Sufficiently robust transaction data and analytic frameworks exist to
define comprehensively the financial risks of individual works of art (or
antiques), of schools of artists, and of diverse collections. It is now
possible for bankers, asset fund managers, auctioneers, and other
financial intermediaries, to define, monitor, and manage their portfolios
of risk.
Proprietary microeconomic research and mathematic tools lie at the
heart of this analytic capability and are then aligned with other
relevant inputs. As a cursory example of some risk factors, consider the
following:
Microeconomic Facts:
Since the art sector is affected by deep information asymmetries and
persistent opacity, elements as simple as the average selling price and
the overall rate of "buy-ins" become factors of risk.
French Impressionist Paintings
Kusin Classification Code #s 001.001.003.002
Between the start of January 1985 and the end of September 2001, 4,243
fully attributed paintings by 16 French Impressionists were offered for
sale at 130 different auction venues.
30% of the lots offered for sale failed to find buyers, or were
"bought in," to use the parlance of auctions. Measured by value, 15.6%
of the works offered at auction was bought in. The average nominal sale
price during the period was $769,582.
Dutch Old Master Paintings
Kusin Classification Code #s 001.001.009.004.001
Between the start of January 1988 and the end of September 2001, 9,486
fully attributed paintings by 219 Dutch Old Master artists were sold at
230 different auction venues.
Of all the lots offered, 41% failed to sell. Measured by value, the buy-ins
were 24.3% of that offered for sale. The average nominal sale price during
the period was $58,662.
Eighteenth Century Case Furniture and Seating
Kusin Classification Code #s
American Furniture 002.001.001.001.001
English Furniture 002.001.002.001.001
French Furniture 002.001.003.001.001
Between the start of January 1988 and the end of 2000, 2,096 fully attributed English,
French and American examples of case furniture and seating were offered for sale at 42
different auction venues. Each of the works had been built by a named craftsman or a
distinctive regional school between approximately 1750 and 1800.
20.3% of the lots offered for sale failed to find buyers. Measured by
value, 9.6% of the value offered at auction was bought in. The average nominal sale
price during the period was $54,070.
Kusin and Company
Public Commentary