The art world and the art market have been crying out for ways to expand into larger markets, with the most attention turned towards branding art as a luxury item.

But is this the "brand" to migrate to? If you listen to our podcast (linked below) with Shelby Myers, Global Head of Private Sales with RM Sotheby’s (the world’s leading auction house for cars) maybe that is NOT the solution.

To draw a parallel with the fashion industry, a designer’s money-draining haute couture collection is often supplemented by a line of perfumes or some other product—but what would be the art world equivalent? Auction houses are alone in their ability to service a wide range of markets, but resist trying to re-position art as a luxury product.

The approximate number of works the billionaire investor and Old Master collector Thomas Kaplan is looking to fractionalize in a possible IPO of his art holdings, according to a report in The Art Newspaper. The Leiden Collection—assembled by Kaplan and his wife, Daphne, over multiple decades—contains more Rembrandt works (17, to be exact) and more Dutch Golden Age paintings than any other privately owned trove, as well as what is thought to be the final painting by Vermeer.

The art and collectibles markets have had a mercurial relationship with fractional investing, aka the subdivision (strictly on paper—no blades involved!) of alternative physical assets like paintings or classic cars into many tiny shares. In theory, they're a way to diversify a portfolio without the headaches of actually caring for objects. A slew of companies already offers various fractional investing opportunities in art, like Masterworks, Yieldstreet, and Artemundi. But the road to carve up and democratize the trade of passion assets is littered with corpses, too; the list of dead startups in the field includes Rares, Otis, Collectable, Dibbs, Koia, and more.

An IPO of the Leiden Collection also typifies the art market’s great Gen Z dilemma. Kaplan told TAN that his three children—two of them college-aged—“have no interest in material objects” and “have no idea what to do with” their parents’ art holdings. If you’re surprised by their meh reaction to the prospect of inheriting the world’s definitive private collection of Rembrandts, you haven’t been clocking zoomers’ widespread hesitance around collecting classic blue chip art, particularly at the ever-escalating prices their predecessors expected. Now the younger Kaplans’ loss might only be the elders’ gain if the masses intervene.

—Tim Schneider / The Gray Market

Billy from NYC ASKed: I'm inheriting a group of paintings from my parents. What should I do, what are they worth, and should I sell them?

No Reserve: Well not many collections are worth tens, if not hundreds, of million dollars (though some are, as noted above) —so if yours is not one of those, then ideally you would have asked them in their estate planning process for information like appraisals, etc—but if you hadn't, for a variety of reasons, you will have to get one. Remember that pretending it was you who owned them the entire time, rather than your parents, to avoid estate taxes is a very, very risky choice.

Auction houses are usually the best for a first opinion on value—and if you plan to sell, you can get a better deal. These appraisals used to be free, but are less so these days. Auction houses tend to be the place for liquidation at any price.

Private appraisers—whose rates could start at $5,000-25,000 and beyond—provide a broader view of the value beyond auctions.

Pick a few pieces you love, and keep them—their sentimental value may exceed their monetary value. And, from a professional view, do not rule out hiring your parents’ art advisors as your advisors. Yes, there may be a bit of jealousy over the time your parents spent away from you to go see art, but they know the works the best.

And, what a lucky problem! Some collectors who started 40-50 years ago never expected their art to be such a significant part of their net worth.

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