Dipping into the world of contemporary art might not appear the most obvious avenue for diversifying your portfolio of investment assets, but it could prove rewarding in more ways than one.

Aesthetically it wins hands down. A company share certificate is always going to look dull and boring next to, for instance, an Andy Warhol original hanging on your wall.

But are they equal when it comes to holding their worth — or preferably increasing in value?

Clients of Clarien Bank were given an insight into the world of contemporary art as an investment consideration when Courtney Kremer, of Sotheby’s Auction House in New York, gave a presentation on the subject.

Ms Kremer has an extensive background in the world of art and art collections. She is Sotheby’s head of contemporary curated auctions.

In an interview with The Royal Gazette, she explained that owning a piece of art, such as a painting or sculpture, is a way to diversify your investment portfolio and to potentially secure a healthy return on investment.

“There have been young artists who have had their work go from $5,000 up to $400,000 in a few years,” she said, although adding the caveat: “There are price spikes and they can come back down. It can be a bit of a ride.”

Which is all the more reason to seek out an art expert to advise on a potential purchase.

Ms Kramer said it was best to “take time to do your research and speak to a gallarina”.

She also recommends a buy-and-hold strategy, keeping a piece for at least five to 10 years.

While a few art investors buy and then store their purchase away, many put their paintings or sculptures on display in their homes, where they can derive pleasure from admiring them, Ms Kramer said.

Insuring and protecting your piece of art is also important, she added, and noted that Bermuda’s environment, particularly the often high humidity, presented challenges such as controlling mould and mildew. Framed works of art should also ideally be behind glass that protects from UV light.

Ms Kramer suggested sculpture as a more practical art format for a Bermuda-based collector.

Clarien Bank arranged and hosted the investment in contemporary art evening as an opportunity for its clients to consider alternative types of investment.

Ms Kramer’s talk focused on the so-called “middle market” where works of art generally range in price from $100,000 to $1 million.

While describing buying contemporary art as a stable investment, she also pointed out that the world of art collecting and investing was not immune to global shocks.

By way of example she recalled being at a Damien Hirst sale in 2008 with high prices being paid for the British artist’s work. The following day the Lehman Brothers bank collapsed and the art market, in tandem with global financial markets, went downhill for a number of years.

However, she added: “The market is more diverse because there are so many people who are collecting. I’m sure there will be downturns, but there are artists who do survive a two- or three-year downturn.”

Explaining why the bank’s clients might want to become involved with contemporary art, Clare Spearing, head of private banking, said: “This is to compliment people’s portfolio; it is an alternative investment market.

“It’s important to do your due diligence. They value the art and what is out there. It takes the expert to know what to buy. “

Ms Kramer echoed that advice, pointing out that it was important to verify a piece of art’s authenticity and provenance before investing in it.

She said: “You can come and see an auction specialist. I’m willing to help. We have client relationships with art advisers. We can point you in the right direction.”

Paul Finn, Clarien’s head of wealth management, was impressed by the wide variety of people who attended the alternative investment event and expressed an interest in art.

“It is part of the overall strategy to our clients,” he said.

“The thought with this is to provide a forum about something that people are not talking about. And how often do you get to listen to someone like Courtney?”

Ms Spearing, added: “It’s refreshing to talk about something other than bank products. This is going to be one of a series.”