All that you want to know about researching, preserving, buying and selling art. By Udit Chaudhuri.

The tireless Chitkoo Lall (name not changed) hawked public issues in the early 90s, quickly changing to DTP services, LIC, World Bank, PCs, Amway, Tupperware, Herbals... his hapless quarry being the docile well-heeled gentry living around Linking Road in suburban Mumbai. Bag in hand, he strides the lanes, sharp gaze missing nothing. Prey between his claws, he pumps the skull with hundred bullet-like syllables a second until total surrender or violent retaliation. Not surprising, he cornered me last month with his latest business model. ''no-bat''r-b''nase-than-art-paintings-I-tell-you,'' he gushed as we converged on 12^th Road, just outside Pradarshak Art Gallery which had juct begun its work on the annual Vidyarthi Vishesh, a show by chosen graduating artists.

Chitkoo?s idea was simple: to buy masterpieces of ''Hussain Sa''b, Akbarji, Tyebji, Gamini Roy, etc.'' with your money and mine, with a tiny entry fee thrown in. Each of us ''members'' would then get to keep the paintings, by rotation. Meanwhile he would scour the US and EU for the best prices and we would be zillionaires in just a matter of months. He would take a tinier fraction as exit fee if we wanted to book profits and repeat this glorious cycle. In Phase Two, Chitkoo planned to extend his buying region to all Asia and Africa, what with the West market in his pocket. He went on to explain the details, like cutting risks by making the artists advance the works on part credit to pick the works.

''you know all artist-shartists, yaar. Just come with me. How much profit-share you want'' he shot back.

Ever the bad businessman, I aimed a kick and expletives when I should have hugged him. To me this seems a flawed model to say the least, even if there are a number of art clubs, art mutual funds, on-line and offline art banks, an artist pension scheme and what-have-you, all very close to this one.

Firstly, raw speculation in art is blind man''s buff. There is no hard valuation, neither a market exchange nor regulator, as in shares or bulk commodities. The artist invariably begins his career selling on a cost-plus basis until informed collectors and critics assign significance to this artist''s contribution to a style, school or genre and thus the week commands a premium. Demand-supply factors nominally correct this price. To cite a recent report, Bonham''s in England raised big money at an auction of F.N.Souza''s drawings. But that auction was exclusively of drawings during his London tenure long ago, which are in special demand would fetch you the same premium overnight. Likewise, if a chunk of our grand old masters'' lifetime work fetched the much-hyped Crore - which a fresh MBA from a good B-School is offered yearly - the painting in question was most probably composed three decades ago, part of a very limited series and sold at four-digit rupees then. While some collectors in the chain possibly paid a fortune and recovered it from the auction house, the painter continues a respectable upper-middle-class existence but of late, hounded by offers of every kind of hot deal, if not taxmen funny ideas! Sure, there would be a rub-off on other works in that series by this artist, also on his other works, but the extent is certainly not predictable. So, if there is a 3 or 4 digit long-term profit in art as investment, there is this risk too.

Here we come to another myth - that art collection is restricted to big money plays. I have seen several academics; executives, doctors and other professionals save from their modest salaries to pick up an odd sculpture, painting, pottery and print or charcoal drawing from art students and junior artists from their studio, debut exhibition or an institutional event like the Fine Arts Fair at Baroda. Some have picked selected works of particular artists over the years. As the artist got recognised and individual works gained their significance, these collectors got the choice to sell, either to buy one masterpiece of their dreams or to subsidise some family expenses. Many have not parted with any of the booty, satisfied in their gaining value. Their selection is based on readings or exposure and an eye for art that a well-rounded education is supposed to get you, like the ear for music. Their observation of finesse, conformance to a style and school are akin to the way you and I look at stamps and coins learning more about them as we go long, to be able to tell the wheat from the chaff, appreciate the gems and but them. How else would you tell if a given First Day Cover is worth Rs.500 or 12,000 and why?

RESEARCH

An organised collector does some prior research before embarking on a purchase, just as you would look at some equity research before taking that leap into buying shares or equity funds. You gather data to assure yourself of the right pick consult a genuine expert or two and trust no one. Not even me! The best sources of information about contemporary Indian art and artists are the publications and libraries of the national Lalit Kala Akademi, National Gallery of Modern Art, National Museum, and several art colleges as well as museum all over Indian. These bodies collect works, while the LKA and NGMA also organise several State and National level exhibitions. The LKA also holds an international three-yearly Indian Triennale. They also host travelling shows from overseas. [The full list of institutions, schools and events is beyond the scope of this article, as is even an outline of the various institutes, prevalent styles and schools of art in India.] Of particular interest are the artists'' directory and paperbacks on a number of artists, giving a brief biography, critique and photographs of selected works published by the Lalit Kala Akademi. Independence publishers like Marg Publications have published volumes of deep and extensive studies with excellent visuals too. Among authors, one can cite names like Dr. Ananda K. Coomaraswamy and C. Sivarammurthi among historians, Jaya Appaswamy, Nissim Ezekiel and Sudhir Khastgir among the seniors, Dnyaneshwar Nadkarni, Prof. Ghulam Sheikh and Dr. Ratan Parimoo, to name a few eminent critics on the contemporary art scene. Newspapers once used to be a good source of guidance to the art prospector and aficionado. Periodic art columns gave good insights to the local art scene and a number of eminent critics fed these columns. Scholarly editors in the old genre were known to be well-read and often walked into a one-man-show to offer very pertinent advice or a word of encouragement to a deserving artist. Sadly, with editors increasingly losing touch, not having a transparent system of selecting writers to fill specialised columns and a dearth of articulate art history and art criticism post-graduates, a lot of art columns got mired in controversy and closed down their art sections entirely from the late 80s on, ironically the same period that Indian Art collection began to acquire a glamorous flavours. Some artists are seen in Page 3 but not for their talent. And it is rumoured that a trainer-journalist walked into the NGMA in Mumbai for an appointment with Picasso! With the recent hype, art programmes are making a comeback on TV and one hope that it will build a good cadre of critics and presenters, given its visual vantage.

VARIETY

India is as rich in artists both promising and ''arrived'', as it is rich in multiple art forms. This means a whole choice of what to collect and something for every pocker. Your buy need not always be some heavily researched art purchase to enrich a corporate treasury. It can begin with a simple piece to adorn your room. The choice can run from, say, stone & wood carvings, bronze and other non-ferrous castings, terracotta panels, fired clay statuettes, sheet-metal forms, fibreglass and resin cast forms in sculpture, to earthenware and stoneware pottery in ceramic art, to various charcoal, pastel crayon, enamel, acrylic paint or water-colour creations on paper or canvas, pr ''mixed media'' in paintings, to serigraphs or silk-screen prints, lithography wood and lino cut, burnished or etched zinc, aqua-tint and meso-tint or rocker-textured copper plate prints, to graphics combining the processes of photography with the creativity of painting, sometimes blending the materials of both. Each of these forms is linked to a theme, style and school, thus linked to the art history of that region in India. Here, apart from the library and faculty of your local art college and museum, a liaison with a local artists group, art gallery or art society can also provide valuable learning. In addition, many towns have at least one well-known collection going back to the local Maharaja, an old business family or industrialist who would commission works to adorn his residence or palace. A few of these are open to you for a fee and give a good indication of the local school or art history.

In the ethnic space, every region in our country has its forte in one traditional art form if not a tribal art form or another. Some of these forms merge into crafts and so deployed to make several objects of your daily use, like fabric, garments, upholstery, tapestry, papier-mâché toys, lacquer-ware, statuettes, footwear, purses and wallets, wall hangings, leather-jackets etc. that are assisted by bodies like the Khadi & Village Industries Commission and All India Handicrafts Board. Notably, two organisations (CCIC) Crafts & Cottage Industries Corporations and (HHEC) Handloom & Handicrafts Export Corporation with its affiliated State Export Corporations run a chain of State Emporia and popularly known ''Cottage Industries'' outlets located at New Delhi and all important cities. A visit to each of these gives a very good exposure of the kind of work being done and offers you a wide choice in budget and form. However, each ware on display is not strictly ethnic art, but often reflective of a region?s ethnic talent.

STYLE

Scores of works along the theme or along several visualisations evolve a unique style and a discipline. With time and more experience that style points to a way of thinking about the visualised subjects, often a philosophy conforming to a body of artists in an institution, or even across countries. With more maturity, that artist contributes to that style or school and thus gains from his work being correlated to more established artists and creation, and multiple ownership changes may take place. Otherwise, keen collectors use a nibble strategy, picking one kind of work to build a directed or focussed collection. Some collectors further provide for a gulp strategy and tap a pre-panned reserve or windfall earning to pick up a rare bargain or a masterpiece beyond the regular fare. Either way, there should be enough holding capacity. Houses like Christies hold magnificent collections of their own in addition to what they auction.

Corporate and institutional collectors play a major role. First, the art of a region is a document of its culture and civilisation and collecting these is a record of posterity. Besides, not all art is affordable by an individual. We have a centuries-old tradition of rulers followed by visionary business and industrialists, who not only collected and commissioned works by local artists but also encouraged exchanges of artists between countries that they either had strategies relations or trade pacts with. This naturally resulted in enrichment of creativity in both countries. A number of their sites are now museums. Many of our corporate houses regularly acquire and showcase their collections at their headquarters even if access is limited. Sponsoring and hosting art camps by seasoned collectors are also in vogue. Next, just like we need a strong science base to develop a technology base, we cannot become the fashion capital of the world and neither can we develop an Indian design base - much needed to join a globalised industry - without developing a strong Indian art base. E.g. giants like GM have a big studio as engineering departments in their design centres. Microsoft too employs a few hundred graphic artists.

PRESERVING

Once researched, selected and bought, your prized piece (never make the gaffe of calling it an artwork!) is valuable inventory. Collector or investor, you buy for the long haul. The artist will be too glad to provide tips on where to install it, indoors or outdoors, the best setting at your location. Lighting and weather protection are critical. Coating, frame or housing may be needed. For old works, professional art restoration services are commercially available or accessed via local museums, should these be weathered or damaged. Galleries and local institutions can provide good tips here. In case of expensive work, insurance and security issues must be explored. Public installations are also prone to tampering or defacement. In case of space constraints, it may be necessary to warehouse a collection, in which case the work should be protected from damp and pests. Judicious uses of camphor, naphthalene or silica gel help this in airtight spaces. It is important to air the work periodically. Some materials react with sunlight while some need to cure in it. Large collections also need cataloguing as well as inventory accounting like any moveable asset. This could involve tax compliance work too, needing a good accountant and competent art valuator.

SELLING

Parting with your collection is yet another can of worms. Selling strategies can be set to proliferate or consolidate. A number of collectors sell a series or sometimes an assorted lot, in order to buy one valuable work, say of a master. Conversely, collectors often ''unload'' a single prized possession to meet monetary needs, book profit or buy another collection. Often, a collector sells a cherished piece to an institution on finding it unsafe or impracticable to keep it. If a work is held for long, it is wise to consult a competent agency to ascertain the saleable value and other facts such as its significance. Few collectors display a collection in exhibitions, partly to allow other art-lovers to see and partly to ascertain its worth by evaluating feedback from various experts. A sale may or may not result during that show.

I hope I have provided enough tools to build your own learning curve in researching, buying, collecting and selling art - all in your own way, not necessarily because it is hot property. Join the club!

Art is now viewed as an asset category. Mohnish MAthur gives the low-down on investing in art funds.

Beginning with the days when most painters had to borrow money to even buy paints, till M.F.Husian''s famous, "Even I can''t afford my own paintings'''' statement, Indian art is in step with India''s economic progress. Enter art funds!

The question that most investors and fund managers ask is whether art funds would behave like the bellweather Sensex/Nifty with their famed volatility. Art analysts - though a mere handful, unlike analysts of other asset classes like equity, commodities - are extremely gung-ho about the prospects and base their opinion on the successful India story. Not only are Indian investors more affluent, global investors also have a huge appetite. Blending art and money, these funds for contemporary Indian art aim to trade the way mutual or hedge funds do - buy low and sell high, while collecting fees in the process as also a percentage of the profits.

Although the going has been slow so far, there has been a paradigm shift in the way people approach art funds. Art is now clearly viewed as an asset category - a mainstream asset class. Among discerning investors, art funds have emreged as a credible, alternative investment avenue. But this clearly is one side of the story. The art fund industry is at a nascent stage in India. We do not have much empirical data to base our investment decisions. That the art market is frothy and will not go up forever is evidenced by the fact that Japan''s market saw a massive shake up and a downturn which lasted more than a decade. Art funds worldwide are viewed as risky. As a major global art investor is fond of saying "Investing in art or art funds isn''t about beauty , truth and passion its about making money. One has no choice but to take a cold, clinical view about the funds invested." We cannot deny that a Husain sold at 486,000 USD last year at Sothebys, compared to a peek of 16,00 USD in 2000. Or that Osian raised over Rs.150 crore for its fund.

Any investor in art funds would agree that trading art pieces isn?t like trading equity or treasury bills and forex where the entry-exit process is much easier and more calibrated simply because art is extremely hard to value and really difficult to buy and sell.

One can never make art a commodity like sugar or soyabeans. Art isn''t easy or tough to buy and sell institutionally and an investor fund manager may never get the opportunity to demonstrate how quick he is on his feet. When one buys art, one is not getting a quantifiable investment. While an individual may value the piece at x, another may be unwilling to pay more than 50% of that value. There is the likelihood of getting saddled with an investment the value of which is notional.

Any hard nosed investor or fund manager would ask himself how works of art stack up as investments vis-a-vis the other asset classes. For one thing, there are no bonuses and dividends coming in. maintenance and storage would also be really important constituents of any investment decision. And then there''s the important question of the shelf-life of the artist. For every Husian or Tyeb Mehta or Atul Dodiya, there are a whole lot of artists who will simply disappear into oblivion a few years from now. There''s also the factor that most art funds will insist on a minimum investment and a lock-in period.

A few more issues surfaced in the course of my discussions with potential investors e.g. how do you evaluate a work that remains unsold? The fund manager, in spite of all his insight and foresight, may just find a few such albatrosses around his neck. Also the difference in quality, even in works by the same artist, makes it impossible for plain vanilla, arithmetical valuations. On many occasions even serious art collectors who collect a particular artist aren''t interested in all his or her work. According to insiders (read, those who''ve made a career of trading in art), most art specialists including art fund managers, do not always have really in-depth information about the art market.

Most funds would use the services of auction houses to carry out valuations since they can feel the pulse of the market in an on-going way. Their estimates would reflect the realisable value of the piece. It''s interesting to note that art objects have been classified as capital assets in the union budget this year. Naturally, what were mere objects of delight and passion have turned into investments attracting the attention of the taxman. Dipali Bhattacharya, the famous painter from Kolkata, seeing the influx of unaccounted money into the art trade, has summed up the development in one word "unhealthy". According to out taxmen, this field is now another avenue for laundering money.

Touching upon portfolio valuations, I looked at the model adopted by a leading art fund

a)     The bank balance

b)     The portfolio value as valued by an auction house.

c)     The value of objects outside the expertise of the auction house. Valuation on current market quote.

d)     Realised sale value yet to be banked.

It is parameter ''C'' that requires attention. There''s scope for big manipulation here, bolstering the argument that when one buys a work of art, there is a great deal of subjectively involved in the value.

So whether art is a good investment depends on changes in the price of art more than the ability of an art fund to attract investor. For the moment, however this sector is rocking. It might, therefore be a good idea to enter it but to do so with caution incidentally; did I mention the biggest downside of an art fund? You, as the investor, will never actually be able to put an art work on your walls.

Art is now overtaking traditional avenues like stocks, property or gold. Farah Siddiqui, an art consultant, tells you how to enter the new field.

After years of relative obscurity, modern art from Asia is now going through and unexpected boom. As the world economy globalizes, art connoisseurs across the world are exploring the possibilities of collecting art from countries like China and India.

According to investment advisors, art enjoys a prominent position as a percentage of and investor?s portfolio in the West. Though collecting art has still not reached that stage in India, the trend is very apparent. The returns in the art market have been extraordinary and have outclassed traditional asset such as stocks, real estate and gold. As in any investment it is advisable to know as much about the subject as possible. One can seek sound advice from an art consultant or a senior collector to know more about artist?s visions, the market and its dynamics.

The first step is to be acquainted with the artist?s body of work and his/her best period. Apart from regular research through books magazines and the Internet, visit as many art exhibitions a possible to understand the nuances of art appreciation. Awareness and media attention has contributed to developing and building buyer understanding. Auction houses publish the prices of art works, which means there is a greater transparency and information available. Unfortunately unlike the west, India is yet to have museums of contemporary India art, private and public, where one can browse and learn more from the curators.

Buying works of well-known artists is a smart move for returns in the short term. Blue-chip artists include Tyeb Mehta, M.F.Husian, S.H.RAza, F.N.Souza, V.S.Gaitonde, Ram Kumar. There are several mid-career artists who have immense potential. However if you spot talent early, your returns can grow manifold over a period of time, if you are prepared for the gestation period (3 to 6 years). Generation next artists which include the famous ?Bombay Boys? such as Anant Joshi, Bose Krishnamachari, T.V., Santhosh, Baiju Parthan, V.N., Jyothi Basu and Riyaz Komu have accomplished phenomenal growth since 2005, Contemporary artists who are sought after by international buyers and galleries worldwide include avant garde artists like Subodh Gupta, Shilpa Gupta and Jitish Kallat.

With art, rarity, quality and condition equal value. One-off original are, therefore, more valuable than multiples, prints, copies or reproductions, Paintings, drawings and collages are usually on-offs, but sculptures often come in editions of nine. Prints like etching, silkscreen, lithographs are produced in limited editions: the smaller the edition, the higher the price. The print must be signed and numbered to hold value. The same is true of photographs.

For investors, probably the most essential element is authentication of the work/the provenance of the piece they are investing in. Over the years, works often pass through multiple owners before coming to the secondary market owners before coming to the secondary market. Considering the number of fakes floating around in the market, one needs to be careful about the source. The artist?s signature is normally on the front or the back (or both) of the painting but it is not uncommon for artists to leave some pieces unsigned. Therefore it is best to buy from a credible source. Art works documented and published anywhere including exhibition catalogues and newspaper articles, support the authenticity of the work. An authentication certificate (most common document accepted) from an established gallery or dealer is essential for re-sale purpose. Beware of suitcase dealers trying to offer you a bargain. Galleries and reputed dealers are likely to maintain stable prices prevailing across the country. Art auctions are a great way to track prices of art works, but this does not necessarily indicate a standard price for the artist since each piece is different in quality apart its period.

When you want to sell art, visit a art consultant or an advisor who will be able to evaluate the work and guide you for either a private sale or consigning the art work for an auction.

It you are apprehensive about investing yourself, one can buy shares in an art fund, a consortium that buys and sells art for profit by taking the advantage of consolidating buying power. The downside is that you will not get art to put on your walls and the lock in period is between 1-4 years, but the upside is that art funds are often backed by experience to deliver returns in a professional manner and allows investors to participate in the Indian art market without the risks.

Art cannot be purely for investment for the simple reason that it is not as liquid as your regular stocks. You cannot buy and sell art as frequently as you can a stock. Though art is an appreciating asset, it is less liquid when compared to other asset classes.

The demand for Asian art has been up the price of work by many contemporary Chinese and Indian Artists. Art is no longer considered only of pleasure for aesthete, but it has emerged as an exciting alternative investment opportunity.

Evaluating Art

Price of Indian contemporary art have clocked phenomenal growth over the last five years. In order to understand the dynamics of the market, collectors must update themselves and be informed of significant changes in the value of particular pieces of their art portfolio. Valuators can advice how best to expand and enhance the collection by guiding the collector in estimating the financial risk and providing a written educated opinion of value of their collection.

Valuation of art is of utmost priority while buying and selling art works. The net asset value of the piece of art is based on access of various components such as prevailing market prices, historical data, latest auction results and trend analysis. Besides the square inch rate other factors to be considered are condition, rarity, quality, period, provenance and documentation.

Art evaluators provide independent professional services to private and institutional art collectors. Art insurance is absolutely essential and hence its valuation. A qualified appraiser should have formal education in the field of expertise-appraisal theory, principles, methodology and ethics.

Evaluations are also paramount in case of equitable distribution of wealth among heirs and for tax purpose. In recent times, every major insurance company employs art specialists to evaluate art works. International auction houses like Christies and Sotheby?s who have no vested interest in art works, are impartial evaluators.

Only buy what you like. Don?t put your money on a work you don?t like no matter how big the name.

• Who you talk to matters. Get to know good collectors and build a relationship of trust with art galleries, so that you can call upon them fro good advice. If you have friends who purchase art get opinion on who they like.

• Do a lot of background work. Check on the internet, or source auction catalogues to get a realistic idea of the worth of a particular work or artist. The net is also an unbiased. If unwieldy, source of information.

• Every gallery has a large amount of inventory of artworks left over from previous exhibitions. The inventory contains a wider selection of works and, if the prices of certain works have not been updated offers better prices as well. So, always ask to see a gallerist?s stock.

• Whether photographs paintings or prints, it?s important to see the quality of the work, the kind of surface it has been printed on, and take a look at the previous work of the artist to see his history and the thought behind each work.

• Serious collectors of upcoming artists should pay regular visits to art schools to check out student work. All art schools conduct exhibitions of final year students etc. These are great opportunities to get in before the market gets them.

• Young artist will also do especially commissioned works for buyers.

• Trawl public galleries and spaces that show low-budget works to locate interesting works by lesser-know artists.

• Look at the price history of a particular artist to get an idea of market value appreciation.

• You have a right to ask for options, so talk to the galleries and ask to see choices within your price range, or of a particular artist.

• Most artists are easily approachable. And though most artists only sell through galleries, use exhibitions and openings as an opportunity to meet directly with the artists and talk to them about their work or where to look for upcoming works.