The announcement surprised everyone: American art collector Thomas Kaplan, owner of the Leiden Collection – the world’s largest private collection of 17th-century Dutch art – plans to sell parts of his collection. Not the paintings themselves, however, but a virtual stake in them. In the case of Rembrandt, there should be enough stock that even people with modest budgets could buy.
Kaplan explained, “I think the best way to promote a Rembrandt is to give millions, perhaps millions, of ordinary people the opportunity to own a Rembrandt.” art newspaperThis begs the question: what does “ownership” actually mean in this context?
Art as an investment – and a story
People buy art for all kinds of reasons. Many collectors want a personal connection with the work they buy – to live with it, to look at it, perhaps to lend it for exhibitions. Others view art as an investment with a view to eventually earning money from resale, which does not necessarily exclude genuine interest in art.
Blockchain technology has opened up new ways to own and trade art. Digital platforms now make it possible to divide artworks into virtual parts that can be bought and sold individually – a concept known as “fractional ownership”.
In the case of the Leiden collection, what is being divided is not the artwork but the ownership. No single investor has an exclusive corner of the canvas; Rather, everyone together owns the whole. Kaplan has already announced his intention to keep a majority stake so that he can continue to lend collections to museums.
This means, in theory, thousands of people could one day own pieces of Rembrandt’s legacy – possibly without even seeing the originals. For individual investors, the value will lie partly in the hope that the value of their shares will increase, and partly in the appeal of telling the undeniable story of such an investment.
The myth of the ‘democratic’ art market
As wonderful as it may sound, Dirk Boll, art market expert at Christie’s auction house, does not see fractional ownership revolutionizing the art market – even as more platforms begin to offer such investments. He says the whole enterprise is very complex. After all, KIND is not an easy asset class. This comes with unavoidable high costs – insurance, special storage conditions, preservation, etc.
Of course, investors expect returns, which in a shared ownership structure typically come in two ways. “You either have to resell the work at a profit or you have to develop a secondary market for the share certificates. And both are very complex matters,” Boll told DW. However, secondary trading – in other words, reselling shares – often fails because there are more certificates than there is demand.
As for the oft-repeated claim that fractional ownership “democratizes” the art market, Bol disagrees. “It’s a nice slogan, but the art market is as democratic as the car market,” he says. “You can buy any car you can afford. Depending on your budget, it’s either a VW Polo or a Mercedes S-Class. It’s a commercial, economical system.”
Still, Bol believes, shared ownership could make highly valued works accessible to more people – as was the case with Rembrandt. “We’re seeing shared ownership in many other areas,” he says, comparing it to car-sharing or co-owned vacation homes. And it’s hard to deny that ventures like Kaplan’s could spark broader public interest in Rembrandt’s art, he added.
New possibilities for inheritance
For Kaplan, dividing his collection of more than 200 pieces is also a practical solution to a personal problem: what to do with the Leiden collection after he is gone. He said art newspaper While his three children admire the collection he and his wife have built, they don’t know what to do with it someday. Therefore he has asked them to find a solution for their future.
In fact, art market expert Boll says it can be an interesting way to put together a collection. In the art world, there are many cases in which, for example, parts of a collection are sold to cover the costs arising from inheritance. “This is naturally one of the basic functions of the art market,” he said – “to liquidate property, at least partially, to raise money to pay taxes.” Fractional ownership may offer a solution to this: the necessary funds can be generated by selling share certificates instead.
The share certificates for the Leiden Collection are not yet on the market, and it remains to be seen how they will be obtained. However, one thing seems to be certain: At a dinner party, it’s hard to top the line, “I bought a real Rembrandt yesterday!”
This article was originally written in German.