As war rages across expanding swathes of the Middle East, causing an ever-rising death toll and economic chaos, will the international art trade become one its the many collateral casualties?
Seemingly not. In the first week of March, while US, Israeli and Iranian forces were firing missiles across Southwest Asia, the world’s wealthiest were spending millions on blue-chip art in London. Sotheby’s and Christie’s evening sales of Modern and contemporary art raised £131m and £197m, respectively— increases of 110% and 52% on the houses’ equivalent auctions last spring. Sotheby’s sold all its 54 lots; Christie’s 96% of its 93. Selling rates were bolstered, as usual, by plentiful guarantees and by the judicious last-minute withdrawals of lots that had not attracted enough pre-auction interest.
What was going on? Even seasoned observers were surprised by these seemingly counterintuitive results. “What a week. I was not expecting to see such continued strength,” says Morgan Long, a London-based art adviser. “The old adage of ‘flight to quality’ held true, and people were taking advantage of the great things for sale that week and slightly pushing aside current events,” she adds.
Last month Francis Bacon’s 1972 Self Portrait sold for £16mat Sotheby’s Photo by Rayan Bamhayan; courtesy Sotheby’s
Were these London sales the shape of high-end art auctions to come? It is always unwise to extrapolate general trends from a single season. However, this London offering, with its representative, if mainly Eurocentric mix of Modern and classic contemporary material, did yield some significant pointers to the way this market might be heading.
After a two-year slump, the ultrarich seem to have become more confident about selling their valuable art. “There is a greater volume back in the sales, especially visible in London, which had been somewhat marginalised. There are a greater number of genuinely high-calibre lots at attractive estimates,” says Hugo Nathan, the co-founder of the London-based advisory firm Beaumont Nathan, which was an active bidder and buyer at these auctions. As was the case in New York in November, the presence of prestigious single-owner consignments made a difference. Four paintings owned by the Bahamas-based British billionaire Joe Lewis contributed £35.8m at Sotheby’s, while 31 pieces from the late Belgian collectors Roger and Josette Vanthournout raised £40.3m at Christie’s.
Results like the £16m made at Sotheby’s for Francis Bacon’s 1972 Self Portrait from the Lewis collection, and the record £26.3m given at Christie’s for Henry Moore’s superb sculpture King and Queen (1952-53) grabbed most of the headlines. But arguably far more significant were the unspectacular but solid prices being achieved for less exceptional works by so-called “blue-chip” names.
Take Claude Monet’s pretty but art historically inconsequential 1884 painting of an Italian garden, Maison de jardinier, at Sotheby’s. This was bought by Beaumont Nathan, just above the low estimate, for £8.2m with fees. Around 20 lots later, Jean-Michel Basquiat’s 1986 mixed-media piece, Thin in the Old, sold for £4.5m, well below its low estimate of £6m. Both were unexceptional, if characteristic works by famous artists and both had been acquired by their sellers at auction several years before. The Monet cost £4m in 2007, the Basquiat €3.7m in 2017, according to the Artprice database. Allowing for inflation, these returns were not spectacular, particularly compared with how stocks performed over the same intervening periods. Yet these were art investments that had at least held their value.
Rise of the red chips
The same cannot be said of most of the “red-chip” ultra-contemporary paintings made by young artists under 40 that were making such spectacular prices in salerooms in the immediate aftermath of Covid-19. Artprice reports that in 2025, auction sales of such lots had declined to $48m, down 47% compared with the previous year. In 2022, sales of ultra-contemporary art had reached $306m. According to Artprice, the speculative craze for young painting “appears to have been substantially fuelled by cash previously invested in the post-Covid NFT bubble”.
Admittedly, October’s Frieze Week is traditionally when the major auction houses offer most of their younger art in London, but it was noticeable how these latest evening Modern and contemporary sales were cauterised of works by artists aged under 40. Phillips, whose contemporary auctions had become a byword for speculative young art, did kick off its modest £12.9m sale of 29 lots with the 2023 painting Tyranny of the rational, a typically enigmatic close-up of a man smoking a pipe by the London-based American artist Joseph Yaeger (born 1986), which took £135,450 against a low estimate of £35,000. But that was about it in terms of young art on an evening when a Vilhelm Hammershøi interior and an Andy Warhol Mao silkscreen each fetched the top price of £1.6m (with fees).
“We have a well-documented flight to more blue-chip taste,” says Nathan. If that really is the case, why is it happening? One possible reason could be a realisation among those who can afford to buy such things that art might not be the most reliable speculative investment, but works by the right older blue-chip names can be an extremely useful store of value.
Take the case of the billionaire New York collector Leon Black, the former chief executive of the private equity behemoth Apollo Global Management. Recently released files detailing the activities of the convicted sex offender Jeffrey Epstein reveal that he acted as a legal and financial adviser to Black. In the mid 2010s, Black took out a low-interest $484m art-backed loan with Bank of America, using high-value works by blue-chip artists such as Degas, Picasso and Cézanne as collateral.
“Borrowing has gained popularity with the ultrawealthy,” according to The Wall Street Journal, which points out that Black’s seven homes, 11 cars, yacht and private jet are expensive to run. “Tapping loans for their expenses can come with big tax advantages, allowing them to avoid incurring capital-gains taxes by selling holdings,” the newspaper adds. In other words, if you’re a billionaire, blue-chip art can be a handy, tax-efficient cash machine.
Art as security
The data analytics of the art market indicate that in broad, inflation-adjusted terms, global sales have either been stagnating or declining since the financial boom of 2007. But art-related finance is expanding. According to Deloitte’s 2025 Art & Finance Report, the market for loans secured by art and collectables was projected to climb to an estimated $33.9bn to $40bn in 2025, enjoying “solid average growth of 10%” per annum as “the art market softens”. The market comprises loans made by the big private banks based on a basket of assets that include art, as well as loans exclusively backed by art made by smaller specialist lenders such as Sotheby’s, Christie’s and The Fine Art Group. Most of these loans are used to invest in other businesses, according to Deloitte.
“Art is a store of value. It’s not really a speculative investment, though some people are really good at making money out of art,” says Harco van den Oever, the founder of the London-based company Overstone, which focuses on offering AI-driven tools that allow institutional investors to accurately evaluate the risks involved in underwriting art-based assets. “Institutional investors are getting more interested in this risk,” he adds. “Art is becoming like other asset classes. That’s a big change.”
This institutional interest is presumably encouraged by an awareness that, during the so-called Great Wealth Transfer, 1.2 million individuals will hand down around $31 trillion of assets to their heirs over the next decade. Just over 10% of the value of those assets will be made up of art and collectables, the Deloitte report estimates.
This process is the main driver of whatever growth there is in the auction market for art. If works are not being entered from deceased collectors’ estates, others will be offered by living collectors as part of their forward-looking estate planning. Christie’s marquee New York sales in May will reportedly include blue-chip gems from the estate of S.I. Newhouse, estimated at $450m. Sotheby’s will offer the collection of the late Robert Mnuchin, valued at $130m, including a Rothko, estimated at $100m.
If London’s March auctions were anything to go by, the world’s ultrarich will not be too bothered in New York in May if war is being waged in the Middle East or elsewhere. Desirable works by trophy names such Pollock, Picasso, Brâncuși and Rothko will make huge prices.
But if more and more money is invested in the relatively safe bet of blue-chip 20th-century art, and more and more buying is influenced by the AI-driven evaluation of financial risk, where will that leave the art of today? After all, isn’t good art meant to be about risk?
