An avid Lebanese contemporary art enthusiast, Marwan Kheireddine, chief executive officer at Al Mawarid Bank, recently sat down with Executive to talk about his personal art collection, his take on the booming Middle Eastern arts scene and ‘passion’ investments.
When did you first start collecting art?
I always had an eye for art. My father collects art [and] I started my own collection some 10 years ago by getting interested in [Mustafa] Farroukh [a pioneer in Lebanese contemporary art]. Someone told me that he was the art teacher at my school, at International College [in Beirut], so I started buying some [of his works] here and there. I moved to buying any and everything that I liked. Then I realized that maybe for the sake of having an ice collection, I should concentrate on something and at some point I concentrated on Lebanese artists [with a theme of] war in Lebanon.
Some say Lebanese art does not get enough support from Lebanese collectors, which leaves it undervalued. Do you agree?
I tend to say that in certain cases and at certain international auctions, some Lebanese art was overpriced, and some was sold for a significant premium. It’s not uncommon now to find Lebanese artists, some of which have passed away, others still alive, that are selling, at auctions, small paintings in size for amounts in excess of $100,000 and $200,000… For those prices you can get a painting that is signed by Picasso. But I do agree that some Lebanese painters have not yet achieved their worth. Aref Rayess for example — who’s one of the massive artists that passed away some while ago —[has] huge collections that are incredibly artistic and still not selling at their full value.
Is Middle Eastern contemporary art being overvalued at auctions?
To establish a market, a one-off sale does not really create a price. So it may very well be circumstantial; it may very well be that someone really liked that piece of Saudi art and decided to pay a lot for it. Saudi art is now hot. People are now looking because the image they have of Saudi Arabia is anything but art. It’s oil, it’s business, it’s the economy, etcetera. So art from there is attracting a lot of interest from regional and international art collectors. I’m looking at it but I have not bought anything.I have not seen anything yet that really caught my attention.
What art would you invest in?
This is the million-dollar question because if it’s only for investment, the objective would obviously be to buy something that will increase in value, and identifying the artists that will survive time is not easy. If we go back to the Lebanese artists, I think that really a handful saw their value increase over the past 100 years. You have Farroukh, Omar Onsi, Habib Srour — who has a limited number of paintings for collectors to view, let alone buy — Paul Guiragossian, Shafik Abboud and that’s out of what? Maybe 1,000 artists that have had their paintings circulated in Lebanon over the past 100 years.
Auction houses in the region are believed to be overly speculative, focused on short-term profits. How would someone avoid art ‘bubbles’?
Auction houses are by no means experts, in the sense that they are selling something whereby they are guaranteeing its future value. They estimate the art prior to placing it but many times they’ve estimated prices that they were never able to achieve and at other times pieces sold for multiples of their estimates. They guarantee authenticity, condition and delivery.
At the end of the day, the price hike is happening because the bidders tend to be, in our part of the world, somehow emotional. So we had an [Ayman] Baalbaki [“Let a thousands flowers bloom”] sell for something like $200,000 dollars. That, I think, does a disfavor for Baalbaki, because if he sells at this price today, what are his chances of going much higher? You had two bidders that were hyped on that specific painting — especially with the Arab revolutions taking place — and they overbid. In my mind, from a monetary perspective it is not worth that much.
Is it very dangerous having young MENA artists reach record prices so early in their career?
Overbidding on certain pieces does create anomalies in the market. But I don’t think you can do anything about it… and I’m sure that whoever bought this Baalbaki is so proud of it that it’s probably hanging on the main wall in some mansion somewhere in the Emirates or elsewhere. The price is more a reflection of the feelings of the buyer at the time the piece was bought.
What would guarantee the value of the artwork inspired by the Arab uprisings next year?
Nothing will guarantee the value of art at anytime. A lot of [art] buying, especially for upcoming artists, is based on mood and general trends in the market. There’s always this ambiguity, animosity, in the art world because it relies a lot on emotions. It’s not a rational science.
In that sense, passion investments are not any less volatile than other investments, are they?
No, there are certain art lots or pieces that you cannot go wrong with; a Picasso, Monet, Van Gogh, a [Paul] Guiragossian or a [Shafik] Abboud. When you buy these pieces it is a safe haven, a low risk investment for your money. It’s just like the stock market; you can have a low-risk strategy and invest in safe instruments like treasuries and AAA-rated bonds, or you can be aggressive and go all the way into speculative investments.
Art prices are very volatile and getting it right is not easy. But then you can diversify, buy a bit of everything, and if something hits, it hits big. Art is a safe investment, but illiquid. So if you sell it quickly you will lose value. It is a good place to store your money over time, provided you can identify good art.
What would you advise young collectors?
Buy what you love. I definitely went wrong, many times. I have art that is worth nothing. What I like I have no problem with; I don’t care about its value or even monitor it, because typically what I buy I never sell. I take risks in investments. A few years back, I learned that Hitler —before he became the murderer — had some 700 known paintings. Now I have some 35 of his paintings. None of them is really shocking in terms of its beauty, actually most of them are on the ugly side. But it’s Hitler. I bought them here and there from the United Kingdom [and] Austria, so [my collection] must be one of the biggest single collections held by anyone in the world. I’m thinking that maybe I would sell them at some point as a collection. That could prove to be a very good investment or the lousiest one I’ve ever made.
What do you have your eye on right now?
An Ayman Baalbaki. And a very dear friend of mind promised me that he will make sure that I’m getting one. So I’m waiting on that promise.
