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). 

Separately, in November, Sotheby’s obtained worldwide buzz for its contemporary and “The Now” evening auctions in New York, which achieved a combined sales total of $314.9 million and new records for Barbara Kruger, Betye Saar and Elizabeth Peyton. One of the highlights was also Yoshitomo Nara’s large-scale ‘Light Haze Days / Study’, which sold for $11.9 million (with fees). Although a highlight that LTArt was particularly interested in was the record-breaking result obtained by Alighiero Boetti’s embroidered ‘Mappa’ (1989-91), which sold for $8.8 million (with fees). Overall, if we look at the previous year’s contemporary sale, which obtained $234.23 million (with fees), this is a very promising result. 

Importantly, the success felt by many of the big auction houses in 2022 is also due to the fact that sales are no longer “restrained” to the more traditional art forms, such as paintings and sculptures. Interestingly, Artcurial, a Paris-based auction house with only 20 years of experience, also had a record year with the sale of its fine art, cars and other luxury assets. It made around €216.5mn, up from €169mn last year and its previous high of €210mn in 2016. Artcurial’s owner, Nicolas Orlowski largely attributes the success to a high demand for interior design objects, of which three items by Jean Royère sold for €1.7 million combined (with fees). 

To conclude, it is hard to predict what 2023 will bring for the art market. However, the successful sales records of 2022 may offer some reassurance to those worried by the unpredictability of the financial markets in the months to come. 

Sources:

Benjamin Sutton, ‘Records for rising stars and women artists power an otherwise subdued Sotheby’s New York contemporary art evening sale’, Nov 2022,https://www.theartnewspaper.com/2022/11/17/85m-warhol-records-women-artists-sothebys-new-york-contemporary-auction

Melanie Gerlis, ‘“Glittering smokescreen” of auction highs masks a nervous market’, Financial Times, Dec 2022, 

https://www.ft.com/content/5cc5e24b-1e1f-496b-92ff-8751ec237c60