Frank Kilbourn

The first in the Perspectives features an interview with businessman and collector Frank Kilbourn who is the newly installed chairman of Strauss & Co.
Hi Frank, could you tell us a little how you started collecting…maybe what kicked off your passion?

 

I bought my first artwork in January 1988 with first salary, so now its 28 years later. Lizelle (my wife) and I went to the home of some of our friends in Pretoria who were also article clerks and there was art exhibition being hosted and we got our first piece. At the end of the month I had to go to Standard Bank to get an overdraft to pay the rent! So this infatuation is very well established.

What were some of the highlights at the beginning?

Well when I was at university, I was on the way to a class and I walked past a noisy group who were drinking wine, having a good time, so I thought I’ve got ten minutes before my lecture, let me see what this is all about…So I go to discover Walter Battiss, Baldinelli and Villa who had an exhibition on, and all talking about each others work.

So you could say that I had a visual interest in art at first…I subsequently listened to what artists had to say, which was incredibly exciting to me and then went on to question art’s philosophical dimensions. So with all that in the back of my mind, as soon as I started getting a salary, I started buying art.

So you’ve come a long way from your first overdraft to sit now as the newly installed chairman of Strauss & Co. Could you talk us through some of the ways in which this developed.

 

I’ve always wanted to, if I could, build a potentially significant art collection, very much for our own fun and joy, so when I had the chance and realized some capital I decided to do that.

We’ve been buying at auction for some years now, with the collection at about 1260 works or so. So I’ve got to the point where you’ve almost automatically started buying less, because you have are representative works by the artists you like.. I like to say that I collect from the start of the previous century till tomorrow, so I’ll always be in the market. In the process I got to know Stephan (Welz) and many of the auction houses and galleries really well.

So Stephan approached me and said one day when I retire would you consider taking over? So I said one day , maybe?. And that one day came far sooner than we anticipated.

How important is it for you to collect between the last century and tomorrow

 

Well, the more you know about history, the more you know about the future.

As your collection has started to grow, you said you made informed choices, but did you ever think that you would start to take a look at what the market place was doing and to play in the market place and not be merely a client…?

 

Not originally, but coming from a merchant banking background, (and that’s why  auctions  remind me of the open outcry system we had on the stock exchange) and because I grew up on a farm and there were droughts and rains and storms, I always wanted to be financially prudent, so when I started committing significant parts of my capital to art, I wanted to make sure that I’m going to do it in a way that even if its not going to give me a big return I’m unlikely to loose a lot of money…

It’s more of a sacred space for me than an investment arena.  The Strauss opportunity comes at a time when I’m a businessman, a competitive business man, but I’m also philosophical about where art fits into peoples lives and auction houses fit into the total art scene. I think  the advantage of coming to the art business being 55 years old, is that you’ve been in business 30 odd years  and  in the art market for almost 30 years, which enables  one to have a slightly more philosphical approach about what one is actually doing…

What role do you see auction houses laying in the artworld?

When we come to the secondary market, in which you get some galleries moving secondary work and the auction houses…the latter is a little like the stock exchange of the artworld…it’s a place where you have an open outcry system where the price for certain artworks are determined by the market. It is not a perfect system because you don’t necessarily have a million buyers and a million sellers but as  imperfect markets go it’s about as good as your going to get.

So now as the auction market has begun to define a certain range what we’ve seen in the past couple of years now, very slowly, is that works that we’d normally find in the primary market are gradually finding their way into a secondary market scenario…

Are you talking about works skipping the primary and going straight to the secondary market?

 

No, I’m talking about the maturation phase of new artists whose value is growing and now can be seen performing in the open market…

Well that’s a very interesting question that you ask… in my opinion an auction house should not provide liquidity directly from the artist to the market. I think in almost all instances it’s in the artist’s best long term interests to build up a relationship with a gallery or various galleries through the representative process. To bypass that system in the long term is not the best place for an artist to be. Concomitantly I think it’s also not a very good place for the auction house to be.

If you bought a work and then two months later you want to sell it, my recommendation would always be to go back to the gallery where you bought it. If for some reason this is not the case, say the gallery cannot sell it quickly enough or so and you take it to auction, the market will find a price….but one has to bear in mind  that the gallery is entitled, due to its investment in that artist, to ask a premium…and whether that premium can be unlocked at auction is not necessarily the case. You can apply an estimate but the market will do its own thing, so that’s quite a dangerous strategy…especially for a young artist coming up in auction and for the auction house itself to choose that as a strategy.

That being said we are seeing some young artists coming up at sale, Athi Pata Ruga for instance has been performing particularly well…what do you think that’s attributable to? Is it down to high quality, desirable work or is down to the fact that there’s simply not that much available on the primary market…?

 

Well, if you take choose to take such an example, his last couple of shows have done very well, and he’s got quite a high profile, but I think even he would have been quite delighted to see the results. The fact of the matter is that there are some artists that are coming through the system, building their profiles through art fairs, establishing reputations on different exhibitions, where you come to a place where there is a supply and demand issue, ie the demand is greater than supply and prices keep going up. One must, however, be very careful to say that because one work by an artist sold well at auction that this is the new market price for that artist…let’s sell ten, twenty or thirty or even forty and then lets see where it goes.

Remember, and you have to be very mindful of this when it comes to an auction, that it only takes two people to ramp up the price…if it was a contested bid between ten or twenty people you can put a lot of weight on the price. So, isolated results can be misleading.

So you would caution against buying into a bubble?

 

In any bubble of course, any buyer runs the risk of  committing capital to something where he could to loose a significant percentage of that value over time. I’m not suggesting that it will necessarily  be the case, but rather that you have to wait and see how the pattern and artist develops over time. Once an artist has sold five or six works in consecutive exhibitions, a strong track record would have been established. In such a case, a strong increase in prices placed on the works by gallery will not reflect a bubble, but rather that there are people who are willing to buy the work at a premium. Such an increase in prices can then be sustained and the prices in the secondary market will follow automatically.

Do you find on the secondary market its increasingly international buyers rather than the usual suspects?

 

The usual suspects like me keep on buying, and they’ve been the backbone of the market for a very long time, but I think you’ll find in Cape Town, international buyers who have in home in Cape Town  have been very significant buyers of South African art from the primary, secondary and auction markets for a long time…

How do you position the change happening in who is buying art?

 

The buyers will depend on  how we position ourselves relative to the issue of ‘African art’ versus ‘South African art’, by broadening the scope of the things we put on auction and how we deal with the internationalisation of our audience . As a result of the increasing professionality and success of our  art fairs, through the Zeitz Museum, and other museums and art centres that are being planned here, the audience interested in  buying South African art is going to change. As an auction house we continuously question how we best capitalise on that and best position ourselves for the medium to long term.. We also need to broaden the scope of South Africans  buying art ….. these are some of the challenges  we face and the Strauss and Co team is looking forward to meeting these challenges whilst retaining our position as market leader.

Success (which is evidenced by Strauss and Co’s achievements in the last 7 years) always breeds competition, and competition compels excellence. So, provided that you continuously adapt to market forces while building on the values that made you strong initially, you should be able to remain very competitive, which is what we intend to be.