John Jessen, Head of Business Development
When the Market Churns: Managing Art Portfolios Through Volatility
Periods of volatility test every asset class and collectibles are no exception.
Collectibles are passionate assets and are tangible, and in turbulent times, hard assets are often perceived as a true store of value. At Overstone we help our clients, be they Financial Institutions, Art Institutions, Family Offices and Collectors, unlock passionate assets into true asset classes.
As the Art Basel & UBS Art Market Report highlights, recent market shifts have seen lower transaction volumes, softening prices in post-war and contemporary segments, and a cooling at the top end. For collectors, family offices, and lenders, these conditions demand not retreat, but recalibration.
Collectibles, unlike listed securities, do not trade daily. Lower liquidity can be a strength during market turmoil, but it also obscures risk if portfolios aren’t actively monitored. The key is not prediction it’s preparation.
Below is a short playbook for navigating art market volatility with confidence and discipline.
1. Repricing, Not Reacting
Volatile periods often expose inflated valuations or stale appraisals. Rather than relying upon sporadic, event-driven estimates, owners should adopt dynamic valuation models that reflect current market conditions, liquidity scores, and demand trends.
Accurate repricing protects both sides: lenders avoid overexposure, and collectors gain a realistic sense of portfolio performance. Data-led valuation platforms such as Overstone’s enable continuous alignment with market signals. While valuations at Overstone are only conducted by our USPAP-accredited in-house art specialist team, at scale, quarterly, mark-to-market re-valuations are established in tandem with our proprietary AI, developed and managed by our team of Data Scientists. Our actionable data facilitates calculated decision-making for Family Offices, PWMs, Banks, Insurance companies and Collectors alike. Furthermore, Overstone’s partnership with the leading wealth reporting platform provider, Addepar, allows collectibles, for the first time, to be integrated into overall wealth reporting.
2. Re-Collateralisation and Loan Management
For those using collectibles as collateral, market corrections can affect loan-to-value ratios. Regularly updating valuations allows lenders to adjust collateral levels and prevent technical defaults, while borrowers maintain flexibility.
Staged or partial re-collateralisation, where high-performing works are substituted for lower-liquidity ones, can preserve relationships and stability through downturns. Overstone’s services span across collections of Fine Art, Watches, Fines Wine, and Classic, as well as High-Performance automobiles. Overstone works with a panel of 30 lenders, experienced in lending against collectibles as collateral. We always seek the best fit between lender and borrower, to avoid any potential conflict of interest.
3. Staged Liquidity and Strategic Sales
In soft markets, rushed sales erode value. Instead, plan staged liquidity: identify which works have market depth and which should be held. Use private sales, fractional opportunities, or structured lending to create liquidity without forced disposals.
According to the Art Basel & UBS Art Market Report, mid-market and regionally diversified sales have proven more resilient than trophy assets - diversification remains the quiet strength of experienced collectors.
4. Governance and Data Discipline
Volatile environments reward structure. Digitised inventories, standardised reporting, and integrated valuation feeds give family offices the visibility needed to make timely, evidence-based decisions. Governance transforms art from a passive store of value into an active financial instrument. One of the features of Overstone’s SaaS platform is a centralised archive system for keeping records such as detailed notes and documents.
Collectibles remain a resilient asset class, but resilience is built on data, not sentiment.
In turbulent markets, the most successful collectors and lenders are those who treat their collections as living portfolios: priced, monitored, and strategically managed.
At Overstone, we help clients apply financial discipline to cultural capital, turning uncertainty into informed opportunity. We help our clients unlock collectibles as asset classes in their own right, and once armed with data on liquidity scores, geographical weather alerts, analytics, dynamic valuations, concentration risk and more, better control and agility is achieved with this growing asset class, as Fine Art alone, now represents on average 15% of an UHNWI’s total net worth, and should no longer be ignored, but rather capitalised upon.
Follow Overstone for more insights on art finance, data intelligence, and collection strategy.
For a free one-hour consultation for Family Offices and PWMs,
please contact: John Jessen: jjessen@overstoneassociates.com
