Ramping up the race to apply the power of big data to the art trade, the German-owned online price database and auctioneer Artnet has acquired Tutela Capital SA, a boutique analytics firm co-founded by the former trader Fabien Bocart, for an undisclosed sum.
Tutela specialises in quantitative art market analyses, intelligent algorithms, and high-frequency price indices, and since its founding in 2011, has valued for more than $2bn. The acquisition—not long after Sotheby’s announced it had purchased the Mei Moses Art Indices—brings Tutela’s proprietary technologies and Bocart into the Artnet fold, which includes a database of auction results from the past 30 years, a news site, and an online auction platform.
“This seemed to be a natural supplement and evolution of the price database”, which has 75,000 subscribers, Artnet’s founder Hans Neuendorf tells The Art Newspaper. “When we first tried this, 15 years ago, we couldn’t find a data specialist who had knowledge of art. It was a reasonable price, after having tried for many years to find the right person to do this.”
With Tutela, Bocart—a former interest rate options trader at BNP Paribas Fortis—has focused on tracking and quantifying the movement of artworks in order to develop price indices and predictive modeling. Notably, Tutela offers an internationally recognised valuation for works of art (known as a Fair Value Measurement, or IFRS 13), enabling entities like banks and hedge funds to leverage art while conforming to regulatory demands for disclosure.
While interest in art as an alternative investment vehicle has been rising for the past decade, the first wave of attempts to “financialise” the market “did not show a good understanding of art as an asset class”, Bocart says. “The biggest misconception was that you can buy an artwork and sell it back as a security—which makes no sense from an art market perspective, because most dealers try to buy at a fair or low price and realise their profit when they buy, not necessarily when they sell… Our metrics take those constraints into account.”
With his technologies, Bocart hopes to address two basic issues in the art market. First, to improve the accessibility of objective information available to would-be buyers, and second, to level out what he sees as the art market’s major asymmetry: global art sales totaling some $60bn versus a potential value he estimates at $1tr. “What we want to do is to provide the right information to stimulate that market, to help push margins lower and to give banks, hedge funds and investors access to a market [that is] in a similar position as the real estate market was in the 1980 and 90s”—that is, primed for investment.
Some doubt whether the art market can be “disrupted” in the manner of other markets. Both Bocart and Neuendorf cautioned against blind reliance on raw data without the involvement of art specialists. “The art market it is a very old and very sophisticated market”, notes Bocart. “But given proper supervision and proper tools, I think wonderful things will happen.”
• For more on how big data is poised to change the art market, see our December print edition.