Observer’s 2023 The Business of Art Power List: Art as an Asset Class has listed Philip Hoffman, alongside Allan Schwartzman, as a leading authority on transforming art as an asset class. Patti Wong & Associate’s Daryl Wickstrom was also named by the Observer as one of the Most Influential People in the Art World Today.
A visitor photographs the painting Boy and Dog in a Johnnypump by Jean-Michel Basquiat in Paris, purchaed by Observer Power Art Figure Ken Griffths. Photo by Sabine Glaubitz/picture alliance via Getty Images.
According to Observer, art is rapidly reclaiming its status as a lucrative asset class, a trend highlighted in the 2023 The Business of Art Power List. Among the leading authorities recognized for transforming art into a sought-after asset class are Philip Hoffman and Allan Schwartzman. The duo stands out for their pivotal roles in reshaping perceptions and practices surrounding art as a financial investment.
Historically, art funds struggled to gain traction despite the potential for robust returns and low correlation to traditional financial markets. Barron's, in a 2019 report, noted a decline in assets from $2.1 billion in 2012 to $830 million in 2017. The prevailing sentiment suggested that if one sought art for portfolio diversification, simply purchasing a painting and relishing the collector experience sufficed.
Fast forward to the present, and a paradigm shift is evident. An article by the same publication declares, "The Fractional Art Market Keeps on Expanding," signaling a renewed enthusiasm for treating art as a tangible asset. Masterworks, a platform facilitating the buying and selling of shares in blue-chip artwork, has been instrumental in popularizing this concept. Notably, Harold Eytan and Loic Gouzer’s Particle, another co-ownership platform, has generated substantial interest in this evolving financial landscape.
Last year witnessed the debut of Artemundi in Switzerland and the launch of Freeport in Delaware in May. Additionally, the "IPO" of Francis Bacon’s Three Studies for a Portrait of George Dyer (1963) by the Lichtenstein-based Artex marked a significant milestone this year. Evan Beard, Executive Vice President of Private Sales at Masterworks, attributes this transformative shift to a new generation of financially-driven collectors. He emphasizes that today's collectors, hailing from backgrounds in private equity, real estate, hedge funds, and tech entrepreneurship, prioritize financial gain over the aesthetic pleasure of art. While the market segment exhibits a geographic bias towards areas with a higher prevalence of LLCs, its growth is undeniable. The influence of key figures, including Philip Hoffman, Allan Schwartzman, and Patti Wong & Associate's Daryl Wickstrom, as recognized by the Observer's Power List, underscores the momentum propelling art into the forefront of the financial landscape.
Emma Lee is an arts news journalist for FETCH London. She has written for Vogue, The Art Newspaper and The Financial Times and specialises in art news and art market analysis.