Art as an asset class has been much in the news in the past week with the revelation that British Airways – beleaguered as it retires its 747 fleet in the wake of the pandemic – is to sell off work from its art collection.
Firstly, who knew that British Airways even had an art collection? Possibly the most famous public commercial investment in art in this country has been the British Rail Pension Fund, which spent generously on art, parting with £40 million (around 3 per cent of its holdings then) between 1974 and the 1990s for around 2400 museum quality works in what was a ground-breaking experiment at the time.
The investment was treated as a hedge against inflation, with the British Rail Pension Fund rivalling the Getty in reputation as a power investor in art.
Thanks to the experiment proving largely successful, many other businesses followed suit, with art becoming seen as a relatively less risky asset class once bonds and gilts took a serious knock in the crash of 2008.
Now BA is looking to offload a wealth of Young Brit art by names like Damien Hirst, Tracey Emin and Anish Kapoor as it looks to build cash reserves. Not only is this a bold move and one that could have repercussions for BA if the sale does not go well, it could also prove a landmark in the long-term fortunes of the leading Young Brits.
With things in the market fast developing, it will be interesting to see whether BA chooses to expose the works in the harsh light of an open auction or look to go the private sale route. Either way, the leading auction houses will be looking to get in on the action, but they will be up against serious competition from increasingly savvy and powerful contemporary art dealers who have already snaffled some tasty prizes from under their noses.
Watch this space.