Technology has had an unprecedented impact on the art market in recent years. Take, for example, the three French artists in the collective “Obvious,” commissioned by Christie’s auction house, who used an AI method known as Generative Adversarial Networks to feed images of 15,000 European paintings from the 14th to 20th centuries into the program to create an original portrait. While they weren’t the first to experiment with using AI to make art, their creation set a record. Christie’s had estimated the portrait’s value at only $9,000 to $10,000 (New York Times, 2018), yet it sold on October 25, 2018, for $432,500. Talk about technology disrupting a market!
Welcome to the art market, where prices and values can be unpredictable. Typical considerations include the condition of a piece, its provenance, recent prices for works by the same artist, and new research and scholarly appreciation. However, as panelists at J.P. Morgan’s Advisor Conference in Paris agreed, market trends, reputational upticks and savvy marketing can have a significant impact on collectors’ decisions. While art may be viewed as an attractive asset class, values can fluctuate dramatically over time. J.P. Morgan likewise offers information, best practices, connections, referrals with appraisers and access to world-leading experts, such as the panelists at the Conference, who addressed several important trends in the diverse ecosystem of the art market.
To begin with, art by living women is gaining greater attention. According to Charlotte Eyerman, Director and Chief Curator of the JPMorgan Chase Art Collection, these artworks can be good investments, since they have been traditionally undervalued. For example, on October 5, 2018, a painting by British artist Jenny Seville sold for a record price for a living woman artist. The same night at Sotheby’s in London, a work by another contemporary artist, Banksy, self-shredded (orchestrated by the artist, apparently without the auction house’s knowledge) just after the winning bid for it came in.
On another note, significant sales activity has shifted from the U.S. and European markets to Asia, where there are many wealthy new collectors. Christie’s Chairman, Francois Curiel, stated that about 30% of the auction house’s sales are now in Asia. As a recent example, a former taxi driver in China who amassed a small fortune by investing in stocks and bonds purchased a Modigliani painting for $170 million, far above the $100 million prior high for a work by the Post-Impressionist master (New York Times, 2015).
Many people inquire about how to start a collection. Kristin Gary, a private dealer specializing in Old Masters and based in New York, generally advises clients to start by looking—going to museums and art fairs, deciding what they love, and doing their homework about the artists and their markets. Online resources such as Artnet can provide information on recent and historical auction sale prices, which makes the market more transparent. Private transactions are not disclosed to the public.
Some private collectors end up having an impact on global judgments about what’s important, as well as prices, Gary noted. About 20 years ago, the collector Thomas Kaplan became an enthusiastic and voracious collector of 17th-century Dutch art. He has bought all three of the Rembrandts that have entered the market since then, as well as hundreds of works by lesser-known “Leiden School” painters, whose creations thereby gained far greater respect. In 2017, Kaplan’s Leiden Collection was exhibited at the Musée du Louvre, and then traveled to Russia. It’s currently in China and is heading to the Middle East next.
Furthermore, lending to museum exhibitions can be a way for collectors to increase the value of their works due to exposure, prestige and new scholarship. Perhaps, as a result, museums have generally viewed borrowing from privately owned artworks as taboo. Laurent Salomé, Director of the National Museum of the Versailles and Trianon Palaces, noted that many years ago he had to avoid borrowing works from private collections for a major retrospective he curated for the Grand Palais. “Now it seems a bit ridiculous,” he observed. “We know it’s against scholarship. We cannot imagine organizing an interesting show, especially if it’s a monographic exhibition, without borrowing from private collections.”
Moreover, there’s a responsibility that comes with buying. “When you start to collect, you build art history. Just the fact of gathering paintings or ceramics, or contemporary art says something and can bring new attention to some things,” Salomé explained. “You have to really be conscious of your role as a collector, potentially adding value to the objects [you purchase].”
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