Deloitte Art & Finance Conference (Armory Week 2017) — Panel Recap
On March 2nd, Arthena’s founder and CEO, Madelaine D’Angelo, was a panelist at Deloitte’s 2nd US Art & Finance Conference that was held at The Armory Show 2017. Steven Halliwell (Collector’s Fund), Christine Bourron (Pi-eX), and moderator Michael Goss (Sotheby’s) joined D’Angelo in the “Innovations in Art Investing” panel. Here is the run-down of the discussion:
Pi-eX’s mission is to “enable investors to easily diversify and hedge their investment portfolio in Fine Art.” — catering to clients who want to hedge risk and hold a short term position in the art market. Bourron saw a problem and opportunity in the art market — a bridge to meld the gap between the art market and investors. Her company built a new financial instrument as she saw the lack of hedging instruments available to investors interested in investing in the art market.
Bourron also discussed the difficulties of being an entrepreneur, emphasizing the need for time to allow fruition. Nonetheless, she’s well aware of the effects of globalization and its effect on the growing art market. She believes that financial instruments in general will help aid the growth while giving liquidity in the art market.
Halliwell from Collector’s Fund saw the opportunity to combine the worlds of fractional ownership and art experience, in which investors would own a percentage of the fund’s portfolio while having the opportunity of appreciating the acquired art pieces in their own homes. He stresses the importance of portfolio diversification especially into the collectibles market, and that investors should not be intimidated or apprehensive of the art market as it is a neutral playing field for investors.
Halliwell also notes that the art market currently lies between 65 to 75 billion USD. In this time and age, people are quickly and easily obtaining information, and thus, there is “enough standardization and prediction to allow people to come in [to the art market]”. He believes now is the time to get more people involved with experiencing art.
D’Angelo on the other hand, wants to see more volume in the art market in terms of participants, transactions, and capital. She initially built Arthena’s funds based on the crowdfunding model to determine market demand and the approach of a potential investor. Learning from this model has led her to steer Arthena towards a more quantitative approach through building investment products, which will help drive investor confidence in the art market.
D’Angelo also believes that connoisseurship is as important as using data when determining acquisitions in the art market, as there is “no substitute for human intelligence, especially in art”. Therefore, despite determining acquisitions by mathematical regression models, her company still uses a close network of advisors for due diligence before making any purchases.
This was the primary takeaway of the panel. The art world has more and more access to data that allows for accurate decision making, but human intelligence fills in any gaps that data cannot cover. Additionally, financial products for the art market can help investors diversify their portfolios and understand art as an asset.
