Passion Investment Exchange: ‘Reconciling the worlds of finance and art’

Christine Bourron is CEO of Pi-eX Ltd.

Christine Bourron has always been fascinated by technology and its capabilities. Shortly after she discovered the internet, she launched one of the first online art galleries,, in New York in 1998. And although she did not know much about art at the time, she saw an opportunity to bring technology to benefit the market.  

Then, in 2014, blockchain and the benefits of free-flowing information led her to create Pi-eX Ltd – a broker-dealer – which provides investors with the analytical instruments to have a holistic view of the art market. The company is also authorised by the UK’s Financial Conduct Authority (FCA).   

It was to reconcile the worlds of finance and art,” because art is a passion investment, different to buying stocks or investing in private equity. Hence Pi-eX, or Passion Investment Exchange, was born.

It is widely understood that art is an attractive investment, simply because it rises in value with time. However, Bourron says art is not exactly a safe investment. “In fact, all the data points to the fact that it is a volatile investment, making it not-so-safe,” she said. 

Garbage in, garbage out. You’re never going to get a good analysis with the wrong set of data.”

An artist such as Picasso might appear to have growing brand value over time, but evidence shows certain individual lots have not performed as well as sellers wanted. This is not the biggest downside, though, because, Bourron argues “volatility is wonderful; if you are aware of it, it could mean that you make more money”.

Pi-eX provides investors with the tools to understand this volatility and help make hypotheses about the right decision. Its clients are art collectors – usually when they are about to buy or sell – wealth managers and loan providers.

What can one expect to see in a Pi-eX report? “We give a take on the market based on real and exhaustive data. So, whether it’s analysing auction sales at the high level or saying what the trends are at the moment,” said Bourron.

The Big Three

Pi-eX’s reports always state that they are based on public information. People often offer them more information, but Bourron says it does not use it until the source can be traced. Private sale numbers especially cannot be trusted, she says: “You can use the anecdote, but I think at this point in the art market, the only numbers that we can trust are the numbers provided by the auction houses.”

The company primarily deals with data provided by Sotheby’s, Christie’s and Phillips. They report data systematically, making it easy to know what’s missing and what’s not, according to Bourron.

The problem with smaller auction houses is that they do not provide as much data. This means Pi-eX is unable to analyse it. Bourron said: “Garbage in, garbage out. You’re never going to get a good analysis with the wrong set of data.”

Sotheby’s Impressionist and Modern Art Evening sale. Courtesy of Sotheby’s.

On the line

Amidst the rescheduling and cancellation of art fairs and auctions due to coronavirus, some feel that telephone bidding might still help facilitate sales. Sotheby’s specialist, Emma Baker, told Private Art Investor that the auction house has confidence in Asian sales nonetheless, as most artworks are purchased over the phone.

With her years of experience in online art, Bourron said online sales are playing an increasingly important role at the top three auction houses.

Initially, when the houses started doing online sales, they counted as many – if not more – lots than day sales. These were often over 150 lots. But now the numbers have reduced greatly. Sotheby’s had 8 online sales in 2019 with just 1 lot per auction, according to Pi-eX’s numbers, recreating the urgency of a live auction.

Still, while the volume of online sales has increased, the revenue generated for the auction houses is still extremely small when compared with day and evening sales,” said Bourron.

She says online sales are a “different animal”, due to the lower price points and lesser attention focused on them. “Auction houses have to have patience to grow these sales. If someone had told me years ago that Sotheby’s would host so many online auctions in 2020, I would not believe it!”

Pi-eX is tracking online sales for Sotheby’s, Christie’s and Phillips every month.

Courtesy of Pixabay.

Art tech in 2020

I think online sales have a good chance to really take off right now,” says Bourron. She loves her technology, but she does not think it will make a difference on its own.

“The art market is definitely in great need of technology, but we need to understand the problems and use the technology to find solutions that will be effective,” she adds. And in fact, sometimes, it is not the only problem.

While technologies like blockchain will help create a decentralised database for artworks, it is not likely, on its own, to solve the problem of attributing reliable information to a specific artwork. The key challenge, she thinks, is the difficulty of linking the physical artwork to a database altogether, whether centralised or decentralised.

Unlike in real estate, where it is easy to pinpoint exactly where a building is positioned, with art, “how can you be sure that you hold the right artwork listed in the database”.

Bourron said: “I am waiting for technology which will link an exact artwork to a database. I know there are some solutions being worked on at the moment.

“I believe this market will really grow once the issue of provenance and authentication are addressed. This will open the door for investors to truly be able to invest in the art itself and also in derivative instruments, like Pi-eX’s Contract on Future Sale (CFS).