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Art Gets Its Own Stock Exchange

  • by
  • January 10, 2011
  • 2:30 pm
Art Gets Its Own Stock Exchange

Can’t afford to buy a piece of art?  How about a part of art?  Long associated with elitism and commodification, art collecting to some seemed to be yet another ramification of capitalism–that is, the valuing of otherwise invaluable creativity through the more easily-grasped measurements of numbers: prices, sizes, how much and how many.  To some, it’s sacredness translated into a numbers game.

Next week, the boundary between art and money market profit will become even more blurred.  A&F Markets, a Paris-based firm, announced that it will be launching Art Exchange on Monday, the first stock art exchange where investors can buy and sell shares of artworks valued at at least $130,000 for shares starting at $13.  The artworks, starting with a current modest number of six, are all gallery-owned and maintained.  Each piece is authenticated and certified, and anyone can access and consult the list of available pieces online through its website.  Potential investors can also watch price shares fluctuate on the website.  

“In return for a 5% commission, the exchange has the exclusive right to sell shares in a work over a period of three to six months, but if it does not sell 20% of shares within six months, the gallery recuperates what has already been sold and retains the work of art,” The Art Newspaper reported.  “If one collector amasses 80% of shares in a work, they have the option to buy it outright and remove the work from the exchange.”

About six Parisian galleries are currently participating, with plans to expand the exchange to galleries in the US, the UK, and China.  The exchange also wants to open its own gallery within the next 6-9 months.  As of this point, Art Exchange is not regulated by France’s stock market regulators, Autorite des marches financiers.

“We believe that we respond to a clear demand from financial players: the opportunity to invest easily in a highly appealing asset that has, until present, not been possible,” said A&F Markets founder Pierre Naquin.  “Through providing the art market with the transparency and the liquidity needed, we believe to have found the right formula that allows a much larger public to finally consider investing in art.”

“The Art market is very particular and clearly disconnected from the main economic cycles,” said A&F Operating Manager Caroline Matthews.  “The mixture of long-term security and short-term profits makes Art an interesting asset, yet to be properly explored by many investors.”

While A&F hopes to use the exchange to open art investment to a population that cannot easily afford to buy artworks out right, critics of the scheme have voiced their concerns that breaking the monetary value of a piece down into shares may in fact de-value it because its importance is then measured in terms of shares versus creative and aesthetic impact.  

When you commodify a value, such as art, for the sake of profit, you turn it into a concept that can be bought and sold, so that attitudes and values that are associated with it are then bought and sold with it as well.  

Essentially, putting art on the stock market quantifies a qualitative process, a direct ratio that investors can measure based on how much money they can make off of it.  Art compounds its value over time, based on exhibitions, scarcity, the artist’s portfolio.  To profit from it in the real-time grind of stock exchanges versus long-term appreciation is like trying to make a square peg fit in a round hole.

“It has been suggested that Art Exchange will create a new form of collecting art, which I think is misleading,” London’s Fine Art Society managing director Patrick Bourne said.  “Only if some of the investors turn into proper collectors, buying principally for aesthetic and cultural reasons, will the exchange have contributed something to the art world, as opposed to the art market.”

It’s a debate that has no clear end in the art world– how do you put a price tag on creativity, on aesthetics, on human expression?  How does an artwork grow in value like a business grows in profits?  Creating a stock exchange out of art doesn’t increase the investment value of art so much as it supposedly re-alligns the value of the stock market, and, by extension, capitalism.  To many, art is sacred, a reflection of humanity at its best, worst, and everywhere in between.  

The stock market, particularly in this recession age, is seen by most as corrupt and fueled by self-interest and greed.  While capitalism needs regulation, to do so in art is as blasphemous as censorship.  Which makes the image of art a PR bandaid.  The stock market is in serious need of a facelift.  It’s not so much a venture in art as it is a placebo for investment firms and their clients.   

As utopian as this idea of opening art to the masses sounds from the 26-year-old Naquin, it’s important to remember that “investor” is not synonymous with “collector.”  As opposed to collectors, who get to see, touch, display, interact with artworks that they buy, investors don’t really get any contact with the pieces they buy shares of.  What’s the point of co-owning a Picasso if you never get to see it?  This scheme is ideal for those only looking to make a profit from art, not an experience or connection with it.  

Artistic value is for the art world to contextualize, not stockbrokers whose only foray into art history involves picking away at it like the Australian mail order company Subdivision Art that tried to scheme selling affordable framed Picasso art in 1986 by cutting a 1959 linocut print called “Trois Femmes” into 500 one-inch square pieces and pricing each one at $135.  While A&F isn’t mutilating artwork the same way that Subdivision Art intended to, it still feels wrong to sell slices of art like a la mode pie.

As opposed to real estate and insurance, art is tangible, but it’s also one of the most speculative, obscure commodities this side of derivatives.  It’s just more bizarre–owning shares rather than the work, in essence, owning a piece of paper of a piece of paper, ad infinitum.

The best way to invest in art?  The method that never changes.  Buy what you can afford from emerging artists you like.  Surround yourself with what others inspire you to see.  Live with the joy and the emotional connection of your purchase.  

If it appreciates, great, but the real value should always be in the process of finding yourself through the truth that lives in others’ expressions versus their pocketbooks.

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Photo courtesy of TheTruthAbout via Flickr

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2 comments

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2:49PM PST on Jan 12, 2011

That's an interesting concept. :) I wonder how well it will do.

5:58AM PST on Jan 12, 2011

Article describes this Art exchange as the first stock exchange for art. However I launched www.artstockmarket.com in septemeber 2009 and to my knowledge that is the first.

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