Episode 47 (podcast) The Intersection of Art + Finance
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Accessibility to the art market was once reserved for an elite group, but that is changing rapidly due to the customized platforms available today, meeting at the intersection of art and finance. Our panel of guests, including Cynthia Sachs, Elizabeth Von Habsburg, and Timothy Kompanchenko, will discuss the revolution of the art industry through the lens of finance and how it is championing accessibility and opportunity, not only for the seasoned collector but for the new entrants who want to participate at different levels.
Art and finance are both driven by the growth of tech. From tools, data analysis, and customized platforms, technology is not replacing what’s happening in the art market, it’s only enhancing it. Accessibility to data plays a critical role in understanding today’s art market and provides a greater understanding of how to effectively lend against art.
Not uniquely, the COVID-19 pandemic forced great changes in the art market. From expanding the auction market in a significant way online and creating a need to be able to see galleries online, to being able to see that data in terms of price transparency. These changes are hugely exciting, hugely powerful, and have become what Cynthia Sachs calls ‘a game-changer for the market’.
In another aspect of the intersection of art and finance, it seems that just about everyone understands mortgaging in the real estate realm, but what about similar credit backing in the art market? Cynthia unpacks the lending opportunities that are created by tens of millions of dollars worth of art assets and the importance of backing art with credit to secure its place as a true asset class.
Of course, you can’t talk about all that is happening in today’s art market without addressing NFTs. These tokens have created an explosion of activity in the art market. NFTs create a way to own a token that represents a physical artwork that already has that trusted security and can be traded in a technical way without many platforms. As Timothy Kompanchenko explains, these tokens open up the already existing, established physical art market to a new sales channel.
Tech has effectively opened up the industry for more investors than ever before through more readily available access to information, the use of tokens, and the ability to loan against pieces. Because of NFTs, the art market is more accessible than ever before. Compared to 30 years ago, when art was not considered an asset class, the art market is leveraging the incredible dollar power behind incredibly valuable pieces of art. Lending within the art market alone is worth billions of dollars.
So what does today’s art market investor look like? Given all of the opportunities that are available, according to Elizabeth Von Habsburg, there is greater variety than ever before in the age, geographic diversity, and financial resources of the average art investor. As she says, in today’s art market “there is really something for everybody.”
From understanding the recent changes in using art as loan collateral to clarifying the role in tech data to track stolen art and details about the metrics used to generate data on art, this panel conversation covers a plethora of topics surrounding one of the hottest markets available to investors today.