Art as Passion and Store of Value
Collectors now report a fifth of their wealth in art, rising to 28% above $50 million. The returns literature is considerably less enthusiastic than the sales literature, and the gap between them is worth understanding before the next fair.
Two claims are made about art at this level and they are usually made in the same sentence. The first is that you should buy what you love. The second is that it holds its value. Both can be true, but they are supported by very different quality of evidence, and the second one deserves more scepticism than it normally receives at a fair.
What collectors say they hold
The Art Basel and UBS collecting survey put the share of wealth allocated to art at 20% in 2025, up from 15% the year before, and at 28% among those with over $50 million in assets. Time in the market matters: 16% for people collecting two years, 24% at twenty years or more. Average spend was $438,990 across fourteen works.
One qualification has to travel with those numbers. They are self-reported by people screened as active art buyers. They are not a measure of what wealthy people in general hold in art, and they are not comparable with a wealth manager's portfolio allocation. "The rich hold a fifth of their wealth in art" is a misreading of a survey of collectors.
What the returns research shows
The bullish figures are Citi's: 8.3% annualised across all art from 1985 to 2020, 11.5% for contemporary, 6.8% for Impressionist, and a correlation with developed-market equities of 0.12. Citi's own Sharpe ratios ranged from 0.49 for post-war and contemporary down to −0.24 for Old Masters. That work is from December 2020 and uses Citi's own index construction.
The correction is academic and it is substantial. Korteweg, Kräussl and Verwijmeren, in the Review of Financial Studies in 2016, took 32,928 paintings that sold repeatedly between 1960 and 2013 and corrected for the fact that owners choose when to sell. That single adjustment cut the measured annual return from 8.7% to 6.3%, and the Sharpe ratio to about 0.11 — comfortably below equities on a risk-adjusted basis.
Art indices measure the works people chose to bring to market. The ones that did not appreciate were never offered, so they never entered the index and never left it.
Three problems sit underneath every art index and none of them is fixable. Selection: works come to market when they have risen. Survivorship: artists who fall out of fashion stop being offered and simply vanish from the series. Costs and yield: index returns are gross of buyer's premium, seller's commission, insurance, storage, conservation and transport, and art pays no income at all.
The market that produced 2025
Global sales reached $59.6 billion in 2025, up 4% after two years of decline and still below the 2022 peak. But the recovery was entirely at the top: lots over $1 million rose 21% by value and lots over $10 million rose 30%, while lots under $50,000 fell 2% in both value and volume. All ten of the year's highest-priced lots sold in New York.
Online sales fell to $9.2 billion, the lowest since 2019. High-value buying went back into the room.
The tell in the lending data
If you want to know what art is worth as collateral rather than as an idea, look at who lends against it and on what terms. The art-backed loan market ran at roughly $34 to $40 billion in 2025 per the Deloitte and ArtTactic report, and 50% loan-to-value is the working ceiling at both the specialist lenders and the private banks.
The more interesting number is the credit performance. Half of non-bank art lenders reported loan defaults in 2024, up from 17% two years earlier. Among the 65 private banks surveyed, defaults were zero. The difference is not the art; it is who the borrower was and what else secured the loan.
What follows from all of this
Buy what you want to live with, and price the enjoyment as the return, because on the corrected numbers it may be most of it. Treat a 50% loan-to-value ceiling as the market's own honest opinion of liquidity. And be sceptical of any comparison of art against equities produced by a firm that sells fractional interests in art.
The Greek material is a separate question with different mechanics, and collecting Greek carries a legal regime that has no equivalent elsewhere.
Sources
- Art Basel and UBS Survey of Global Collecting 2025, October 2025 — allocation to art
- The Art Basel and UBS Global Art Market Report 2026 — 2025 sales and the top-end concentration
- Korteweg, Kräussl and Verwijmeren, "Does It Pay to Invest in Art?", Review of Financial Studies 29(4), April 2016
- Citi Private Bank, Global Art Market Disruption, December 2020
- Deloitte Private and ArtTactic, Art and Finance Report 2025, November 2025
- Sotheby's Financial Services: loan sizes and loan-to-value
