JTC : A View on the Art Market

At JTC we administer structures with a wide range of assets. Many of our clients have significant art collections, and they often want us to help with the buying, selling, insuring, moving and general management of the works. We interviewed Henry Little, Executive Director at The Fine Art Group, to gain his insights on the current market. What are the most common questions clients have been asking you in the last year?

When the art market softened following the onset of pandemic restrictions (March 2020 in the UK), the first question many clients asked was: what deals can I get?

The art market - like just about everyone else in the world - had a 'rabbit in the headlights' moment from March until about late June last year. Auctions continued, however, and dealers still needed to sell. We were able to acquire works by blue chip artists at knock down prices for our clients during this brief window. Since then the market has pivoted online and bounced back at an incredible pace. Dealers undoubtedly struggled - at all tiers - while the auction houses have invested huge sums in sophisticated digital infrastructure. After the initial dip, the market warmed up again in late June / July 2020. The momentum continued until the most recent Hong Kong auction sales in May 2021, where many buyers with deep pockets have been chasing sought after works. The Asian art market propped up the overall numbers last year and the considerable 'heat' there has persisted. We've taken advantage of this by spotting the trend early enough to consign major works to the recent sales with significant profits for our clients. The pandemic threw a major curve ball but our job remains the same: to foresee rises and falls in the global art market(s) and to exploit the situation to our clients' best advantage, whether buying or selling.

Has COVID-19 had any impact on people's appetite to purchase art?

The onset of the pandemic in March 2020 had a polarising effect. Some clients wanted to sit on their hands while the situation played out, others went into overdrive to collect as much as possible while it was a buyer's market. This state affairs persisted until roughly autumn 2020 when all of our advisory clients were firmly focused on collecting, either for investment, passion, or both. Since then we've been working full tilt to source, vet and acquire works at all prices points from 10,000 GBP to 10 million GBP plus. The period from the end of January until Easter 2021 was particularly frenetic for me personally, and stands as my busiest period for private client acquisitions ever. This was a perfect combination of clients with less travel and fewer distractions and a freshly digitised art world with both galleries and auction houses fully moving online.

If anything, a return to real life may be what pulls collectors away from art buying for a short time while they're busy socialising, holidaying and everything else they had forgotten existed! What I do know is that we - the trade - are desperate to travel again. Not to travel for travel's sake, I think that ship has sailed in the art market. But to be in New York for the big auction weeks, to go to the Venice Biennial or to travel to Basel for the fair. The art market calendar was unsustainably packed pre-pandemic, but our usual rhythm and routine has been displaced. We want it back. The art market is a social beast and it thrives on personal contact, not to mention seeing as much as possible.

What do you predict that people will be buying more of in the next 12 months?

The most dominant taste segment in the market right now is Asian millennials. They have an unrivalled buying power and their experience of art has often been informed by an engagement with other collectible categories and luxury brands. Younger artists whose work photographs well and taps into current zeitgeisty themes associated with identity, ethnicity, gender and sexuality are performing well. We expect this to continue. Undervalued but historically validated female artists, especially those from the mid-twentieth century onwards, are also on a long term upward incline in terms of prices and overall demand.

Despite these much talked about high points and the quick cycles in taste, much of the volume of what is bought and sold is well worn fare. Picasso, Dubuffet, Fontana, Monet et al. The media and the art market's chattering classes can distort the underlying reality of what's happening. We love to talk about new records, hot new artists rising through the auction ranks or the next young gallery opening. But ultimately the bread and butter of the market is artists like Warhol or Picasso with outputs and 'brands' voluminous to cater to all ages, tastes and budgets.

Our job as advisors is to cut through these trends and guide our clients on the real value of things. We are inherently cautious and spend most of our time saying 'no' to private advisory clients. No - this is too expensive. No - the condition isn't right. No - this artist's market is overheated. And so on. Conversely, we work day-in-day-out to get access to the best material by highly sought after artists. And it's our job to push our clients to pull the trigger when the right work comes along.

Why do you think there has been a recent rise in demand for independent art advice?

The art market is a wonderfully Byzantine place. In many ways this opacity is what makes it so endlessly entertaining and engaging, for collectors and the trade alike.

On the secondary market, where artworks are being resold, art dealers have only one real goal - profit. This means they can ask whatever price they want and woe betide the buyer who doesn't query the asking price and negotiate. In some cases, especially for very well-known artists, we've negotiated discounts of upwards of 30% on list asking prices.

On the primary market, where works are sold for the first time, the 'noise' around an artist, which can fade quickly from one moment to the next, is difficult to decipher. You need an advisor who's been around the block several times, who's seen numerous cycles in the art market and is inherently sceptical. Our general creed is that if something sounds too good to be true, it generally is. Either condition is wrong, provenance isn't clear, or the artist isn't as good as they're all cracked up to be.

The infrastructure around the art market is evolving quickly in the digital sphere with much talk of 'democratising' the art market or increasing 'transparency'. These enterprises are all well and good. But the slightly unfashionable reality is that nothing beats connoisseurship, art historical knowledge and a head for pricing. There is no shortcut to transactional knowledge. The more you've bought and sold, the better you are. And this expertise is at the heart of everything we do.

About the Fine Art Group

The Fine Art Group is an independent, global team of art advisors and art finance experts. It is committed to supporting clients at every level of the art market across five core services: Appraisals, Art Advisory, Agency, Finance and Investment.

Founded over 20 years ago, The Fine Art Group has an unrivaled track record, occupying a unique position within the art ecosystem. From building a collection and acquiring art, appraisals, sale strategy and management to investment opportunities and art financing, The Fine Art Group has the experience and capacity to meet a wide range of needs and interests.

The recent incorporation of Pall Mall Art Advisors to The Fine Art Group, has enlarged the renowned team of experts and expanded the appraisals services worldwide. Pall Mall Art Advisors boasts an established presence in the Unites States and a strong performance track records that complements The Fine Art Group's offering. Together, the in-house expertise spans Western art from 1500 to present, with an emphasis on Impressionism, Surrealism, Modern & Contemporary in addition to fine jewellery, watches and valuable collectables. Through a trusted network of vetted consultants, The Fine Art Group is also well placed to provide advice across most other categories in the market.