If artists are entrepreneurs, are some art collectors venture-stage investors in art? We investigate this question through the 20th-century U.S. collectors Burton and Emily Hall Tremaine. On average, they collected works within a year of the artwork’s creation date. They invested a nominal $500,000 to build an art collection valued at $84 million when Mrs. Tremaine died in 1987.
Tremaine barn, Meriden, CT. Courtesy of the Tremaine family and the Tremaine Foundation.
Introduction
In cultural economics, there is a growing understanding of artists as entrepreneurs. Artists work independently (Woronkowicz and Noonan 2019), invest in their own work (Gerber 2017), and take risks to make things well before anyone knows whether they will be of value (Caves 2000; Whitaker and Kräussl 2020). The question arises: if artists are entrepreneurs, are some art collectors venture-stage investors in art? We investigate this question through the 20th-century U.S. collectors Burton and Emily Hall Tremaine.
About the Tremaines
Emily Hall Tremaine was born in Butte, Montana, in 1908. Her first marriage was to a thrill-seeking adventurer who died in a plane crash (not his first). After a short second marriage, she wed Burton Tremaine in 1945. When the Tremaines married, Emily already owned some world-class works of art, including the Cubist painting The Black Rose (1927) by George Braques and Piet Mondrian’s Victory Boogie Woogie (1944), which Mrs. Tremaine had purchased in 1944, the year before her and Burton’s marriage.
Risk, Reputation and Rebalancing
We investigate whether collectors are venture-stage investors in three categories: risk (how early in an artist’s career they are collecting), reputation (how they worked strategically with museums), and rebalancing (how they managed their art portfolio through sales and donation). We use a dataset of the Tremaines’ 770 catalogued works and focus on the 390 works for which we have complete information.
Risk
We isolate two aspects of risk: The first is taking early bets. The second is analyzing whether those bets were also of exceptional quality. Regarding early bets, we find that 69% percent of artworks were purchased within one year of creation date. Figure 1 shows the distribution of the lapsed time from artwork creation to purchase by the Tremaines.
Figure 1. Elapsed Time from Artwork Creation to Tremaine Purchase
Figure 1 shows the amount of time that passed from the year of creation of an artwork to the year in which the Tremaines purchased the work
We then compare their purchasing activity to Galenson’s (2001) study of the age at which artists make their greatest contributions and reached their “peak value.” Of the 57 U.S. artists in Galenson’s study, 32 of them (56%) are represented among the 305 artists in the Tremaine collection. We found that on average, the Tremaines purchased an artist’s work 1.54 years before the artist’s respective peak value (with a standard deviation of 11.18). For example, the artist Ad Reinhardt’s peak value year is 1956; the Tremaines collected work was made in 1947, and they acquired that work in the year it was made.
We note that the peak value sometimes occurs early in an artist’s career, at a stage of either very early artistic experimentation or economic precarity, or both. In the case of Sol LeWitt, the peak value year is 1960, eight years before the artist’s first Wall Drawing. In the case of Robert Rauschenberg, the peak year is 1956, two years before the artist’s first solo exhibition at the Leo Castelli Gallery. This timing underscores the importance of the risk early art collectors took in the work in terms of providing financial support to the artist.
Reputation
The second question we asked was how art collectors were using museum strategy. The Tremaine collection received unusual exhibitions in 1947 and 1984. In 1947, the exhibition Painting Towards Architecture of forty-five works in their collection toured twenty-five U.S. cities (Housley, 2001, p. 100). In 1984, the exhibition Twentieth Century Masters at the Wadsworth Atheneum in Hartford, Connecticut, featured 130 works from the collection, at a time the Tremaines were selling numerous masterpieces privately and four years before the first (1988) auction of signal works from the collection.
Of the thirty-four works auction in 1988 after the death of Mrs. Tremaine, all but four of those works were included in the 1984 exhibition. By studying a 1979 appraisal, the 1984 insurance value, and the 1988 auction results, we see the total nominal value of those works go from $2.26 million in 1979 to $5.71 million in 1984 to $24.82 million in 1988—that is, doubling in the first five years and then quintupling in the next five. While it is not possible to isolate these figures entirely from the macro-trends of the art market in the 1980s, these figures support the narrative that the 1984 exhibition had a reputational impact on the market prices of the art.
Rebalancing
In order to understand the impact of the timing of sale, we build a hedonic index of the auctioned works. While the timing of the auctions was down to chance—that is, timed to Mrs. and Mr. Tremaine’s respective deaths—we see evidence that the timing made a substantial difference to the returns achieved, likely in concert with both a booming art market in the 1980s and the landmark 1984 museum exhibition.
Figure 2 Tremaine Index, 1979-1988
Figure 2 shows the index of all artists included in the 1988 Tremaine auction, based on auction results for those artists from 1979 to 1989
Figure 3: Tremaine Index, 1979-1991
Figure 3 shows the index of all artists included in the 1991 Tremaine auction, based on auction results for those artists from 1979 to 1991
The Tremaines also notably donated works to art musems and universities. We see very different patterns in annualized return on investment (ROI) and holding period for auction and donated works for which we have full data. On average, the auctioned works were held for longer (29.57 years vs. 16.14 years for donated works) and also had higher per year ROIs (21.56% per year vs. 16.14% for donated works). Although we are unable to know the Tremaines’ tax position from the data, it is posible they were using donation as a form of portfolio rebalancing to deaccession lesser performing works.
In the end, a collection that had cost a nominal $500,000 to acquire was valued at $84 million when Mrs. Tremaine died in 1987. The 1988 sale of Mrs Tremaine’s portion of the collection seeded the Emily Hall Tremaine Foundation which gives grants to support curatorial exhibition research and the business education of artists.
Conclusions
The Tremaines’ story begins and ends with artists. A key question is whether artists also benefitted or were like entrepreneurs who did not own equity in their own companies (Whitaker and Kräussl, 2020). As we confront artists’ share in artificial intelligence (AI) tools that train on their work, these findings have something to teach us about the evolving frontiers of how we support and reward early-stage creative risk in the arts and beyond.
References
Caves, R. E. (2000). Creative industries: Contracts Between Art and Commerce. Cambridge: Harvard University Press.
Emily Hall Tremaine Papers. circa 1890-2004. Archives of American Art, Smithsonian, Washington, D.C.
Galenson, D. W. 2001. Painting Outside the Lines: Patterns of Creativity in Modern Art. Cambridge, MA: Harvard University Press.
Gerber, A. 2017. The Work of Art: Value in Creative Careers. Stanford, CA: Stanford University Press.
Housley, K. L. 2001. Emily Hall Tremaine: Collector on the Cusp. University Press of New England.
Whitaker, A., and Kräussl, R., 2020. Fractional equity, blockchain, and the future of creative work. Management Science 66(10), 4359-4919.
Woronkowicz, J., & Noonan, D. S. 2019. Who goes freelance? The determinants of self-employment for artists. Entrepreneurship Theory and Practice 43(4), 651–672.
About the article
Whitaker, A., Kräussl, R. Art collectors as venture-stage investors. J Cult Econ (2025). https://doi.org/10.1007/s10824-024-09528-8
About the authors
Amy Whitaker, Associate Professor, Visual Arts Administration, New York University, Steinhardt School of Culture, Education, and Human Development, New York, NY USA
Roman Kräussl, Professor of Finance, Bayes Business School, City University of London, United Kingdom
Visiting Fellow, Hoover Institution, Stanford University, Stanford, CA USA
About the image
Tremaine barn, Meriden, CT. Courtesy of the Tremaine family and the Tremaine Foundation.
