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J. Tomilson Hill, the Blackstone Group
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Billionaire J. Tomilson Hill has built one of the world’s top collections of fine art, filled with Picassos and de Koonings and Bacon’s that have more than doubled or tripled in value since he bought them.
He has a keen eye for great art that’s also made for incredible investments. He bought one of Andy Warhol’s famous «soup-can» paintings in 1996 for $340,000. It’s now likely worth over $9 million.
Hill shared some of his personal rules for buying art after speaking at CNBC’s
Buy what you love
«The first thing that goes through my mind is ‘does this give me goosebumps?'» he said. «Is it something I will want to look at every day and with the same enthusiasm a year from now, or two years from now. And how will it fare in comparison to other great artists next to it?»
Don’t buy art as an investment
He said that if you buy a piece of art because you think it will rise in price «then you’re going down a difficult path. You just have no idea.»
Buy the same artists
Hill also said he tries to collect at least four or five works by a select group of artists he focuses on, rather than buying «one of everything and just checking the boxes.»
But Hill’s most surprising secret to investing in art comes from his experience in financial markets. Hill is the chairman of
Know your competition
«If you’re an equity manager today, and you own XYZ company, and you’ve done all the research and spoken with the management team, the first question you ask is ‘who else owns this stock?'» Hill explained. «Is it index funds or part of a company’s quant strategy? If you don’t know who owns the stock and if it’s part of a momentum play or index, the stock can go up and then go down just as quickly.»
Hill said buying art should be the same. New databases and research allows buyers to better determine who else owns an artist they want to collect. If the other buyers of the artist are speculators, short-term art traders or flippers, you should avoid them.
«You should ask ‘who else has collected that particular artist? What museums is that artist in? What curators like the art? Who are their dealers and who else is buying?'» he said. «A while ago there were all these people who went long on (Martin) Kippenberger, and then they tried to juice the market They loaded up and then tried to sell. That happens in the art world.»
And even if you can’t afford the multi-million-dollar pieces Hill buys, you can see them for free. Selections from his collection — which features the likes of Christopher Wool, Francis Bacon, Cy Tombly and Willem de Kooning — will be visible to the public when the Hill Art Foundation opens next month in New York.
Hill should know. He serves on the board of the Metropolitan Museum of Art, is chairman emeritus of the Hirshhorn Museum and Sculpture Garden in Washington, D.C. and serves on the investment committee of the Smithsonian Institution.
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One of the world’s top art collectors said the art market is unlikely to cool or crash anytime soon, due in part to soaring demand from new museums in China.
Bubbles and busts are nearly impossible to predict in any market, said J. Tomilson Hill, the vice chairman of
«In 1949, when Mao took over China, there were 25 museums in China,» Hill told CNBC during its
The push is part of China’s efforts to not only become the world’s economic super power, but also to become a cultural force on par with the U.S. and Europe. New museums in China have been willing to pay astronomic prices for trophy works.
Liu Yiqian, a former taxi driver turned billionaire in China, paid $170 million for a Modigliani painting at Christie’s in 2015. The painting was purchased for one of his two museums in Shanghai.
The Chinese government is also requiring many new real estate developments to build museums as a condition to get government approvals. That will create demand for art for years, as China’s building boom continues. Last month,
Hill also said that art remains an attractive asset for the global rich who want a store of value they can take offshore, or use to avoid taxes. The massive amounts of art piling up in duty-free warehouses in Singapore, Hong Kong and Switzerland are a sign that the rich are using art as a way to offshore their wealth, he said.
«If you’re looking to avoid taxes, the art market is a pretty good way to do that,» he said. «And it’s really hard to track.»