Art as an alternative investment

by leslierankowfinearts

Art as an alternative investment has become a dominant topic not only in the investment world but also in the art world with several indices tracking artists of different periods and styles such as the Mei Moses analytic tool.Auction houses are publishing market reviews and outstanding sales results as advertising and promotional vehicles for the collector and consignor. Journalists in the business sections of the Financial Times, the Wall Street Journal and the New York Times, among others, are tracking the auctions as well….and another area of potential investment gain is on the ascent. Win Smathers, Managing Director at the established investment advisory firm, Hunter Associates, has graciously agreed to explore the topic of art as an alternative investment with us. Historically, I have never pitched art to collectors because “it’s gonna be worth more”, but, of course, it is my goal and my responsibility to direct clients to works that, in my estimation, have not only aesthetic appeal but also market value.

Win is my financial advisor – a task I’m sure wears thin at times as I am not a passive investor – and Win has always been diligent in explaining the thinking behind his recommendations and steered my ship to safer shores. I admire his commitment to his work and his great knowledge of the field. I encourage you to ask him questions that concern you –  his advice is always thoughtful and elucidating.

WIN, THANK YOU FOR SPEAKING WITH US. BEFORE WE ZERO IN ON ART AS AN ALTERNATIVE INVESTMENT, PLEASE TELL US ABOUT HUNTER ASSOCIATES ITSELF. I KNOW THAT DAVID HUNTER FOUNDED THE FIRM BUT WOULD LOVE TO KNOW ITS HISTORY.

Dave Hunter founded the firm in 1992. We started with just a handful of staff and a few hundred clients who desperately wanted to work with a fee-based investment adviser rather than in a traditional commission-based brokerage model. Over the years, we’ve grown handsomely, now employing 30 advisers and financial professionals and managing $1.7 billion for individuals and families.

WHAT IS THE APPROACH OF THE FIRM AND ITS INVESTMENT POINT OF VIEW AND WHY?

We manage money primarily for individuals and families albeit we do work with a few dozen small endowments and corporate pension plans We apply a collaborative team approach to each client relationship to help best understand their unique needs. We start each relationship by creating an investment policy statement to serve as our guideline. Our investment philosophy is to buy high quality companies at reasonable valuations in businesses that are the beneficiaries of long-term trends. We do leave room in our portfolios for small companies that we know well and contrarian opportunities in companies that have lost their way but have a new catalyst or a redeeming quality that we believe is not yet recognized by the market. In the fixed income section of the portfolio, we believe in keeping our bond holdings safe and reasonably short in maturity. Lastly, we are committed to tax efficiency  in our portfolios and keeping our fees reasonable and competitive.

THANK YOU, WIN.  NEXT TIME, I THINK IT WOULD BE VERY VALUABLE TO EXPLORE THE PROFILE OF YOUR CLIENTS AND HOW ART AS AN ALTERNATIVE ASSET FITS INTO AN INDIVIDUAL’S PORTFOLIO, SOME OR ALL OF THE TIME. I REALLY APPRECIATE YOUR INSIGHT INTO THIS INVESTMENT AREA.