Innovation Blog

Art as Common Stock: Will It Fly?

By Shlomo Maital

     

Vezzoli, Premiere of a play that will never run

The French company A&F Markets has come up with a venture called Art Exchange that will treat artworks as investment vehicles, opening them up to partial purchase by shareholders.  The first two works to be offered by Art Exchange are both owned by Paris’s Yvon Lambert Gallery.  Pierre Naquin, the founder and president of the investment venture, related that the initiative has just launched with an offer of shares in two pieces, one by Sol LeWitt and the other by Francesco Vezzoli.   Now 11,000 shares of LeWitt’s “Irregular Form” are available at €10 ($13) per share, for a total value of €110,000 ($142,000) and 13,500 shares of Vezzoli’s “The Premiere of a Play That Will Never Run” are also offered at the same rate, giving it a total price of €135,000 ($174,000).

    What is the basic idea of this innovation?  Suppose you are an investor, and believe that art is a good investment, as part of a diversified portfolio.  You can invest in it by buying a painting or a sculpture.  But the price is high, and you may lack expertise.  So why not offer ‘shares’ in a painting, so that when the value of the painting rises, you profit (and take the profit when the painting is sold).

   Apparently this art stock market is not the first.   China’s Shenzhen Artvip Cultural Corporation started selling shares last year on the Shenzhen Cultural Assets and Equity Exchange.  Instead of selling slices of an individual work, Artvip sold 1,000 shares in a collection of pieces by artist Yang Peijiang, which sold out immediately.

    Is this idea good for art?  I heard an expert criticize the idea.  But surely, by making art ‘liquid’, you attract resources to art and thus help both galleries and artists. 

    This art stock market is not for collectors.  They are well-heeled, and want to own paintings, so they can enjoy them while perhaps making capital gains.  This market is for ordinary people who feel that perhaps, the market for art is bullish and worthy of, say, a 10 per cent tranche of their total investments. 

    There are some open questions.  How is the decision made to sell a painting, and when?  By a ‘shareholders’ meeting’?  Majority of shares decides?  How are shareholders consulted?

   Like all innovations, the market will determine this one’s success.   I think it might just work. Stay tuned.