During the second half of July, anyone with a few hundred dollars to spare can purchase a share of a Francis Bacon masterpiece, “Three Studies for a Portrait of George Dyer,” completed in 1963. The triptych becomes the world’s first painting to be completed at the public went.
Eric Beiley Part II: Where Interest is Going
And then it goes to the public – to an as yet undetermined museum, where thousands of people can marvel at a canvas that has often hung on the walls Private collectors like Roald Dahl.
In the IPO, which is being conducted by a company called Artex, “Three Studies” will be listed on a specially designed list Art exchange based in Liechtenstein. The listing is valued at approximately $55 million; the painting last sold at Christie’s auction in 2017, for nearly $52 million.
After this sale at Christie’s, the painting ended up in a private collection – which is the fate of many, many works of art. Artex’s decision to publicly display its listed works is a boon for art lovers, who can see paintings and sculptures that have previously been difficult to access – and also for the museums that will house those works.
How does an art IPO actually work?
In many ways, an IPO of a painting works the same way B. the IPO of a company. Artex is currently offering 385,000 shares of the painting (priced at US$100 each) to investors through brokers and banks, representing 70% of all Class B shares in the painting. Retail trading will begin in late July and the price of the shares will fluctuate based on supply and demand, just like in the case of Apple or IBM shares.
But while a company’s stock price goes up or down depending on how well it’s doing — how many phones it makes, for example, or how its earnings compare to its losses — a painting doesn’t perform in the same way. In fact, the value of a rare masterpiece increases year after year, if at all. It just needs to be hung on the wall and not damaged.
Given this, why would retail demand for shares in a Bacon triptych rise or fall significantly at all? One scenario is the possibility of a “takeover bid”. As in the corporate world, if a private collector really wants to own the bacon and is willing to buy out all the shareholders at a premium, the stock price will go up. On the other hand, if an art expert declares the bacon to be a fake, the share price stagnates. This is a peculiarity that only applies to works of art; However, their corporate equivalent might be an auditor announcing that a company has cleaned up its books.
How much art do private collectors own?
It’s hard to say how much of the world’s art collection is privately owned, but it’s safe to say it’s significant. Larry’s List, which compiles data on the art industry, In 2015 it was estimated that 53% Private collections each included more than 500 works of art. There are at least 8,000 art collectors around the world, maybe even up to 10,000.
Many of these holdings are hidden from the public, mostly in “free ports” — untaxed havens in various countries where the wealthy set up businesses and store their wealthy goods. Economist estimates that the free ports in Zurich and Geneva store “paintings, sculptures, gold, carpets and other objects worth over 10 billion US dollars”.
Private collections probably include works by Vermeer, Rembrandt and Picasso that did not yet exist seen since they were stolen. But this also includes thousands of others that were lawfully acquired for private consumption. If the price is right, these collectors may sell to Artex, which only charges a fee of 3% of exchange proceeds, instead of the 20% commission that leading auctioneers charge. And then those works end up in museums where the rest of us can finally enjoy them.
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