March 29th 2023
September 15, 2008, was a shocking day. That morning, Lehman Brothers filed for bankruptcy. But only a few hours later, Sotheby’s in London opened an audacious, two-night auction of works by British artist Damien Hirst. Known for his spin paintings and conceptual pieces with animals submerged in formaldehyde, Hirst took 223 works directly to the auction house rather than sell them through his galleries. Despite the growing economic uncertainty worldwide, the event set the record for a single-artist auction: $200.75 million. Exceeding the high estimate by 13%, with over one-third of the buyers purchasing contemporary art for the first time, the sale demonstrated that art remains resilient against intense market volatility.
The same holds true today. The war in Ukraine, rising inflation, and the COVID-19 pandemic, in addition to the climate crisis, have not dampened collectors’ spirits. The 2022 edition of the Art Basel and UBS Survey of Global Collecting, widely considered the most reputable study of the art market, reports that the market exceeded pre-pandemic levels in 2021, following the biggest recession it faced in 10 years. “Aggregate sales of art and antiques by dealers and auction houses reach[ed] an estimated $65.1 billion, up by 29% from 2020, with values also surpassing pre-pandemic levels of 2019,” the report says.
Morons, 2006, Screenprint by Banksy
“Uncertain times often create the best investment opportunities. This has long been the case for art, which has been a sound purchase even when the markets are at their most volatile,” says David Izzard, CEO of London’s Yield Gallery. The gallery, which began as a family-run business, offers the opportunity to collect art investment pieces by blue-chip artists such as Banksy, Warhol, and Basquiat. “Investors have seen art – and especially works by those whose values have proven themselves time and time again, like Basquiat and Haring – as a key element in their portfolio diversification. Along with numerous financial experts, we believe this will continue to be the case in 2023.”
The recessions in the United Kingdom and Europe, and the likelihood of the United States following suit, make investing in real assets increasingly appealing. A Citi Global Art Market chart reported that, as of December 2020, the annual return for contemporary art since 1975 was 14%, in contrast to 9.5% from the S&P 500. More graspable as a commodity than real estate or wine, with the added benefit of creating passive income when works are loaned to museums, fine art can provide aesthetic enjoyment as well as appreciate in value over generations.
Investing in art can be intimidating, however, and mistakes are easy to make. You’ll need expert help to chart the difficulties of authenticity and provenance. Equally, curating bespoke portfolios that maximise the use of art as a strategic asset is a specialism in itself. At an established Soho studio and new gallery in Blackheath, a team of experienced art specialists at Yield Gallery follows art-market trends and data each day in order to assist first-time buyers and seasoned collectors alike, from acquisition through to exit strategies.
This moment in the art market is particularly dynamic, with auction records being continuously broken. On May 10, 2022, Andy Warhol became the most expensive American artist sold at auction when his Shot Sage Blue Marilyn garnered $195 million at Christie’s, in just under four minutes. In November, the late Microsoft co-founder Paul Allen’s collection became the most valuable single-owner collection sold at auction, for $1.5 billion. On the other end of the spectrum, London-based research firm ArtTactic found that the number of auctioned works priced at $10,000 and under doubled in volume in 2022, which suggests the intense engagement of less affluent, often younger collectors.
It is understood that not everyone can afford to purchase Banksy’s Love Is in the Bin, which grew 1600% in value in three years when it most recently sold at Sotheby’s auction house for £18.58 million in October 2021. This is why Yield Gallery also features promising emerging artists, such as Matthew Marquis and Fern, whose work may generate even higher returns for investors in the future. With prices starting as low as £5000 and the availability of art financing, Yield Gallery encourages enthusiasts of all socioeconomic backgrounds to enter the market.
Allegra Seymour, Art Advisor with Girl With Ballon, 2004, by Banksy at Yield Gallery
