• Home
• /
• Local business

Dubai First Adopts New Strategy by Investing in Modern Art

“We wanted to do something different, something unique — something that was first at the time,” he says.

Though his company’s core business is credit cards, it is venturing into other business lines as well.

“We launched the Dubai First MasterCard with up to 4 per cent cash back, the highest in the region; the Business Credit Card for small and medium enterprises; Corporate Card for large corporations; and the award-winning Royale MasterCard for ultra-high net worth individuals. We currently hold around 5 per cent of the total market for credit cards. This has largely been driven by our consumer card portfolio, followed by corporate cards.”

Dubai First has been in the news for its ‘art as investment’ strategy for its Royale card holders. Here are excerpts from an interview with Ansari in which he tells Khaleej Times just how hot the market is for art in the Middle East.

Dubai First will now offer its high net worth clientele, the Royale card members, an opportunity to invest in art. Why did this come about – and why now, when everyone is tightening their purse-strings?

A: Art is something unique; it’s not something you can just invest in. You have to know how to look at things; how to understand it; how to feel it; and how to enjoy it. The role that our Royale team plays is to assist our clientele in this process and diversify their portfolio by investing in art.

Investment in art is only recently gathering pace in the UAE. While many visitors come to events and exhibitions such as those organised by Haughton International in Dubai, buying a piece of art has to be a well thought-out decision in view of several factors that include sentiment and price. Investor confidence has eroded in traditional sectors like stocks and property, whereas gold is the traditional safe haven.

We are living in times where returns on traditional investments are not as high as they used to be a few months ago, and so discerning investors are turning to avenues that are less explored, like art.

Investing in art is a new phenomenon in the Middle East and one of the biggest growth markets at the moment is modern art.

How big is the art market in Dubai? What are its growth prospects?

A: Investment in good art and antiques is already an established phenomenon in Europe and North America, and more recently, it is gathering pace in the Middle East, Asia and Russia. Art – be it Arab, Western or Indian – is a rapidly expanding market in Dubai too. Over the past few years, we have seen the emirate play host to a number of international art exhibitions and events organised by world renowned auction houses. We have witnessed a lot of interest that has translated into substantial sums being transacted.

Christies held its first auction [here] in 2006, and the sale, which offered 120 works of art, including many from the Middle East, saw a total of $8.5 million change hands. In 2007, they sold 340 works at a total of $24.6 million. Similarly, Farhad Moshiri, an up-and-coming artist from Tehran, broke the Iranian record when his map of the world made from crystals fetched $601,000 — ten times the estimate. So, as you see, there is big money in the art market, and the future is quite bright for this sector.

There is every indication to show that Dubai has become a hub for global art in the Middle East.

Give us your take on ‘art as investment’. Why would you recommend it to someone? And how is Dubai different from other markets?

A: Art is in an asset class of its own. When you go in for fine art, you are combining your passion for a beauty with your desire for investment. While trends show that return on investment in art is significant, it can hardly be compared to returns brought in by a commodity like gold, which is a long-established safe haven.

Even so, investment in art is for everyone that finds pleasure in owning a beautiful piece of work. One does not have to look at works that cost millions of dirhams – there are plenty of tasteful works done by upcoming artists that can be had for a few hundred. There is something good to suit every 
budget here.

As for Dubai, it is a city teeming with people of all nationalities. There is a rich tapestry of cultures at work here. The city is ideally placed in a geographical way too – it serves as a meeting point between the East and the West on many fronts.

Due to all these factors and more, it can be said that Dubai is a city in 
love with art.

It’s a branding of a high net worth individual: what would be the brand equity of a Royale card holder?

A:Our target audience for Royale is the sophisticated and wealthy entrepreneur; the successful and astute businessman; or a captain of industry that realises the investment value of art. … The global art service, which is managed by the Royale relationship team, will provide advisory services to our sophisti-
cated clientele.

We are indirectly involved in providing this advisory service by linking our clients with experts from around the world such art buying consultants, brokers, dealers, etc who can provide guidance, event information and travel experiences in the art capitals of the world.

sushmita@khaleejtimes.com