Turning Art Into a Financial Asset Class

**SPEAKER_1** (0:00)
This episode is brought to you by Charles Schwab. Timing the market, fighting inflation, managing risk? Financial decisions can be tricky. Investing isn't just math, it's psychology. Your neurons are playing favorites, and the market doesn't care. Financial Decoder, an original podcast from Charles Schwab, can help.
Join host Mark Reapy as he breaks down practical strategies to help overcome the mental traps that may affect your investing decisions.
Listen at schwab.com/financialdecoder.

**Ann Berry** (0:30)
For Friday, August 14th, it's Brew Markets Daily, and I'm Ann Berry.
Art, a passion of mine. Whether meandering through museums, gallivanting to galleries, flitting through fairs, or simply scrolling on Instagram, a beautiful painting or photograph never fails to catch my eye. But there's one question I keep coming back to because I just can't help it as an investor. Should art be characterized as an asset class? Is the art market really a market, in the sense that we cover here on the show? And if art's not quite there yet, can it be? Well, to help us answer these questions, we invited onto the show Andrew Wolff, founder and CEO of Beowolff Capital, and now chairman of two of the art world's most prominent digital platforms, Artsy and Artnet. Well, Andrew spent decades as an investor at Goldman Sachs before turning his commercial expertise to the art world, where he sees a massive market that still lacks many of the features we take for granted in traditional financial ones, from liquidity and transparency to real-time data and analytics. His ambition is to build that infrastructure.
Well, we discuss Andrew's quote, tortured journey to acquire Artsy and Artnet, a fun lesson by the way in deal making, his mission to spread the art market's economics beyond a small group of winners, and how his team is developing technology to shake up art discovery, including one fascinating experiment that uses your Spotify listening habits to predict your taste in art. It's a conversation you won't want to miss coming up in just a moment. But first, this episode is brought to you by Charles Schwab. Timing the market, fighting inflation, balancing risk, no one says financial decisions are easy. In fact, it's the exact opposite. Financial decisions can be really tricky, and it's often your own thinking that can lead you astray.
Financial Decoder, an original podcast from Charles Schwab, can help.

**Mark Reapy** (2:18)
Join host Mark Reapy, head of the Schwab Center for Financial Research, as he offers modern strategies to help combat the wait, what? In your head. Mental traps like overconfidence, loss aversion, and recency bias may cloud your investing decisions. When you understand these patterns, you can take steps to make better informed financial decisions.

**Ann Berry** (2:37)
Listen at schwab.com/financialdecoder, or wherever you get your podcasts. That's schwab.com/financialdecoder.
And now my conversation with Andrew Wolff, founder and CEO of Beowolff Capital. Andrew Wolff, founder and CEO of Beowolff Capital, and chair of Artsy and Artnet. Thank you for joining from London. When I saw the news break that your investment firm had bought both Artsy and Artnet, I was super excited to try and unpack with you whether the art market is really a market and what it is that you're doing to turn it into one that has the features that are more recognizable when we think of other financial markets out there. And so to start with figuring that out, I have to ask, you're a star investor, is art an asset class? Do you as an investor consider it an asset class?

**Andrew Wolff** (3:27)
Great question, Ann, and thank you, thank you, Percival, for having me. Super exciting to be here.
It's a great question because a lot of people in the art industry react very poorly to that characterization. And I get it, I understand why. Art should have more meaning than a bond, right? Or a commodity, right? It should have a certain cultural significance that, perhaps if you put dollars and cents right next to it, it degrades that cultural significance and it degrades that meaning and it degrades that storytelling. So I do understand that. That said, a work of art is certainly an asset. A lot of works of art may not be an asset with a lot of value, but they're certainly an asset.
But as an asset class, it's hard to answer that question because, you know what? That for us financial people, and I was a financial person for many years, asset class, there's no strict definition of what that actually means. It's more of a, it's an operational taxonomy that people use, but you can put a lot of different things in that bucket. So art, for example, it's not liquid, right? But there are a lot of alternative asset classes like private credit that aren't liquid either, or didn't used to be liquid.