The responses were mixed when Adams posed the question: “Is art now securely established as an asset class?” For Deitch, the answer was a firm yes. He said the key indicator that places art alongside more traditional asset classes, such as stocks and bonds, is the ability to borrow against it. “It’s proven to be a very, very solid asset,” he said. Danese agreed, citing a constant rate of return somewhere in the 12–15% range.
Schindler pushed back on the classification, however. “To my mind, while art is a valuable asset, to me it’s not quite there yet,” said the lawyer. He noted that stocks and bonds tend to perform consistently in response to changing economic conditions, while fluctuations in the value of art are less consistently tied to macroeconomic forces. “Partly it’s the transparency thing, partly it’s the idiosyncratic nature of the thing, but it doesn’t seem to rise to the same level of predictability as these same asset categories,” he said.
Danese countered, noting that the rise and fall of stock prices can also be notoriously unpredictable, and that if someone were able to amass a large and varied enough art collection, its value would stay more consistent. “It’s an asset class in its infancy, if you will,” he said.
Either way, the art market’s financialization is increasing transparency.