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Please find an abstract focused on the key elements of collection management that we thought would be of particular interest to you below.
The Art, and Science, of Collection Management
According to online database Artprice, high-end art outperformed the S&P 500 Index by an impressive 180% between 2000 and 2018. Amid the increase in art prices, many of our clients are finding that even inherited objects or those purchased primarily for enjoyment now may command substantial sums. Adopting an integrated approach to the art management process can enhance these ever-expanding collections. Some key elements to consider include:
Inventory and Reporting
Christie’s recently brought Andy Warhol’s seminal 1964 silkscreen depicting Marilyn Monroe to auction. Its estimate of $200 million was the highest asking price for any artwork in history. The Wall Street Journal writes that the late dealer whose foundation is offering the piece “helped sell and catalog the official inventory of Warhol’s works” decades ago.
Our Accounting Director Katherine Vaynshteyn observes that accurate inventory and reporting is an essential cornerstone of any art management system. Today’s collectors are able to access a wealth of real-time data which would have been unimaginable in Warhol’s era.
With a few computer keystrokes, we can instantaneously track and report on key information for clients including artist name, appraised value, purchase price, date of acquisition, high-resolution images, item description, location, and provenance. Having an organized, seamless, and secure platform in place to consolidate vital documents can help reduce administrative headaches and enhance a collection’s appeal.
At a humdrum New Orleans estate sale in 2005, lot number 664 carried a paltry estimate of $1,200 to $1,800. The painting ended up being picked up for under $10,000. Its eventual resale price in 2017? $450.3 million. (In the interim, experts authenticated the work as an original Leonardo da Vinci).
An extreme example, undeniably, but it speaks to the importance of having up-to-date valuations and accurate recordkeeping. Expert appraisals are a crucial ingredient in assigning both retail replacement value and fair market value to an artwork.
Surveys show that a majority of art aficionados haven’t submitted their inventory to be professionally appraised. This can prove costly, as properly documenting a collection’s worth is a vital component of charitable giving plans, art financing proposals, and overall tax strategy. Valuation also plays a pivotal role in any art insurance policy.
Insurance and Conservation
The $500 million worth of artworks stolen from Boston’s Isabella Stewart Gardner Museum in 1990 remain sadly unaccounted for over three decades on. The biggest such crime in history included irreplaceable Rembrandts and Vermeers. Adding insult to injury, the institution wasn’t insured against theft. Clearly, having proper insurance is paramount.
Most art losses arise not from cloak and dagger Thomas Crown Affair-type heists, however, but due to other issues including fire, flooding, and accidental damage. (Prominent real estate developer Steve Wynn once disfigured a priceless Picasso by inadvertently putting his elbow through it).
We’ve worked with clients whose artwork adorns the walls of residences on multiple continents, from the heat of Rome to the humidity of Vietnam to the hurricane zone of the Carolinas. Having a disaster plan in place to prevent damage and protect against weather extremes, among other factors, is an essential aspect of collection conservation efforts.
A publicity still for the smash HBO show Succession depicts the family patriarch and his four children standing beside a masterpiece by Rubens. Life indeed often imitates art, as inheritance strategies and estate planning are assuming increased importance in the real world.
The largest wealth transfer in history is rapidly approaching, with WealthX forecasting that ultra-high-net-worth individuals and their families will bequeath a combined $18.2 trillion by 2030. Despite this, research reveals that only a distinct minority of art collectors have formalized their estate documents.1
Geller Advisors’ Head of Wealth Strategy Allen Injijian points out that art embodies a unique confluence of values, namely economic, sentimental, and societal/cultural. Given these complexities, drafting a detailed estate plan, along with comprehensive tax and inheritance strategies, should be at the forefront for families with meaningful art interests. After all, ‘Art is long and life is short’, as they say, and you can’t take it with you.
Logistics: Shipping, Storage, and Framing
Although often overlooked, logistics represent another crucial element of art management. Indeed The New York Times notes that 47% of all art loss derives from damage during transit, so this consideration can’t be neglected. Where applicable, collectors must also consider how best to transport art across borders, satisfy overseas customs requirements, and pay potential excise duties.
As for framing, working with a professional vendor can enhance an artwork’s value by providing protection from harmful dust, dirt, and ultraviolet light.