Investing in art can stir up a variety of emotions, but for Jeremy Larner, the visceral feeling he gets from looking at art is unique. “When you see a piece of art, it immediately resonates with you or it doesn’t,” he says. But when you dig deeper and learn about why a work was created, what the artist is referencing, and how he made it- that's what separates the good from the great”
Larner is president of New York-based. JKL Worldwide, one of America's top art dealers JKL helps clients build art portfolios, often with an eye toward investment, which has become a growing global trend.
According to Deloitte's "Art & Finance Report 2016", 72% of art collectors surveyed say they buy art for passion, but from an investment perspective. Among wealth managers, 73% say their clients want to include art and other collectible assets in portfolios, up from 58% two years ago. Seventy-eight percent of wealth managers also think it's a good idea, up from just over half (55%) in 2014. It's the first time in five years of doing the survey that Deloitte says it has seen "an alignment of the wealth management industry with collectors and art professionals”.
The potential returns from buying and selling art certainly help. Larner says that in the past five years he's bought 159 pieces of art, with an average return of 196% and an 81% annual return on investment. "I had a positive return on 93% of purchases, and the negative returns accounted for less than 15% of total profits," he says. "Now, that's something I am proud of”.
His clients are mostly high and ultra-high-net worth individuals from a range of backgrounds, including athletes, musicians, lawyers, Wall Street executives and entrepreneurs from Silicon Valley and around the world.
"It's the ultimate elite sport," says Larner, who sees new money pouring into the industry each year. "Like any investment, it's about supply and demand. There are more people that want great work than great work actually exists”.
Larner's career began in the entertainment business, where he was best known for managing professional skateboarder and MTV star Rob Dyrdek's business empire, including consumer products, television shows and a charitable foundation.
As soon as he could afford it, Larner started to buy and collect paintings from artists who inspired him. "At first I simply bought what I loved, but once I started to learn about the art market, my purchasing decisions became more investment-driven," he says.
Now nearly a decade into the art-dealing business with JKL, Larner has great conviction that what he does trumps traditional investments such as stocks and real estate, from both a profit and a personal point of view.
"In the financial markets, you simply log in to your account and see your balance. That's boring," he says. "In real estate, you have tenants, repairs and property taxes. That's stressful and time-consuming, and the returns aren't nearly as attractive. What's great about art is you get to live with beautiful objects, and the returns are huge-as long as you know what you're doing That's what I'm here for”.