Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. Because indeed Carol Master along
Speaker 1: with Jason Kelly and our Bloomberg Interactive Broker studios. So
Speaker 1: it's always good to get a longer term perspective on
Speaker 1: a market, which is what we're doing today. This time around,
Speaker 1: it's the art market back with us as Jacob Pops
Speaker 1: he is CEO at art Net. It's an art database
Speaker 1: at track sales in the secondary market. He joins us
Speaker 1: to talk about the firm's Intelligent Report, which looks at
Speaker 1: changes in the art market of the past three decades.
Speaker 1: He's back in our Bloomberg Interactive Broker studio. Welcome back, Well,
Speaker 1: thank you. Thanks kind of wrap up our day. It's
Speaker 1: been chuck full of news. Tell us little bit about
Speaker 1: the art market, because Jason I spent a lot of
Speaker 1: time I feel like talking about alternative assets and certainly
Speaker 1: the art market is part of it. What are you
Speaker 1: seeing in terms of a longer perspective about what's been
Speaker 1: going on there and in terms of valuations and and trends.
Speaker 1: Yeah sure, um, yeah, and all report we're looking back
Speaker 1: at thirty years in the market. And it's actually the
Speaker 1: time when we started the company, and the market has
Speaker 1: completely changed since then, I think. Um, you know, now
Speaker 1: we had over sixty billion and in total art sold
Speaker 1: per year, and back in the day it was one
Speaker 1: one six of that. So the market has grown a lot. Um.
Speaker 1: We have given the market transparency, We've introduced you know,
Speaker 1: the art the database um as we have discussed last
Speaker 1: time also and m and given the market access to
Speaker 1: price and that helped, you know, the market grow. How
Speaker 1: is that transparency changed the market there? Um? Yeah, Well
Speaker 1: you have to you have to imagine, you know, someone
Speaker 1: wanting to buy a piece of art in nine and
Speaker 1: you know he had to rely on you know, the
Speaker 1: people selling selling it to him, or you know, on
Speaker 1: friends and can I trust them exactly? So it's it's
Speaker 1: it's been very, very complicated and and you had actually
Speaker 1: people profiting from from that in transparency, you know. And yeah,
Speaker 1: and so you know, giving people access to data is essential,
Speaker 1: you know, for any market to grow. And so when
Speaker 1: you think about especially over the last thirty years, it's
Speaker 1: safe to say the contemporary art world has radically changed.
Speaker 1: The values placed on contemporary artists, which the Born Post
Speaker 1: ninety five. Is that how you uh, sort of how
Speaker 1: do you define the contemporary art market? Do I have
Speaker 1: that right? Yeah, that's have that very right, and it's
Speaker 1: it's it's a it's a very good point. Um. You know,
Speaker 1: the contemporary market has totally exploded and um and and
Speaker 1: it's been driving the entire market a little bit. And
Speaker 1: in the last thirty years. And you know, in nineteen nine,
Speaker 1: auction halls has didn't even so contemporary are that notched it?
Speaker 1: That was what what galleries did and you know they
Speaker 1: only recently started doing that. And you know that has
Speaker 1: really completely transformed to market. And why why was that?
Speaker 1: I mean, what what accounts for that change? Because I
Speaker 1: think when you say it, it's obvious, and yet the
Speaker 1: catalyst is not obvious. What was it? Well, you know,
Speaker 1: traditionally galleries are you know, it's it's it's sort of
Speaker 1: their job to discover artists and you know, and to
Speaker 1: manage their careers and and and to make sure that
Speaker 1: they become popular. And you know, auction hallses, you know,
Speaker 1: typically come in once once you know, they have a market,
Speaker 1: and you know, and the contemporary market is the market
Speaker 1: that really has a lot of potential and you know
Speaker 1: where you see tremendous growth rates, and you know, and
Speaker 1: and and that's why the auction hall is of course
Speaker 1: are interested in it. When it comes to growth, if
Speaker 1: you look around the world, I mean, I'm assuming it
Speaker 1: follows the trends where there's wealth creation because I think
Speaker 1: about how, um, the Asian countries and the Asian markets
Speaker 1: have become much more involved in the art markets. I
Speaker 1: think about China, right, we do stories day in and
Speaker 1: day out about you know, millionaires and billionaires being minted
Speaker 1: over in China as that economy has become much more
Speaker 1: of a capitalistic and and developed economy. So I'm curious
Speaker 1: what you've seen in terms of who are the buyers
Speaker 1: where the market, the art market in particular, is really
Speaker 1: seeing some significant growth. Yeah, sure, it's a it's a
Speaker 1: good question. Um, the US is the market leader, has
Speaker 1: always been number one. Yes, Um, China is number two.
Speaker 1: Third is the UK and together they make around seventy
Speaker 1: of the total market. And yeah, China particularly was very
Speaker 1: very has been very very interesting. You know, if we've
Speaker 1: seen a lot of growth until about two thousand fourteen,
Speaker 1: and you know, and since then a little bit of decline,
Speaker 1: you know, when you know, the government cracked down on corruption.
Speaker 1: So the middle of the middle market has disappeared a
Speaker 1: little bit, but you know, in the in the top segment,
Speaker 1: we even in China still see a lot of demand.
Speaker 1: What's also interesting is that China is more and more
Speaker 1: interested in Western art traditionally, and five years ago even
Speaker 1: you know, Chinese wouldn't wouldn't even be interested in Western
Speaker 1: What like, what are they buying? Like, you know, is it, um,
Speaker 1: contemporary Hackney? Is it? What is it that they want
Speaker 1: you mean today? Um? Yeah, like the the big the
Speaker 1: big names, Yeah, Warhol, Hackney and and so on. Yeah.
Speaker 1: And what about demographically, I mean, is this a market
Speaker 1: especially as technology gets introduced, You're able to see online
Speaker 1: catalogs and whatnot. You don't have to show up at
Speaker 1: the auction house necessarily. Are you seeing the demographic exchange.
Speaker 1: We've got a lot of wealth that's created, say out
Speaker 1: in Silicon Valley by the tech bubble. What what are
Speaker 1: the sort of contours of who's buying the art? Yeah? Um,
Speaker 1: I think that a lot of the same people are
Speaker 1: buying the art. You know, we um, you know, we
Speaker 1: have a very strong core of people who are very
Speaker 1: interested in art and regularly buy and that's always stayed
Speaker 1: the same. But outside of that, the market has grown
Speaker 1: a little bit. And you see, you know, of course
Speaker 1: Silicon Values is one example, and you know, and then
Speaker 1: other other countries China, Russia and so on. I have
Speaker 1: to say this art report, it's really comprehensive. I think
Speaker 1: it's like something over fifty pages here. But what's fascinating
Speaker 1: is I think when you kind of get into, you know,
Speaker 1: who are today's most bankable artists? And you know, is
Speaker 1: it still in the art market where you want to
Speaker 1: find And we're talking with Eli Broade about this, you know,
Speaker 1: and his team that you know, he really went after
Speaker 1: some artists that weren't necessarily well known but bottle out
Speaker 1: of their art and they eventually became really well known.
Speaker 1: And I'm just wondering, what's the strategy are people are
Speaker 1: art collectors still looking for that unknown trying to get
Speaker 1: in on their work early, or is it that in
Speaker 1: terms of you want to go after those reliable, bankable
Speaker 1: artists that's where they want to invest. Well, it's it's
Speaker 1: it's both. But you know what I find very interesting,
Speaker 1: if you know, looking for artists that are not really
Speaker 1: famous yet and and discovering them, and you know, and
Speaker 1: and and you know, and taking a bet on that.
Speaker 1: That's that's I think, what what is an interesting of
Speaker 1: course all the time anytime. Alright. Jacobops is chief executive
Speaker 1: officer of art Net. They have just released their thirtieth
Speaker 1: anniversary intelligence report, looking Back, looking forward, and a lot
Speaker 1: has changed in the art world, for sure. Yeah. Absolutely.
Speaker 1: I was thinking about the story of the magazine. Recently
Speaker 1: we profiled an artist, uh and her story. Um, it's fascinating.
Speaker 1: It's photographs, its drawings, um, but it's also a supplied
Speaker 1: demand thing. She doesn't put out a lot of work.
Speaker 1: She's been known and I forgive me, I forget her name,
Speaker 1: and I'll try and tweet it out. But it's just
Speaker 1: interesting to see some of the dynamics. It's not easy
Speaker 1: being green Daily. Great week this week because all week
Speaker 1: we've been featuring stories, reporters and guests on climate change.
Speaker 1: Is part of our participation in the Covering Climate Now initiatives.
Speaker 1: It's a global collaboration of more than news outlets to
Speaker 1: highlight climate change and it's led by the Columbia Journalism School.
Speaker 1: So with us having said that, Garvin J. Bush is
Speaker 1: back with us. He's co founder chief investment officer of
Speaker 1: Green Alpha Advisers based in Boulder, Colorado. Returning to our
Speaker 1: Bloomberg Interactive Brokers studio. So we have been talking about
Speaker 1: climate change, and one of the interesting stories I thought
Speaker 1: was when we talked about renewables and how it's really
Speaker 1: become a viable industry. Whereas twenty years ago, thirty years ago,
Speaker 1: forty years ago, maybe it was kind of a cool thing.
Speaker 1: It sounded like a nice thing to do, but people
Speaker 1: were not all in it financially, it didn't quite make sense.
Speaker 1: That's not the case anymore. Yeah, that's extremely true, Carol.
Speaker 1: The rise of renewables and the plummeting of the cost
Speaker 1: of renewables has been dramatic just in the last ten years.
Speaker 1: You know, you said twenty but it's really been even
Speaker 1: more recent than that. And it's and it's all about
Speaker 1: scale right rights law and a different version of Moore's
Speaker 1: law in the case of of silicon p V photovoltaic panels,
Speaker 1: means that every time there's a doubling of deployment, because
Speaker 1: comes down about and so there's been enough doublings in
Speaker 1: the last ten years that now you know, the cheapest
Speaker 1: power purchase agreement the utilities are signing with solar is
Speaker 1: under two pennies that kill a lot hour. You know,
Speaker 1: this comes up against natural gas at five pennies and
Speaker 1: coal at five to ten. So it's extremely economically an
Speaker 1: amazing math right there. No, and it's and it's why
Speaker 1: it makes a fantastic forward investment because if your utility,
Speaker 1: what do you want to buy twopenny power or fivepenny
Speaker 1: power because you get to keep the difference because what
Speaker 1: you can charge your rate payers is mandated by law.
Speaker 1: And so you were testifying just recently down in Washington
Speaker 1: the House Select Committee on the Climate Crisis, and it
Speaker 1: does feel like, and this goes to your exact point
Speaker 1: a minute ago, we seem to be at a moment
Speaker 1: where people are starting to take notice a little bit.
Speaker 1: And it's not just because of UH initiatives like we're
Speaker 1: talking about this week, but lawmakers started to get more
Speaker 1: serious about it. It's not just celebrities being like, hey,
Speaker 1: save the earth, that's cool, we don't want it to disappear. Um.
Speaker 1: Why is that? Because the risks are now so much
Speaker 1: more apparent. You know, we were talking about how fast
Speaker 1: renewable energy economics have changed in the last ten years,
Speaker 1: will so to have the risks associated with the climate crisis.
Speaker 1: There's so much more evident now that people really are
Speaker 1: taking notice. That's that's part one. In Part two is
Speaker 1: the younger generation that are really going to have to
Speaker 1: live through the worst outcomes of the climate crisis are
Speaker 1: becoming politically aware, and so they are starting to make
Speaker 1: a lot of noise. Well, and you know, I even
Speaker 1: think about this, it's interesting, you said, because I think
Speaker 1: about this from a consumer perspective. We just had an
Speaker 1: author on a couple of weeks ago last week, I believe,
Speaker 1: was new book out called Fashionopolis that's really about consumption
Speaker 1: and production and manufacturing and consumers, especially younger consumers seem
Speaker 1: to be voting with their feet. That that feels like
Speaker 1: an investable theme there, right, Yeah, no question between. A
Speaker 1: lot of the sustainability topics are very investable right now.
Speaker 1: It isn't you know, like Carol, like you were saying,
Speaker 1: with renewable energy, it's a super viable investment right now,
Speaker 1: not because it's green or green or warm and fuzzy,
Speaker 1: but because it makes economic sense all across follow the
Speaker 1: money essentially right, and it tries. But okay, So having
Speaker 1: said that, I'm just thinking, if I'm running a business
Speaker 1: and I'm looking at cutting my costs right to improve
Speaker 1: my you know, profit structure. If I see that difference
Speaker 1: between that gas versus solar, why isn't everybody ramping up?
Speaker 1: Or is it just a case it's not as viable
Speaker 1: maybe in the northeast as it is in the southeast. Like,
Speaker 1: what's tell me the dynamics there? As we look at
Speaker 1: our country and maybe the world, a handful of things
Speaker 1: going on there. But yeah, one is just the geography.
Speaker 1: Some places it's windier than others, some places it's sunni
Speaker 1: or than others. In the sunniest places, solar makes no
Speaker 1: sense economically, not just in terms of how will it works,
Speaker 1: although those things go together. Uh, the same could be
Speaker 1: said for wind. Now. The other part though, is that
Speaker 1: there is political structure. There are some places where the
Speaker 1: local government doesn't want to see it coming and so
Speaker 1: they put up barriers to prevent it. So even historically
Speaker 1: I understand what the wind like, the pushback because they
Speaker 1: don't want them, you know, you know, off of Martha's
Speaker 1: vineyard or what have But solar the same reason. Yep.
Speaker 1: Sometimes it's numbism like that they just don't want to
Speaker 1: be able to see the solar panels out out their window.
Speaker 1: And other times it's a little bit more ideological. You know,
Speaker 1: maybe it's an older generation that grew up with the
Speaker 1: fossil powered utility and they just saying that's how the
Speaker 1: world should be in so they sort of will put
Speaker 1: up regulatory barriers to to block it. What about lobbying
Speaker 1: in terms of political by the energy space, and that,
Speaker 1: of course is a big factor because the fossil energy
Speaker 1: space still has more money and more political clout than
Speaker 1: the renewable energy space forgiving. I mean, everybody's lobbing, but
Speaker 1: fossil versus Yeah. So speaking of politics, tells about your
Speaker 1: experience testifying. What were the questions like, what was the tone?
Speaker 1: What was your takeaway? You know, first of all, I
Speaker 1: want to compliment Kathy Castor, the congresswoman from Tampa who
Speaker 1: is the chair of that committee, the House Selight Committee
Speaker 1: on the Climate Crisis. I thought it was interesting that
Speaker 1: she wanted to invite an asset manager to testify before
Speaker 1: the climate crisis. It shows that she's perceptive, you know,
Speaker 1: investing where capital is deployed is where the economy flows from.
Speaker 1: Where you invest is where stuff happens. And she correctly
Speaker 1: perceives that if you can fix investing, you can fix
Speaker 1: the economy and maybe solve the climate crisis. Right, And
Speaker 1: so that's what I told them, you know, they to
Speaker 1: answer your question directly. They asked me, what's the biggest
Speaker 1: risk coming from your industry? And I said, from the
Speaker 1: investment management industry, the biggest risk related to the climate
Speaker 1: crisis is that, by and large, my industry is ignoring it.
Speaker 1: But I also think, you know, it would be interesting
Speaker 1: to look at the portfolios of various lawmakers too to
Speaker 1: see how many exposure to fossil energy companies At this point.
Speaker 1: My guess is they all do. And that's the problem,
Speaker 1: because it's just so endemic to simply buy an index
Speaker 1: fund and forget it. You know, the SMP five has
Speaker 1: sixty fossil fuels companies. Correct, And if I'm thinking like
Speaker 1: a fiduciary, I don't want to own the causes of
Speaker 1: the climate crisis because those are going to be dramatically,
Speaker 1: Like Mark Carney says, there's gonna be a Minsky moment
Speaker 1: from the carbon facing economy and they're going to be
Speaker 1: dramatically repriced at some point. You don't want to be
Speaker 1: in front of that. It's so fun to talk with you.
Speaker 1: Thank you so much, Garvin. Great to see you, Garvin J. Bush.
Speaker 1: He's a founder, chief investment officer over Green Alpha Advisers
Speaker 1: based in Boulder, Colorado. Back in Oar, Blomberg Interactive Brokers
Speaker 1: to video. On this Thursday, you're listening to Bloomberg Radio
Speaker 1: m