Art is an asset of passion, not only can it stir the soul, but it can also be an important long-term investment, requires unique planning considerations, and is a powerful portfolio diversifier concerning a traditional investment portfolio of marketable securities. However, investing in art is not for everyone and brings unique challenges and opportunities. To diversify your portfolio with art, you need great advisors, the means to do so, and a passion for finding artwork to add to your collection. Collectors work with museum curators, art gallery dealers, private curators, auction houses, and sometimes directly with artists or their estates to find select artworks in the highest demand.
Recently, a renowned art collector donated a major artist collection to the Seattle Art Museum. This not only provided a valuable collection to SAM but also endowed the collection to have public programming, and traveling exhibitions, and to be cared for in perpetuity.
Another blue-chip art collector amassed a very valuable collection. At one point, the collector sought additional liquidity to fund a substantial commercial real estate project. He approached his financial advisor and was able to secure an art loan to meet a portion of his overall construction
costs. While this facility helped meet his unique needs, it is essential to know the risks before engaging in asset-backed lending. There are unique considerations to using your art collection as collateral including special insurance requirements, potential restrictions on relocating, transporting, storing, or displaying art, and unique loan terms specific to art lending.
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