.
When head triumphs over heart
Some collectors are better able to treat it purely as a business transaction than I am. Some don't even need to see their artworks.
Increasingly, art investors are keeping valuable works cased up in "freeport" warehouses in the USA, Geneva, Luxembourg and, closer to home, in Singapore. It allows them to ship the art around the world without it crossing international borders and incurring import tariffs.
And in many ways this epitomises the divide between those who buy art purely as an investment, and those who are willing to put their aesthetic pleasure in viewing the art ahead of maximising their returns.
"And then sometimes, people just end up collecting too much. They get a bit obsessed. And then you've got to store it somewhere – and the better place to put it is in a freeport situation, because they have proper storage and if you do need to sell it, it becomes tax-effective." – Adam Ballin, art collector
"You asked about the freeports," Adam Ballin says. "The concept of locking art away into a vault and waiting for it to appreciate then trade it, it just becomes a commodity like gold then, that you can move and trade. It's no longer about it being a thing of beauty."
He has friends who treat art as an investment commodity, buying Basquiats and Picassos and other important pieces. "They're just saying, in a balanced investment portfolio I should have 10 percent of my assets boxed in as alternative asset classes, and 2 percent of that should be in art. These guys are billionaires, they're going to have a pretty serious collection.
"It's no longer about the awe it inspires. You're purely doing it for financial reasons, and that's not something I've embraced.
And sometimes, he says, people just end up collecting too much. "They get a bit obsessed. And then you've got to store it somewhere – and the better place to put it is in a freeport situation, because they have proper storage and if you do need to sell it, it becomes tax-effective."
Dealers like Gow say it would be useful to them to have a freeport in New Zealand, for practical purposes in shipping art internationally, but there might be limited demand from collectors.
Art acquired and imported into New Zealand can incur 15 percent GST, but there are no tariffs, so it's not too expensive to bring it here. The biggest cost is in the shipping. (Ballin says a big work can cost $3000 to $5000 to ship, plus adding to his hefty insurance premiums).
"We've sold the odd Picasso in our time, and using freeports is pretty standard practice in that market." – John Gow, dealer
Gow's colleague, gallery director Anna Jackson, says all art is liable for GST if it comes into New Zealand but it would be prohibitive for galleries to show high value international art if they had to pay the GST all upfront
"If we bring in a work that is high value we can apply for a suspension of payment for a set period for exhibition, usually six to 12 months," she says. "At the end of the period, you either pay the full GST or you have to export it. That said, it’s getting harder for commercial galleries to do this as customs are increasingly treating art like any other imported goods."
Gow says he sometimes ships works into overseas freeports so potential buyers can view the paintings without incurring tariffs. "We've sold the odd Picasso in our time, and using freeports is pretty standard practice in that market," he says.
He also used the Geneva freeport to show a painting by New Zealand's William Strutt, a 19th century goldminer-turned-painter, to a potential buyer in Switzerland. "The painting came up in London and we moved it to a Switzerland freeport and sold it there, to a expat Kiwi client. He was keen to get involved in that deal."
Strutt, alongside the likes of CF Goldie and Gottfried Lindauer, is among a small number of 19th Century New Zealand painters who can command six-figure sums. His View of Mt Egmont, Taranaki, New Zealand, showing Māori driving off settlers' cattle, was purchased by Te Papa in 2015 for $1.5 million, and was the only significant oil painting from the 1850s or 1860s held by the national museum.
"It would be a fantastic thing if someone opened up a freeport here," Gow says. "It would open up the New Zealand market to the international world quite nicely."
