When purchasing art or investing in an art fund, provenance is a key consideration. Provenance is the ownership history of a piece of art, and being able to identify the chain of ownership from the day the piece left the studio to the present is key. This is a reliable way to demonstrate that the piece is genuine, and depending on the fame of the previous owners- if they were say, royalty or a prominent collector- the piece’s value could increase.

Q. Sticking to our art theme today, let’s take a crack at Provenance. It comes from the French “provenir” … to “come from.” But exactly how does it relate to the value of a piece?
A. There are several interesting points about provenance and art investment. So first, “provenance” is essentially the ownership history of an artwork… who has owned it from the time it left the studio to the present day. And one of the first and most important aspects of the provenance of a piece is that it be unbroken… that you can actually trace ownership through a continuous line.

Q. But, presuming the piece is genuine, why should that really matter?
A. Well, first, its an excellent way to show the piece really is genuine… if an artwork has gone “off the grid” for a few decades, there are concerns that it might be fake, or that it was “enhanced” by an unscrupulous holder, who might have added color to a painting, or a fake signature, to improve resale value… those kinds of alterations really kill the value.

Q. And what about on the positive side? The right provenance can really add value?
A. Right, the flip side is that if the piece was held by famous collectors all along, then it not only shows that the piece is the original, but also that it was well taken care of, and, very importantly, it’s been highly prized for a long period. For example, we’re involved with one fund that specializes in Chinese porcelain. It just auctioned off a major 18th century vase in Hong Kong today. It got a great price, partly because it has been owned by two different royal families… that was a big deal in the auction catalogue.

Q. So that an interesting point, because in some sense it means that you can actually affect the value of a piece in a positive way.
A. Yes, kind of a fascinating point. For example, if a piece is displayed in a major museum, that can definitely by itself increase its value. And so smart art investors do just that, circulating a piece through some major museums for a few years and then putting it back on the market.

Q. So, provenance is like a chain of title for real estate… except there aren’t any central recordkeeping systems for art. How do you actually show it, then?
A. Auction records, sales contracts, estate inventories, and with older pieces, lots and lots of scholarly research.