Lot-Art CEO Francesco Gibbi Discusses Art as a Financial Investment

James Ardis
Published on

“Art investment is a synergy between passion and finance,” says Mr. Gibbi

Francesco Gibbi at the 2018 Venice Film Festival.
Francesco Gibbi at the 2018 Venice Film Festival.

Much of Auction Daily’s coverage focuses on the aesthetic value and historical significance of pieces coming to auction. Francesco Gibbi, founder and CEO of Lot Art- The Art Investment Platform, considers another angle: art as a financial investment.

Auction Daily recently spoke with Mr. Gibbi about art as a means to diversify one’s financial portfolio. Readers should always consult with a wealth manager or investment advisor before making such purchasing decisions. However, our editors hope that sharing Mr. Gibbi’s experiences serves as a helpful introduction to the topic.

Mr. Gibbi splits his time between Amsterdam and Milan. He began considering the viability of art as a financial investment after the financial crisis of 2007-2008. At the time, he was investing in the stock exchange and realized he could only “guess the right things to do,” he tells Auction Daily. That’s when he shifted some of his wealth into art-related assets, especially a category he knew well: Neoclassical etchings.

He believes the benefits of investing in works of art include diversifying one’s financial portfolio. “I think diversification is always good to reduce the risk and the volatility,” says Mr. Gibbi. He also contends that works of art are better positioned than other assets to maintain their value or to quickly regain it in the face of macroeconomic factors, such as inflation and forex volatility.

Vedute di Roma (3rd State) by Giovanni Battista Piranesi. Photo from R. S. Johnson Fine Art.
Vedute di Roma (3rd State) by Giovanni Battista Piranesi. Photo from R. S. Johnson Fine Art.

While Mr. Gibbi chose to focus on Neoclassical etchings and Old Masters, he believes any art category can be viable. The most important factor, according to Mr. Gibbi, is that investors know the area well and are dedicated to learning more about it. “When you’re able to leverage your expertise, that’s where you make the best deals,” he says.

For those seeking direction, though, Mr. Gibbi recommends works by Old Masters for less volatility. “Old Masters are like bonds for the financial market,” says Gibbi. “They might yield less, but they’re more stable.” He believes one of the main factors that can change the value of a piece by an Old Master, both in the investor’s favor and against it, is its misattribution by the selling auction house.

The Madonna and Child With an Angel by Giovanni Battista Vanni. Photo from Bonhams.
The Madonna and Child With an Angel by Giovanni Battista Vanni. Photo from Bonhams.

Meanwhile, Mr. Gibbi recommends that investors interested in contemporary art sell those pieces within a few years, marking a five-year turnaround time as a good rule of thumb. He notes that as time passes, it becomes harder to account for the market’s changing tastes. Therefore, a window of five years gives investors time to find the right home for a piece while also being relatively confident that aesthetic tastes have not changed radically enough to affect the value.

While speaking with Mr. Gibbi, Auction Daily was particularly interested in the differences between collectors buying for aesthetic reasons and investors adding a work to their financial portfolio. He argues that there may be more similarities than differences between the two groups. “Art investment is a synergy between passion and finance,” he tells Auction Daily. Mr. Gibbi also believes that auction houses, galleries, and artists all benefit by expanding the appeal of art collecting to investors.

In 2017, Francesco Gibbi founded Lot-Art.com as an art investment platform. The website works to balance collecting for both aesthetic and financial purposes. It also uses its own market analytics to determine which pieces will be a best fit in terms of expected liquidity for an investor interested in diversifying in fine art or luxury collectibles. Interested readers can learn more here.

Photo from Lot-Art.
Photo from Lot-Art.