Passion Assets: The Secondary Market
An Evening At Mishcon de Reya

The advent of online marketplaces has facilitated a new approach to collecting when it comes to luxury assets. Across all passion asset classes, there exists an undeniable emphasis on community. From art to watches to fashion, fervent communities are built on their admiration for the items they collect. Though each of these assets possess distinctive values, qualities, and audiences, this discussion emphasised some of their fundamental similarities: fostering a cohesive narrative about the nature of collecting in the modern era.

Thanks to the nature of online selling platforms, collectors and investors increasingly place supreme importance on access to information and transparent market data. Much like MyArtBroker, which was founded by Ian and Joe Syer after experiencing barriers to data-driven collecting - both Subdial and By Rotation were forged by collectors. Founded in 2018, Subdial seek to reimagine the endeavour of collecting watches - equipping collectors with transparent market insights, collection management, and real time price tracking. Likewise, By Rotation was founded in 2019 with a pioneering view to disrupt the fast fashion cycle by building a social network of lenders and renters. Though each of our markets are unique, they are driven purely by the passion of our collectors.

Here the highlights from the panel discussion:

Though collectors look across different luxury assets to build a diversified portfolio, the uniqueness of each market was brought to the fore during this discussion. Charlotte emphasised the distinctiveness of the prints and editions market amidst the wider art market. As Charlotte described, the prints and editions segment is a comps market, enabling collectors and investors to make well-informed decisions. For Charlotte, the essence of this market lies in the passion among collectors: it is driven by a collector's genuine love for an artwork or artist first and foremost.

Christy of Subdial provided insights into the dynamic market for watches. Reflecting on the evolution of the market over the past five years alone, there has been a palpable shift. Christy explained that a younger generation of watch collectors has emerged in recent years, bringing with them a difference pace and perspective in this well-established market. Subdial aims to cater to this new demographic, recognising the rapidity with which watch models gain value and become conversation pieces. Much like Charlotte, Christy believes that the allure of watches often stems from the narratives behind each brand, period, and model.

Eshita, the founder and CEO of By Rotation, presented a fresh perspective on luxury fashion. Though By Rotation is not a secondary market in the traditional sense - offering lending services rather than resale - it demonstrates the impulses and trends among younger generations. She described By Rotation as more than just a platform; it's a burgeoning social network. With a mission to challenge over-consumption and fast fashion, By Rotation offer a large array of over 80,000 garments and accessories for rending, promoting a refreshingly sustainable and communal approach to luxury fashion.

Ultimately, what drives all collectors across a myriad of passion asset classes are trends. As Charlotte observed, a big event in an artist's career or market can trigger a surge in demand within their larger market. She noted that this was no better observed than in the Banksy market after the shredding of his Girl With Balloon painting at Sotheby's, which catalysed a period of exponential growth in the Banksy market. Nonetheless, both Christy and Charlotte agreed that genuine passion is the paramount driving-force for most collectors. Though an awareness of market trends and a data-driven investment approach is crucial, it is a vested interest in the asset which drives collectors most

The duration for which collectors and investors retain their assets varies across different asset classes. Art has historically been viewed as illiquid. However, with the rise of online platforms and communities like ours, it has become easier for sellers to connect with potential buyers. Just as Christy has observed in the watch market, passion assets are becoming much more fluid with these developments within the online collecting community.

In their discussion centred around the significance of data for online platforms, several similarities emerged across each market.

Charlotte spoke of her extensive experience in auction to emphasise the limitations of the auction house model when it comes to collecting and trading art. Highlighting that the artworks sold at auctions represent a mere 35% of the market, she stressed the need for a broader perspective - something achieved by MyArtBroker. By gathering over 40 data points and developing a sophisticated algorithm - SingularityX - MyArtBroker offers insights into pricing that traditional remained concealed. Championing unparalleled transparency, Charlotte expressed MyArtBroker's mission to break down art market barriers and equip collectors with the data with which to make informed decisions.

For Subdial, Christy emphasised the challenges that have historically plagued the watch market - notably issues surrounding trust and authenticity. Much like the art market, he noted the traditional reliance on dealers in this market versus Subdial's innovative approach. With their data-first view of the watch market, Subdial seeks to understand the intricacies of the market and equip their collectors with that information to navigate the collecting process.

Though By Rotation does not use data to facilitate ‘collecting’ per se, Eshita underscored the platform's proactive approach to data tracking. She elaborated on the tools available to lenders, such as a personal activity dashboard which offers insights into the value of their listings. This data-driven feature not only showcases the lender's ROI and top listings, but also empowers lenders to adopt a more strategic approach to shopping. This approach seeks to disrupt conventional consumption patterns in the traditional trend cycle, promoting a more informed and sustainable way of engaging with luxury fashion.

Towards the end of the discussion, the trio addresses the question of sustainability in luxury markets. Crucially, MyArtBroker, Subdial, and By Rotation operate in the secondary and pre-owned markets. Thanks to the nature of the passion assets we trade in, there is an inherent sustainability to our businesses - placing financial and emotional value on assets which have an ongoing legacy.

For By Rotation in particular, sustainability is a core tenet of their mission to redefine fashion consumption. By gamifying their app, By Rotation have transformed the act of lending clothes into a profitable and fun endeavour for their members.

In terms of the secondary market, Christy presented a refreshing perspective, emphasising the allure of the pre-owned market for watches. He argued that “pre-owned is a way more fun place to be as a collector,” making the watch market an engaging and enjoyable space - something Subdial have fostered in their business model.

Likewise, Charlotte from MyArtBroker highlighted the inherent sustainability in supporting and preserving artistic craftsmanship and legacy. This emphasis on the enduring value attached to blue chip artists supports sustainable practices in the art market, ensuring that artworks are preserved for years to come.