High-end Master Pieces
We are focusing mainly at Contemporary & Modern Art: Picasso, Van Gogh, Monet, Mattise, Cezzane, Modigliani, Richter, Magritte and others Contemporary Art Gallery Proprietor.
Also we do Represent big number of private investors and collectors seeking to acquire fine art by artists from 19th century French, Impressionist, modern and post-war periods. We are also looking for Surrealists and Fauve. Our interest includes Rothko, Monet, Renoir, Sisley, Degas, Pissarro, Picasso, Warhol, Matisse, Magritte, Dali, Rodin, Frankenthaler, Diebenkorn, Van Gogh, Hoffman, DeKooning, Warhol, Lichtenstein.
Art Advisory and Collecting
The art market is a whole ecosystem unto itself, and having an art advisor that can navigate the many components and layers of the art market is a cost effective way to collect wisely with long term value in mind.
For new collectors, the starting point always begins with education and finding out what kind of artworks the client is drawn too: do they have a preference for medium (painting / sculpture…), are they drawn to specific topics, themes, regions, or periods. The first few meetings will help establish the client’s interests, aesthetics, and collecting goals.
For more experienced collectors, the process begins first by taking a look at the client’s existing collection in order to identify which parts of the collection the client wants to change, strengthen, or de-accession, and how their future collection strategy will differ.
Then PickTheArt will begin to look at artists of interest which will take into account budget, collection goals, interests, and long-term value and finally will build with the client an acquisition list and strategy.
When it comes time for the artwork acquisition, PickTheArt will aim to make sure the client pays the fair market value, gets a strong work by each artist and conditions are perfect.
Pick The Art
According to UNESCO, “the creative economy is one of the most rapidly growing sectors of the world economy”.
Art as an asset class
Art particularly attracts investors as it is regarded as a value-preserving asset class. Like gold, artworks are less susceptible to risks associated with financial market crashes than stocks and bonds. Because of the intrinsic value of art as luxury item, art is able to rebound and even grow faster than traditional asset classes in response to financial turmoil.
During periods of financial and political instability, art has historically been viewed as a safe haven because it is a reliable long-term store of value as well as an inflationary and currency hedge. This pattern is evident following the 2008 financial crisis. While the artnet Index for the Top 100 Artists was able to recoup its peak value by 2011, the S&P 500 took five years to recover.
Additionally, art is particularly attractive to investors owing to astounding resale success stories such as Leon Bonnat’s 1891 painting. Samson’s Youth first sold at auction in 2006 for US$408,000. When the work resurfaced in London 12 years later at Christie’s, the same oil on canvas earned almost five times its original sale price, selling for more than US$2 million with a premium. Bonnat’s profitable painting is one of thousands of works to soar in value upon returning to auction.
it’s worth taking a look at how the art market has performed in past recessions and slowdowns in the financial markets, so as to outline the correlation between various categories in the art market and other asset classes for investors looking to diversify their asset allocations.
Following the 2008 financial crisis, markets for virtually all assets experienced a steep decline. While the S&P 500 was only able to regain its strengths by 2013, the index for the top 100 artists bounced back and even outperformed its 2008 peak within two years of the drop. Also, artnet index for Post-War and Contemporary Art (especially with American artists leading the push for both collecting categories) pointed out that prices took a dive from 2008 to 2009 but have aggressively grow outpaced the financial index after 2009.
Similar trends are showcased in the latest stock market selloff in 2015 and 2016. As the S&P 500 flat-lined, the index for the top 100 artists reflected the financial slow-down, also taking a hit during the time period. Yet, a breakdown of total sales value by price bracket suggests that high- end works worth US$1 million and above were able to lead the market comeback following the 2015 and 2016 slump
Finally, positive returns in the art market between 2000 and 2018: artnet’s Index for Top 100 Artists produced an 8 percent Compound Annual Growth Rate (CAGR) between 2000 and 2018, compared with 3 percent for the S&P 500.
More of today’s collectors are motivated by investment returns and portfolio diversification, as well as a desire to hedge against inflation and store wealth in a safe haven asset.
Art and collectible wealth
The market for works of art is a function of global wealth.
Art and collectible wealth estimated to be $1.74 trillion: 2019 Deloitte’s report estimate that UHNWIs wealth associated with art and collectible wealth to be an estimated $1.742 trillion in 2018, up from $1.622 trillion in 2016. The projection for 2023 is that this will grow to an estimated $2.125 trillion.
Although global wealth has increased greatly among Ultra High Net Worth Individuals over the last decade, this report predicts the population will grow by another 22 percent in the next five years. That means by 2023 another 43,000 individuals will have more than US$30 million in liquid assets.
In addition, Millennials generation who’s only holding a small proportion of total UHNWI wealth, are having an impact on philanthropy by combining charitable giving with profit-making endeavors and social enterprises.
This is the generation that is likely to develop the social impact investment and philanthropic models for art and culture that will prevail in the 21st century.
Benefits for holding art long-term
Analysis of repeat auction sale data from Sotheby’s Mei Moses suggests that works of art held off the auction market for at least ten years benefitted from the “holding period effect”, in which works were more likely to be sold for a profit and had less volatile Compound Annual Returns.
A total of 88 percent of Contemporary works and 80 percent of Impressionist & Modern works held for over ten years had a resale price higher than their purchase price, while only 65 percent of Contemporary works nd 57 percent of Impressionist & Modern works resold within three years sold for a higher price.
Consignors who held works for over ten years— none suffered outsized losses for either Contemporary or Impressionist & Modern pieces.
Thus, most auction consignors who held works of art for at least ten years benefitted from the “holding period effect” as their art grew in value.
2019 Art Findings
The benefits of developing a holistic wealth management advisory service remain the key argument for service providers to include art and collectibles in their service offering.
A large majority (83 percent) of wealth managers said that a desire to offer more holistic services to their clients was a vital motivating factor.
Strong consensus among wealth managers: 86 percent of whom said art should be part of a wealth management offering. The vast majority (86 percent) of art professionals and art collectors (81 percent) said the same.
72 percent of wealth managers said they offered art- related services to their clients.
A large majority (84 percent) of art collectors surveyed in 2019 said that they wanted to include art in their wealth reports so as to have a consolidated overview of their wealth and a better understanding of their exposure (up from 61 percent in 2017).
This year’s survey findings (2019) among collectors indicate a shift towards more financially motivated art ownership models. The numbers of respondents who reported buying art for the purposes of boosting investment returns or diversifying their portfolio have seen an increase since 2017 – 52 percent of collectors said that portfolio diversification was a strong / very strong motivation for buying art this year (up from 36 percent in 2017).
Both art collectors and art professionals see “social value (status)” as less important than they did in the last survey in 2017. This may signal that buying art is becoming less elitist and demonstrate a shift in focus from external values (i.e., how we are perceived) towards personal values (i.e., emotional pleasure, individual happiness, etc.) and towards the financial value of owning art.
81 percent of art professionals said their clients bought art for collecting purposes, but with investment in mind. The majority of collectors (65 percent) said they bought art for both emotional and financial reasons.
It is interesting to note that 81 percent of the art trade (based on findings from the advisors, dealers, and auction houses surveyed) believe their clients are motivated by both emotional benefits and financial returns when buying art.
Art Technology and Blockchain
Technology will drive change in the art market: Collectors, art professionals, and wealth managers believe that technology could have a profound impact on a number of aspects of the art market, including transparency and regulation, where there is a significant lack of trust in market data. This is a serious problem, as decision-making tools for valuation and risk models depend heavily on this data and the trust we place in it.
There has been a significant shift in perception among collectors and art professionals about the impact of technology since Deloitte art survey in 2017. This is particularly true in relation to technologies that seek to facilitate the dissemination of information and would help to educate the market.
84 percent of the collectors surveyed in Deloitte 2019 report (up from 45 percent in 2017) and 76 percent of art professionals (up from 54 percent in 2017) said that they believed technology would improve provenance tracking and the traceability of artwork.
79 percent of collectors and 84 percent of art professionals believed this would be an area where technology is playing and will continue to play an important role, versus 75 percent and 76 percent respectively in 2017.
A large majority (75 percent) of collectors (up from 60 percent in 2017), also believed technology would lead to more transparency, and 76 percent of art professionals said the same (up from 55 percent in 2017).
This is a significant jump and a response to the high number of blockchain-based companies that have emerged in the last two years, many of which are focused on building art registries and providing mechanisms for tracking works of art and their provenance.
Research by Fuelarts shows that 80 percent of ArtTech companies that emerged after 2017 were using blockchain as their core technology.
Blockchain is a very promising technology for the art world, as its characteristics offer solutions for problems that the art world has struggled with in the past: transparency for buyers and sellers, the traceability of artworks, and the security of transactions.
Thanks to blockchain technology, the user can:
- Have art certified by a recognized body
- Register all important details and characteristics of the art
- Buy or sell certified art pieces
- Invest in a fraction of an asset that has been split into multiple parts with designated values
- Have an overview of all art pieces and fractions they hold
While this solution can bring real added value, its adoption is quite low in the art market and in other industries: 23 percent of private banks said Blockchain could have a significant impact, whilst only 6 percent of the family offices surveyed said they thought it would be important for the development of art-related services.
These findings could reflect the fact that there is still a lack of understanding of the appropriate use cases for art and blockchain, rather than a lack of confidence in the technology itself. However, as blockchain evolves and become more mainstream, we would expect the blockchain infrastructure to play an important role in promoting transparency and increasing trust in the art market.
In five years, technology companies will have become significant players in the art market. Technologies like blockchain and AI embedded in so-called “edge devices” will be operational and no longer be novelties because they will have become almost seamlessly woven into the fabric of our daily lives.
The result for large sectors of the art market will be an increase in transparency, efficiency, and liquidity as regards art-based assets. This will be beneficial for artists, art collectors, and all other actors within the ecosystem who are prepared for this new reality.
A new collaborative model is required to address many of the issues and challenges facing the development of the art and finance industry over the coming decade.
Fractional art ownership – The new age of art investment
The fact that collectors are expressing a greater focus on investment when buying art, coupled with a decline in the global art investment fund market in recent years, suggests that new models for art investment may be needed in order to democratize a market worth billions of dollars.
There are mounting calls for art market business practices to be modernized: the majority of all stakeholders felt that current business practices needed to be modernized, with 80 percent of art professionals (up from 74 percent in 2017), 81 percent of collectors (up from 64 percent in 2017), and 76 percent of wealth managers (up from 73 percent in 2017) expressing this view.
One of the models that have emerged in the last years is the notion of fractional art ownership. This model has gained traction in the last two years on the back of rapid developments in blockchain technology and a willingness among investors to invest in a wide range of assets from real estate to intellectual property and art.
Fractional ownership could lead to increased demand for art investments, potentially increasing overall art prices, and by extension, subsequent production of new types of art.
This could prove particularly valuable and interesting for low-net-worth individuals, who would usually be excluded from such type of investment opportunity, and now could own a fraction of an expensive work of art.
The main question that arises is how collective ownership of a piece of art can be managed. The artwork itself could, for example, be maintained by a custodian, who has been agreed upon and has the resources and experience to maintain a collection.
The cost of this maintenance would be distributed across all holders and payments managed by create complex smart contract that grant access rights to derivative art works with the purchase of a fraction of a painting in a fair and transparent manner.
An example of such fractional ownership is Andy Warhol’s painting, “14 Small Electric Chairs” which was tokenized and sold on the Maecenas platform in 2018. Both the sale and subsequent trading of these tokenized certificates could be tracked through the use of blockchain technology.
Despite the fact that most recent fractional art ownership models focus on “democratizing” art investment, it may be the case that fractional ownership is a more suitable model or vehicle for democratizing art patronage.
Private-public partnerships – A new social impact investment?
Could private-public partnerships pave the way for new social impact investment models in the cultural sector? In the future, could we see partnerships between the public and the private sector redefine the notion of ‘public’ assets (collections) and maybe turn collections into investable assets, which could form part of a public institution’s funding strategy? Could fractional ownership be the funding model of the future for public art projects and museum fundraising?
Given the mounting financial pressures faced by cultural institutions, there should be a discussion about how to turn the value of existing public collections into working assets. For example, would it be inconceivable to explore and leverage the economic value of the collections of public institutions, to support the institutions’ future strategies and development? Is it feasible that the private sector could become a valid partner in a new type of public-private partnership whereby the private sector becomes a co-owner of national heritage pieces so as to fulfil a social impact investment objective?
One potentially provocative idea to tackle a widespread lack of finance in the culture sector is to turn existing public collections into yield-generating assets to ensure public institutions have enough funding to fulfill their social mission. The cultural sector faces numerous challenges: the reduction in public budgets; increasing competition with other cultural institutions; competition to find donors, patrons, and sponsors; the increasing development of private museum infrastructure; the pressure to continue to develop customer and visitor experiences with the support of digital technologies, and so on.
The advent of blockchain technology could usher in the next generation of art and cultural impact investment models. Potentially, these could be models that enable art and cultural institutions to raise finance for specific projects or maybe even to acquire works of art for their collections, and that enable investors to enjoy the benefits of fractional investment through the emotional, social, and (maybe) financial benefits of being a patron.
Crowdfunding can also be used to crowdfund future art projects that investors can own fully or partially. Anyone who contributes to the funding of an art project could receive a proportional share of the value of that project, according to the terms laid out in a smart contract.
The art and finance industry has the potential to grow and expand further in the coming years as a new economic reality in the cultural sector is forcing public organizations to think about finance in new and different ways. The more art projects and collections become public, the more powerful they get.
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