Q&A with Sebastian Bennett: Why Art is the New Gold in Investment Portfolios

Q&A with Sebastian Bennett: Why Art is the New Gold in Investment Portfolios

In this exclusive interview, we sit down with Sebastian Bennett, Senior Art Broker at the London Art Exchange, who has made a name for himself by guiding commodities investors from traditional assets like gold into the luxury art market. His expertise in both fields offers a unique perspective on the growing allure of art as a valuable asset in an investor’s portfolio. Here, Sebastian shares his insights on why art is outperforming gold and why investors should consider making the shift.

Q: Sebastian, you’ve had a successful career in the gold markets before transitioning into art. What prompted you to make this move?

Sebastian Bennett: My background in gold taught me a lot about safe-haven investments and the stability they bring to a portfolio. However, over time, I noticed that gold’s returns had become more predictable but relatively flat. It offers a steady return, usually around 5-7%, but there’s only so much growth you can expect in today’s economy. The art market, on the other hand, intrigued me because it had the potential for much higher returns, often in the range of 15-25%, especially in the luxury segment. Art is a unique asset class because it’s not only about financial gain but also about cultural and emotional value. That, combined with its growing demand, made me realize that art could be a more lucrative opportunity for investors looking for higher returns.

Q: Gold is often considered a liquid commodity. How would you compare its liquidity with that of art?

Sebastian Bennett: That’s a great question. Gold’s liquidity is well-known—it’s easily bought and sold, and prices are quite transparent on the global market. But art, especially high-end contemporary art, is becoming increasingly liquid. Platforms like Artnet and Artsy have made it easier to buy and sell artwork globally. While art might not have the same immediate liquidity as gold, if you have the right piece, especially from a renowned artist, it can be sold at auction or through private sales rather quickly. What’s key is understanding that the liquidity of art increases as the artist’s profile grows, and with proper market knowledge, art can rival gold in terms of liquidity.

Q: You mentioned earlier that art can provide a return on investment (ROI) of 15-25%, while gold hovers around 5-7%. What contributes to this difference?

Sebastian Bennett: The main difference lies in the growth potential of these two asset classes. Gold is a mature market—it’s been around for centuries and is primarily used to hedge against inflation or market downturns. Its value is tied to broader macroeconomic factors, so its growth tends to be steady but not extraordinary. On the other hand, art, particularly contemporary and modern works, is influenced by more dynamic factors, such as cultural trends, artist recognition, and market demand. The limited supply of works by top-tier artists and the increasing global demand for luxury assets create an environment where prices can appreciate significantly in a short period.

Additionally, the art market is more niche and selective, meaning there are fewer investors, which leaves room for greater returns if you make the right choices. In contrast, gold is a highly saturated market with millions of investors worldwide, so the price fluctuates less dramatically.

Q: Some investors might see art as a riskier investment compared to gold. How do you address those concerns?

Sebastian Bennett:Risk is inherent in any investment, but it’s about how you manage it. Yes, art can be seen as riskier because it’s more subjective and its value can be harder to quantify. But, when you work with experts who understand market trends, artist reputations, and the overall art ecosystem, you can mitigate a lot of that risk. At the London Art Exchange, we use data and analysis similar to what commodities traders use to track market conditions. We also consider factors like the artist’s exhibition history, sales track record, and cultural relevance, all of which contribute to making informed decisions.

For example, certain artists, like those we work with, show consistent year-on-year growth in value. So, while it might seem riskier than gold at first glance, the right strategies can turn art into a low-risk, high-reward investment.

Q: How do you convince traditional commodities investors to diversify into the art market?

Sebastian Bennett: The key is education. Most commodities investors are very numbers-driven, so I focus on presenting the financial data that supports art as a solid investment. I show them past performance, explain the market dynamics, and highlight specific artists who have demonstrated significant growth—sometimes even outperforming traditional assets like gold. Investors are always looking for diversification, and art offers that in spades because it’s not correlated with the stock market or commodity prices.

When I break it down, they start to see the appeal of having an asset that can appreciate 15-25% in value each year, compared to gold’s 5-7%. Plus, many of them are drawn to the idea of owning something tangible and culturally significant, which gold can’t offer in the same way.

Q: What’s the future of art investment, in your opinion?

Sebastian Bennett: I think we’re just scratching the surface. As more high-net-worth individuals and institutional investors diversify their portfolios, we’ll see more attention on art as a viable asset class. There’s also a growing trend toward fractional ownership, where people can own shares of a piece of art, making it more accessible to a broader range of investors.

Art has always been about more than just money—it’s about legacy, culture, and prestige. But now, with the financial performance backing it, I believe art will become a staple in many more investment portfolios, rivaling traditional commodities like gold.

Q: Final thoughts?

Sebastian Bennett:For those who are still on the fence about art investment, I would say don’t underestimate its power. It’s a market that offers both financial returns and personal satisfaction. And in today’s economy, with the returns art can generate, it’s proving to be a smart move for investors who want more than the steady, modest growth gold provides.

Art is the new frontier for smart investors, and I’m excited to be part of the movement that’s pushing it forward.