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Not a lot of people know this, but actor Michael Caine has described a former Soho nightclub manager and bon viveur as potentially the “next Andy Warhol.” With his art work also appreciated in some rarefied circles including by the likes of Al Pacino, Charlie Sheen and Lionel Messi amongst others, British artist Lincoln Townley might seem to lack the pedigree and background to take on the art world head on and democratise art ownership.

But that is his ultimate aim, and Lincoln has struck a significant relationship in The City of London that may drive this aim to success sooner than one may think.

Later this May, London-born Townley, who cuts a diminutive figure when I met him for lunch in London near The Guildhall Art Gallery that houses John Singleton Copley’s huge painting The Defeat of the Floating Batteries at Gibraltar, will exhibit the Banker collection of his works at La Biennale in Venice. The event is a big deal – and not just for Townley.

Love or loathe his work, which one could say has an influence from Irish-born figurative painter Francis Bacon, known for his abstract and emotionally charged raw imagery as well as heavy experimentation, Townley is an interesting study in himself.

By the way he talks you wouldn’t think – on the surface at least – that some of his works can sell for around £1 million (c.$1.3 million/€1.16 million) a pop and the value of his works have risen by a whopping 4,400% over the last few years. You could say his trajectory has gone through the roof.

Several at that price level are now going on show at this year’s La Biennale in Venice, the 58th such show that runs from May 11 to November 2019, with the international art exhibition titled “May You Live In Interesting Times.”

Art Biennale, which has been held in odd-numbered years since 1895, is so named to distinguish it from the organisation and other exhibitions the Biennale Foundation organizes (e.g. Biennale Musica, the Venice Film Festivala, Venice Biennale of Architecture and theatre).

Rewind seven years to 2012 and Townley, a self-taught artist who has always painted even before his days in London’s Soho, sold a picture in the Soho Hotel Bar in London for a modest £2,000 (c.$2,600/€3,200). His works are all oil on canvass or linen, embellished occasionally with acrylic paint.

Fast forward to today and one wouldn’t get much change out of £110,000 (c.$143,000/€127,600), the starting price for one of his works, which he describes as “pretty dark.” It’s not hard to see why when looking at his archive on the Londoner’s website.

“I’m interested in what we go through to succeed. So, what people are willing to push themselves through,” he told me. As to art influences, Townley revealed that he is “huge fan” of Francis Bacon, but adds this has “more to do with [Bacon’s] his outrageous behaviour.”

And, you can certainly see why when you come face to face with them. Still, it hasn’t stopped some collectors coming – including businessman David Sullivan, joint chairman and largest shareholder of Premier League football team West Ham United FC, who has a room allocated to the works of faces painted the Cheshire-based artist.

Other collectors in the mix might seem bewildering. For example, Max Kennedy of the Kennedy family (ninth child of of Robert F. Kennedy and Ethel Skakel Kennedy) commissioned Townley to paint a picture of Bobby Kennedy. Add to that a portrait of Stephen A. Schwarzman, chairman, CEO and co-founder of the Blackstone Group was sought by the CEO, who according to Forbes has a net wealth of $13.5 billion (as of April 2019).

It’s all a far cry for Tottenham-born Townley, who before he embarked on a career in art spent years successfully working at clubs owned by Peter Stringfellow in Soho’s clubland.

Those days are a distant memory and post his days in Soho, he gave up alcohol and the drugs that were part and parcel of clubland. He is now taking his experiences of the people he met during those days and, as he told me “exorcising those demons” on the canvas with his portraits.

And certainly his oil paintings would light up any room – from grotesque bankers that look like they’ve taken a beating on the markets to portraits of actors like Sir Kenneth Branagh, Monty Python’s John Cleese or Claire Foy, who played the ill-fated queen Anne Boleyn in the miniseries Wolf Hall in 2015. But you’d need deep pockets to bag one of Townley’s works.

Art As An Investment

In an era of negative interest rates, art is more than ever becoming a serious alternative to traditional investments. Even simple investment strategies have demonstrated that art as an asset class can generate competitive returns over the medium and long term.

Indeed, the Artprice100 for example, that is inspired by benchmark stock indexes, traces the value of a standard portfolio composed of the top 100 artists on the secondary market (adjusted once a year on January 1 to reflect the 100 best performing artists over the last five years and other criteria).

In the case of Artprice’s Art Market price index versus the S&P 500, the performance of the former has well exceeded the U.S. broad based equity index.

Large institutional investors and High-Net Worth Individuals (HNWI) have in recent year been increasing their allocations to alternative investments – including art and wine – as part of multi-asset portfolios Benefits of doing so include diversification, a hedge against market volatility and enhanced returns.

The Alternative Investment Report (2019) commissioned by Cult Wines, noted: “Alternative investments tend to fulfil a different role in a diversified portfolio than traditional asset classes such as fixed income, gold or stocks, and their returns were historically found to be less correlated to financial markets performance.”

Looking at some performance numbers, the 5-year (2012-2017) CAGR of European Old Masters and Global Impressionist Art, which are considered as safe haven assets within art investing, was recorded at 1.72% and -0.78% respectively, while the relatively riskier Contemporary Art returned the higher CAGR of 4.09%.

By comparison, over the same period, fine wine, as represented by Liv-ex 1000 index, returned 5.8%. And, within Liv-ex 1000 index, Burgundy 150 delivered 8.61% in returns, while Bordeaux 500 returned 4.95%.

“This suggests that the inclusion of art and fine wine in an overall portfolio provides additional return potential. But the investment performance may vary depending on certain category/region selection within both art and fine wine,” the reported noted.

Art Biennale – Venice

Speaking in London at a venue near the Bank of England prior to going out to this year’s Biennale, Townley said: “Out of many pieces I’m displaying there, I have a couple of works going for sale at £1 million or higher.” Clearly, at that level it’s not going to appeal to your average art punter and would need a grand setting to be shown in.

Townley has managed to secure a spot in the Palazzo Bembo on the Grand Canal, close by the Rialto Bridge and next to the Palazzo Dolfin Manin. But he acknowledged it “wasn’t easy to tick all the boxes” with Biennale’s organizing officials in order even to get an opportunity to display his works there this year.

He might also be said to have a bigger vision – to disrupt the art market itself. And, Townley wants to outline the idea in Venice, the capital of northern Italy’s Veneto region, which is built on more than one hundred small islands in a lagoon in the Adriatic Sea. This is the goal of launching an art platform to promote both established and upcoming artists, whose work can be sold 24/7 around the world.

To that end, the North Londoner spoke about this vision to an audience in Venice this Sunday (May 12) in an effort to gauge interest.

“Looking at everyone who comes into Biennale – every artist that enters – will be represented by a gallery. And, in most cases it will be a solo or exclusive agreement that the artist has with their gallery, who can take a high commission on any sale by the artist in question,” Townley said that this can typically be around 60% or more”

For Townley, he believes that the static gallery has had its day – or might be fairly close to it. “We are looking at a market [galleries] that are static and boring…it’s stale. And, it’s not designed for the artist,” posited Townley. But he admits it may take a “sledgehammer” to change the status quo.

“You can’t tap someone on the shoulder with this [concept], you need to be a hustling artist working amongst a group of people (i.e. other artists) and pushing and marching forward with this,” he ventured.

He asserted too that: “There is also far too much red tape in relation to art agents, who ring fence these creative sources and say “If you sell your work outside the gallery” [to a buyer], the gallery in question can take 50% or more[of the sale price]. This is fact.”

He added: “One of the points I hope to communicate at Biennale whilst I am there is that I’m bringing something to the market, which is going to open up the art market and artists’ works…to be sold every second of each day around the world.”

Art Exchange & Platform

John Barker, non-executive chairman of brokerage ITI Capital, brand owner of The Esports Gaming League, and an art investor who is also a collector works by Townley, commented: “A number of platforms have been delivered and it would seem to be on a “I will build and they will come basis.” I have seen this in a number of markets and it proves difficult to build distribution and therefore success.”

Barker, a City veteran of the financial markets who previously founded block trading platform Liquidnet in Europe and lead its expansion in Asia, has teamed up with Townley to explore the options around developing an art market platform.

He explained: “It’s still fluid [concept] and, the reality is that there are certain hurdles to overcome. We may have to be regulated for example. That said, we are looking at blockchain technology, and, although we are not initially looking at crypto (tokens) per se, we are certainly exploring frationalization of art ownership.”

Townley explained that his vision of the exchange for the art market in two ways. Firstly, as “embracing grass roots” artists from the likes of Goldsmiths College [known for artists Damien Hirst and Vivienne Westwood] or Central Saint Martins (at UAL), looking at a programme that nurtures and brings them through “once they fulfil their early promise.”

For established artists, it would be more about reducing the cut that galleries take on sold works and being able to represent them online in a global market place.

Decentralized Museum For Digital Art

In terms of other ventures and platforms seeking to offer better opportunities for artists, WUNDER, a decentralized blockchain-based digital art museum, involves partnerships with the most promising young and emerging artists, commercial galleries and seasoned curators from around the world. The works are commissioned from the artists via artfintech.one’s so-called Patron Protocol.

And, later this year WUNDER is preparing for a Security Token Offering (STO) with artfintech.one. In the meantime they are well funded and supported by strong industry leaders. Created by Antwerp-based David Dehaeck and Nathalie Haveman, the Patron Protocol is the core of artfintech.one, the open source end-to-end system on the EOSIO Block.one blockchain.

It is claimed to be the first open source ecosystem, which allows accredited artists to tokenize digital art and to make it available to patrons and investors via WUNDER.ART, dubbed the first decentralized digital art museum. In so doing the venture is creating a market for digital art, supported by “empowered patrons” according to Dehaeck.

The project is being advised FRORIEP Legal AG for Swiss law aspects in what has been described as this “ground-breaking concept” of distribution of digital art by artists and the owning or renting of digital art.

One of the law firm’s partners, Catrina Luchsinger Gaehwiler, in recent months purchased what was claimed to be the first “online issued” art-based asset token in a blockchain governed Patron Protocol of 8 fractional ownership shares. The work is called “The Absence of Presence” by Romanian artist Dragos Alexandrescu, who lives and works in Vaasa, Finland.

For Townley, a BAFTA-resident artist for the last five years and the majority of whose work is sold in London’s Mayfair (Maddox Gallery), Berlin, Los Angeles, New York and Singapore, he may well be moving on to a bigger league.

As City veteran John Barker puts it as regards an art exchange: “Whilst you are not going to have a piece of art listed on say the London Stock Exchange, there is nothing to stop us creating an art exchange or platform, where Lincoln and other artists can list their works as individual works or a collection of pieces. The value of those pieces and the value of particular artists can go up or down. It’s really no different to a traditional stock exchange.” Carpe diem.

Follow Roger, an ex-FT writer who has penned various investment stories, on Twitter @AitkenRL, LinkedIn, Forbes, Google+. He won a State Street Institutional Press award in 2015.

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