The short answer is that we focus on what we consider investment grade art, which in practice means blue chip artists with long, proven markets. We are not in the business of buying ultra contemporary work, the very young, recently discovered artists whose prices have run up quickly over the past few years. This is a deliberate choice, and it comes down to data rather than taste.
That distinction matters more than most people assume, so it is worth walking through what these two categories actually are, what the historical numbers say about each, and the process we use to decide what belongs in a portfolio.
What Counts as Blue Chip Versus Ultra Contemporary Art?
Blue chip art is work by historically established artists with decades of auction history, deep museum representation, and consistent global demand across market cycles. Think Basquiat, Warhol, Picasso, Rothko. These are the names that show up in evening sales at Christie's, Sotheby's, and Phillips year after year, and they account for the overwhelming majority of the value in the market. One figure cited by the research firm Zurani puts blue chip works at over 80% of global art market value while representing only a small fraction of the lots that change hands.(1)
Ultra contemporary art, sometimes called "wet paint," is the opposite end of the timeline. The auction industry generally applies the term to artists born after roughly 1975, often under 40, whose work has only traded at auction in the last decade.(2) The defining feature is a short and incomplete record. The prices may be high, but the long term demand is unproven.
I use the beachfront property analogy a lot here, because it travels well. There is an enormous amount of real estate in the world, and only a small portion of it actually appreciates in any reliable way. The art market is similar. A great deal of art gets made and sold. A very small slice of it behaves like an asset. Our job is to stay inside that slice.
How Do the Risk and Return Profiles Actually Differ?
This is where the data does the work, and the contrast is real.
On the blue chip side, the numbers are reasonably clean because the track record is long. Splint Invest, citing the Artprice100 blue chip index, reports an average annual return of roughly 10% since 2000.(3) An academic working paper that built an Arte Blue Chip Index from nearly 82,000 public transactions across 157 artists found that adding blue chip art to a portfolio improved risk adjusted returns by about 20% while keeping volatility close to the level of the S&P 500.(4) At the artist level, Zurani notes that Gerhard Richter's average values rose more than 380% between 2000 and 2022, which smooths to roughly 7 to 8% a year, with relatively low volatility compared to more speculative segments.(1) The pattern is steady compounding.
The ultra contemporary side looks different, and the honest thing to say is that we do not have a comparable long horizon index, because the cohort is too young to have one. What we do have is the shape of the returns, and the shape is the problem. Market commentators describe ultra contemporary work as having a venture capital style payoff distribution. A minority of artists may deliver very high returns over a decade. The far more common outcome is flat or negative once the initial enthusiasm fades.(1)(5)
So the choice is less about which category can post a bigger number in a good year, and more about the distribution of outcomes. Blue chip gives you a moderate return with a relatively predictable path. Ultra contemporary gives you a wide spread of outcomes with a fat left tail, meaning a real probability of permanent loss. For a vehicle meant to hold a single work for years, that distinction is decisive.
What Did the Ultra Contemporary Market Do in 2024 and 2025?
The recent cycle is a useful case study, because it played out almost exactly the way the structure predicts.
Sales of ultra contemporary work skyrocketed between 2019 and 2021, fueled by speculators chasing the next big name.(5) The Art Basel and UBS report tracked the broader proxy category of "works made in the previous 20 years," which reached 2.9 billion dollars at auction in 2021, about 34% of the postwar and contemporary market.(6) Then it reversed. By 2024 that same segment had fallen 43% to 1.1 billion dollars, just over one third of its 2021 value.(6) The report named ultra contemporary art specifically as a casualty of a more cautious mindset, as buyers rotated back to older, bankable names.(6) One narrower breakdown put under 40 ultra contemporary turnover at roughly 150 million dollars in 2024, only about 8% of the contemporary auction market.(7)
The named flameouts make the abstraction concrete. Artists who became poster figures of the boom, including Anna Weyant, Flora Yukhnovich, Avery Singer, Matthew Wong, Lucy Bull, Jade Fadojutimi, and Robert Nava, saw trophy lots run from five figure gallery prices to six and seven figure auction results in 2021 and 2022, then fall sharply.(5) Across the group, market commentary describes declines on the order of 50 to 90% from peak auction prices for non masterpiece works by 2024, with weaker sell through and more frequent buy ins.(5)(8)
[NEEDS UPDATED DATA: confirm the most current 2025 and 2026 turnover figures for the ultra contemporary segment before publication, as the Art Basel and UBS 2026 report figures cited here are the latest available and may be superseded.]
The lesson is not that these artists lack talent or that none of them will mature into durable markets. Some may. The point is that you could not have known in advance which ones, and the price you paid at the peak assumed you did.
How Do We Decide What to Buy?
When people ask whether we would ever buy an ultra contemporary work, what they are really asking about is our selection process. It is a fairly simple two step process, and maybe that oversimplifies it, but here is the shape.
Step one is choosing the artist market. This is paramount. It does not matter if you own the single best example by an unknown artist, because that best painting will probably wind up not being worth much. So we start by identifying markets that have the structural features we want, and we try to quantify the soft stuff. Our machine learning models look at the correlation between future price appreciation and the gallery that represents an artist, the museums that own the work, and the collectors who buy it. Cultural significance gets thrown around loosely in the art world, so we prefer to measure it.
Step two is sourcing the best available example in that market at the lowest price. If our team fair values a work at a million dollars and we can acquire it for 700,000, that is a good deal. If it is asking two million, it is not.
A few additional rules sit on top of that. We look for a supply sweet spot. Too little supply, and there is not enough trading to sustain a market. Too much, and supply drowns out demand. We want something in the middle that shows consistency over long periods. And as a general matter, we tend to stay under 10 to 15 million dollars per work to protect liquidity, with Basquiat as the explicit exception, because his market is deep enough to support larger acquisitions.
[NEEDS INTERNAL REVIEW: confirm current per work price thresholds and any artist specific exceptions before stating them publicly.]
Ultra contemporary work fails this process at the first step, because the artist market is precisely the thing that has not been proven yet. You can run the models, but you are extrapolating from a few years of data in a segment defined by its short history.
Why Not Just Buy the Oldest, Most Established Art Instead?
There is a natural follow up here, which is that if proven markets are the goal, why not go all the way and buy Old Masters? It is a fair question, and the answer is one of the more counterintuitive findings we have come across.
The older art gets, the less it appreciates. Most people assume the opposite. Our best hypothesis is that appreciation follows fashion, and fashion moves generationally. If you are going to spend serious money on a painting to live with, you probably do not want to hang a Rembrandt above your bed. You want a Basquiat. In our data, contemporary art has appreciated at roughly 12 to 13% a year, Modern at 8 to 9%, Impressionist at 6 to 7%, and Old Masters at 1 to 2%.
[NEEDS UPDATED DATA: verify the current category appreciation rates against the latest internal index figures before publication.]
So blue chip postwar and contemporary art sits in a useful spot on that curve. It is recent enough to ride the generational demand, and proven enough to have a market you can underwrite. That balance, recent but established, is the zone we try to stay in.
The Bottom Line
We focus on investment grade, blue chip art, and we mostly stay away from ultra contemporary work. This is not a comment on which art is better or more important. It is a comment on which art behaves like an asset. Blue chip markets give you decades of repeat sale data, deep liquidity, and a return path you can study. Ultra contemporary markets give you a short record and a wide range of outcomes, and the past two years have shown how quickly that range can swing against a buyer who paid the peak price.
Our process starts with the artist market and only then moves to the individual work. Ultra contemporary art tends to fail at the first step, because the market itself is the thing still being tested. We would rather own the beachfront property.
Sources
- Zurani, "What Is Blue Chip Art Investment?" https://www.zurani.com/what-is-blue-chip-art-investment/
- Maddox Gallery, "Red Chip vs. Blue Chip Art Investment," https://maddoxgallery.com/news/455-red-chip-vs.-blue-chip-art-investment-a/
- Splint Invest, "Invest in Blue Chip Art," https://splintinvest.com/en/blog/invest-in-blue-chip-art/
- Arte Blue Chip Index working paper (1990 to 2024), SSRN, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5006931
- Book of Art, "The Great Market Reset: Post Boom Collecting in 2025," https://bookofart.net/en/art-blog/7153-the-great-market-reset-post-boom-collecting-in-2025
- Art Basel and UBS Art Market Report, https://www.artbasel.com/stories/unpacking-the-art-market-report-art-basel-ubs-2025
- Markowicz Fine Art, "State of the Art Market: Contemporary and Pop," https://markowiczfineart.com/blog/49-state-of-the-art-market-contemporary-pop/
- Observer, "2025 Art Market Review," https://observer.com/2025/12/2025-art-market-review-auctions-galleries-gulf-digital-art/