10 January, 2023
Collecting art has long been perceived as a “passion investment”, providing the collector with not only an aesthetically pleasing asset but also one that can help to cleverly diversify their investment portfolio. However, is art the “safe haven asset” it claims to be? Is it really able to weather economic storms better than the S&P and other investment assets? If we look back to 2022, the answer seems to be positive.
It has long been argued that, like gold, art is less susceptible to risks associated with financial market crashes than stocks and bonds. Due to its intrinsic value as a luxury item, art is able to rebound and even grow faster than traditional asset classes in response to economic crises. Unlike many other industries, the art market appears to benefit from the rampant inflation, as it can be seen as a secure store of value during times of high financial volatility, which we have witnessed since the second-half of 2022.
Indeed, despite economic uncertainty, 2022 appears to be a record year for the art market. According to Artprice, Global Fine Art auction proceeds reached $7.49 billion in the first half of 2022, with the global turnover from fine art auction sales increasing by 8.8% in H1 2022 versus H2021, registering a record 326,000 lots sold in H1 2022 versus 313,400 in H1 2021.
In May, the priciest work hammered by Christie’s, courtesy of the collection of Thomas and Doris Ammann, was 'Shot Sage Blue Marilyn' by Andy Warhol (1964), which achieved the second-best art auction result of all time at $195 million. That same month, the Macklowe Collection became the most expensive collection ever sold in the world ($922 million). However, this was later surpassed by one of the year’s auction highlights, the sale of Microsoft co-founder Paul Allen’s collection of paintings and sculptures. It sold for a record $1.5bn in November 2022 (five of the paintings in the collection sold for more than $100 million in less than three hours!), taking the primacy of being the largest art auction in history. In December, Christie’s also sold many works in its Chagall-focused sale, ‘Marc Chagall, Colour of Life: Works Formerly From the Artist’s Estate’, for higher than their estimates. Remarkably, the auction house closed 2022 with the highest annual sales total in art market history at $8.4bn.
Moreover, in December, Sotheby’s triumphed with the best Old Masters evening sale in London (it marked the best total for an Old Masters sale since the pandemic). In particular, Titian’s ‘Venus and Adonis’ (c. 1555-7) sold for £11.2 million (with fees). In its entirety, the sale obtained a total value of £33 million (with fees), mostly dominated by Dutch and Flemish paintings of late Spanish collector Juan Manuel Grasset. It is also worth noting, as 65% of the works represented in the London sale came from continental Europe, that Sotheby’s fellow co-chair George Gordon has claimed that “Brexit has made little difference to consignments” (as cited in the Financial Times).