Introduction

For centuries, the art market focused solely on what we now refer to as Old Masters works. These pieces were highly desirable and provided the foundation for many of the world’s greatest museums, including the Uffizi Gallery in Florence and the Louvre in Paris. They were also the most desired era for some of the world’s greatest collectors such as Henry Clay Frick, J.P. Morgan, and the Princely Family of Liechtenstein. However, as time passed, new artistic styles were created and the tastes of the art world changed. Impressionism, which emerged in the late 19th century, quickly became the darling style of the market. Subsequently, Pop Art and Abstract Expressionism further displaced Old Masters works from its market apex.

What are "Old Masters"?

The bracket of art known as “Old Masters” refers to a category of art produced in Europe during the Renaissance period (1300-1600)  until around 1800. These works are some of the most notable, influential and recognizable in art history, and are characterized by their technical excellence, attention to detail and vivid realism. Some of the most renowned Old Master artists include Michelangelo, Caravaggio, Rembrandt and Leonardo da Vinci. The subject matter varies from portraiture to landscapes to religious and mythological scenes. These works continue to be highly admired by collectors and academics alike for their historical significance and aesthetic beauty.

The Market for "Old Masters"

To be clear, Old Masters works can still rake in large sums at auction and in private sales. In 1989, Pontormo’s Portrait of a Halberdier sold at Christie’s for $35.2 million, the equivalent of $84.9 million in 2023. Even more recently Salvator Mundi, a work attributed to Leonardo da Vinci, sold at Christie’s in 2017 for $450 million. These are enormous sums of money, and represent significant returns for their respective sellers, however these should be considered outliers as their sale prices are in the top 0.01%.

The shifting tastes of the art world have had meaningful ripple effects in the art marketplace. In the 1970s, Old Masters works were undoubtedly the dominant artistic category at auction. Today, it represents just 4% of auction and private sales at Christie’s and Sotheby’s according to their own press offices. Consumer enthusiasm has precipitously decreased, as have the prices. Even works by remarkable and recognizable artists have failed to reach their estimated prices in recent years, such as Titian’s Portrait of a Venetian Admiral which failed to meet its reserve price at Sotheby’s in 2017, and El Greco’s Portrait of a Bearded Man which failed to meet its reserve price at Christie’s in 2021.

Recent Auction Performance

We monitored the performance of twenty-one lots at a recent auction of Old Masters works at Christie’s, and the performance was not only reflective of a temporary lull in the art market, but a broader lack of market enthusiasm for Old Masters. Each of the twenty-one lots we looked at were produced between 1590 and 1815 and had public records of historical sales.

For example, take a work by Ary de Vois entitled “Portrait of the Artist, Half-Length, Holding a Fob Watch.” This work sold on November 6th 1863 in Baltimore for $153. On January 24 2023, some 159 years later, it sold for $69,300. That represents a 45,194.1% sale-to-sale return, which on its face seems incredible. However, it only represents a 3.91% compound annual growth rate or CAGR, which is inferior not only to other types of investments such as residential real estate (10.6%) and stocks (9.8%), but to other eras of art such as Contemporary which has returned an average of 7.5%. The de Vois work was in no way an anomalous example, in fact it outperformed the average 1.25% CAGR from a previous sale across all twenty-one lots. Furthermore, eight of the twenty-one lots we tracked sold at a lower price compared to a previous sale price for the same work, five of which sold for less than half of their previous sale. This is a stark contrast to the dynamics that we often see play out in post-war and contemporary works. While 21 lots is undoubtedly a small sample size, the results are reflective of how the market for Old Masters has performed in recent years.

The Future of "Old Masters"

The current hardships experienced by the Old Masters market should not be seen as a death sentence, as there is still a case for high returns for works in this category. While the broad performance is poor compared to later eras, art investing is more akin to betting on horses than it is to buying a sector ETF, and there are always outliers. It is possible that Old Masters will see a resurgence in popularity. As contemporary art becomes increasingly commercial, a return of tastes to artistic traditionalism is not outside the realm of possibility. Also worth noting is the influence that works and artists from the Old Masters era have influenced later works. Francis Bacon was clearly influenced by Diego Velazquez, as was Andy Warhol by Leonardo da Vinci and Jeff Koons by Giotto and Titian. Regardless of market taste, significant works from this era are forever included in art history and will likely never see their value dissipate. Ultimately, the investment quality of an Old Masters work should be assessed on a case-by-case basis, as is true with any era of art. However it is clear that the volume of market participants and dollars deployed has shifted away from this category of work.

Conclusion

The Old Masters market has experienced a significant decline in popularity in recent decades, as the art world’s tastes have shifted from traditionalism toward contemporaneity. While the poor performance of Old Masters works compared to other eras of art should not be ignored, the performance of the era is not indicative of every work internal to that category. As such, the investment quality of any work should be assessed on a case-by-case basis, considering its aesthetic appeal, historical significance, and provenance among other attributes. That said, while no era or bracket of art guarantees financial upside, it is safe to say that Old Masters lacks the investment profile that Post-War, Modern and Contemporary works do. Despite the challenges faced by the Old Masters market, it remains an important part of art history, and the beauty and technical skill of these works continue to captivate audiences globally.