Stock Exchange for Art ( Art Exchange)!

Firm will sell shares in works held by participating galleries

PARIS. As the notion of art as an asset gains momentum again, the first stock exchange for art—on which clients can buy shares in works from galleries—is due to launch in Paris "in the next few days" according to its website. Based on a stock market model, Art Exchange will offer collectors the chance jointly to own works of art with shares available from between €10 and €100. Participating galleries are currently selling works valued at €100,000 or more, although the exchange intends to lower this figure once the company is established. “Given that we are doing something new, we had to create confidence and credibility in the investor and this is done through having high-class art works,” said Caroline Mat­thews, the director of operations at Art Exchange. Matthews also hopes the calibre of works available will encourage naysayers to invest through the exchange. “For some people, mixing fine art and finance goes against their principles, but perhaps they will see things differently in the future,” she said.

In return for a 5% commission, the exchange has the exclusive right to sell shares in a work over a period of three to six months, but if it does not sell 20% of shares within six months, the gallery recuperates what has already been sold and retains the work of art. If one collector amasses 80% of shares in a work, they have the option to buy it outright and remove the work from the exchange. Currently around half-a-dozen Parisian galleries are participating, but Matthews also wants to enter the US, UK and Chinese markets. The exchange is initially offering six works—about which it is very secretive—but these include a Mike Kelley installation valued at $1m offered by Galerie Hussenot, a work by Sol LeWitt—Irregular Form, 1998—from Yvon Lambert and a large sculpture by Richard Texier offered directly by the artist.

Galleries can opt to keep the works while they are on the exchange, provided they agree to exhibit them, or Art Exchange can take charge of the works with the intention of loaning them to other institutions for display. The exchange also wants to open a gallery within six to nine months.

Art Exchange says it will be completely transparent, with potential investors able to watch the price of shares fluctuate at www.aexchange.net. It is aimed at a number of different in­vestors, according to co-founder Pierre Naquin: “We are targeting clients who are used to investing in Sicavs [collective investment schemes] or blue-chip stocks, people who are looking for tax exemptions [in France works of art are exempt from the solidarity tax on wealth], as well as banks and funds who seek to invest large sums in a variety of different assets,” he says.

But the question remains as to why a gallery would use an intermediary exchange when it can directly sell works without difficulty. “This may sound Utopian but we’re hoping to inspire people to become collectors,” says Olivier Belot, the director of Yvon Lambert gallery. “We’ve opted to be involved only where the works are owned by the gallery, which is more respectful towards the artists. We’re not involving them in any risk.”

Naquin suggests the exchange will bring a new and much-needed type of collector out of the woodwork. “Galleries can test the system with very little risk,” he says. “By providing a considerably more stable public index for each work [compared with auctions], the exchange is also a much easier way for galleries to justify the price of their art.”

Patrick Bourne, the managing director of the Fine Art Society in London, remains sceptical, although he admitted that the investment potential of art can’t be ignored. “I think it’s a stinker. But, while we don’t like the idea of looking at art as an investment, as prices get higher people have to think about it,” he says. “But financial investment is only a part of it, there has to be some sort of emotional investment as well. We like to get works into proper collections for the right reasons.”