Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment. Though historically rare violins have not been widely recognized as assets for investment, they are gaining interest due to the steady increase in value, a lively international market and finite supply.
Classical Italian instruments offer a steady annual increase over more than a century of 3% to 5% with a dramatic increase over the last 20 years. Even instruments not in the top tier offer a steady increase in value, appreciating approximately 5.5% annually as cited by Donald M. Cohen in The Red Book. Cohen also notes that the total dollar volume of auction sales has increased by more than 10% per year since 2006.
Even if one does not know about violins, most people have heard the name Antonio Stradivari, who is universally celebrated as the finest violin maker throughout history. Stradivari is not the only elite maker from the 17th and 18th centuries. Guarneri del Gesu, Giovani Battista Guadagnini, Nicolo Amati, Domenico Montagnana and recently Bergonzi are among other makers from the period whose work fetches between $1 million and 15 million.
There is a finite supply, with approximately 600 Stradivari instruments and 140 Guarneri del Gesu violins known to have survived today. A diminishing supply has inspired institutions to collect and preserve the rarest examples. As the accessibility lessens and the values of the instruments climb, opportunity increases for instruments in the second and third tier.
Not everyone can invest 1 million+, but as one category of instrument experiences a price increase, the effect trickles down to the other categories. The market looks to instrument makers that have had steady output, with consistency in quality and sound to help determine the next makers to rise, filling in the recent gap created from a valuation shift. French violin and bow maker Jean Baptiste Vuillaume’s work has increased in value, but also that of his many students. When the fine Italians reached new territory in value, Vuillaume prices went from around $80,000 to $300,000+, with a record $1,361,015 for a matched strong quartet at a 2016 auction. There are makers old and new, in a wide variety of price points from different origins that can offer a sound opportunity.
The golden age of violin making is commonly considered 17th-18th century Italy. Today the violin making industry is experiencing a renaissance. The quality of craftsmanship is flourishing and many contemporary makers are now among the distinguished class whose instruments are considered a valuable investment.
A good example of contemporary instruments increasing in value comes from Paul Becker, a violin maker and dealer in Chicago who has followed the footsteps of multiple generations of violin making. The Becker instruments are prized for their rich tone, excellent wood selection and exemplary workmanship, a bar of excellence that was established by Paul’s grandfather, Carl Becker Sr., a celebrated American violin maker. Since 1970 Becker instruments have gone up in value 5% to 12% annually and continue to be sought after by musicians and collectors.
As with most collectible investments, condition is a significant consideration in valuation. That being said, it does not mean that an item that has had restoration or is need of restoration doesn’t offer investment value. Often an item that has had some wear from use identifies it as an item for working musicians. The depreciation an item takes in relationship to other items of a more pristine quality can provide a good option to acquire a quality piece at a reduced price. Even though the item isn’t expected to financially perform at the top of its class, if well maintained or restored, it will increase in value within the industry standard.
The violin industry offers many sources to gain a basic understanding of instruments, makers and values. The online resource Cozio offers articles from scholars and experts in the industry, detailed pictures of instruments, auction prices and industry news. The maker archive on the Amati website also offers articles on makers and auction sales records. The Red Book publishes the sales of all auctions in the violin trade. The Fairfield book of Known Violin Makers is another source that can help provide insight.
In addition to familiarity with the product, a relationship with an industry expert is highly advisable. There are many dealers and advisory groups in the industry that cater to collectors and understand the process of finding the right instrument for the investment period within the funds available. Documents such as provenance, certificates of authenticity, condition reports are an important part of the process and help to provide reassurance in an investment.
Some investors prefer to keep their investment in a secured vault until they are ready to sell. Others loan their investment to concertizing musicians. Both options have their upsides. An instrument that is stored in a vault (preferably with the controlled humidity) cost less to insure (approximately 0.2% of the value each year). Storage of the instrument means it will not sustain any damage, which is a risk when it is being performed on. However, an instrument that is being performed on and featured in prominent recordings is gaining allure and exposure, which when partnering with the right musician can significantly increase its value; and its insurance cost (0.4% of the value each year).
Purchasing violins through auction was previously a wholesale activity, while musicians and collectors worked primarily with retailers. With the development of the online market, purchasing through auction has become more common. This has yielded higher prices at auction, especially on the fine items. Even with the shift, auction prices are still approximately 50% less than retail. Auction is an excellent option to expose an instrument to a large, international buying market and move the item quickly, though it is unlikely to yield full retail value. As with any illiquid investment, this will take time to get your desired price. The retail environment is more intimate. Each dealer has their own relationships with buyers and collectors, and has their own approach.
There is very little downside to investing in rare and fine instruments. The areas of the greatest concern include damage to the instrument, unknown damage and compromises to the instrument or misidentification upon purchase.
The market of rare and fine instruments is active and growing. In 2004, Orchestrated Investments, Inc. estimated the market capitalization for rare stringed instruments (150 years old by the top 270 makers) to be $12.3 billion; 100% of this market turns over every 30 years, making this market not only financially lush, but also relatively liquid.
Restricted supply and increasing demand from markets such as Russia, China and Korea have accelerated the gains for rare and fine instruments. Large institutional buyers have created more competition and increased demand.
The violin trade can be intimidating. Though there are several outlets for good information, as with any major investment it is important to align yourself with trusted experts in the industry. Investing in violins can yield personal satisfaction, alongside the preservation of an art-form that has been cherished throughout several centuries, while offering a stable and rewarding return.
Notable Violin Sales at Auction in 2016
“The past few years have seen phenomenal growth for 2nd- and 3rd-tier makers in the stringed instrument market. 2016 in particular has brought surges in demand for instruments in the $100,000-$500,000 range. As most of the famous 17th and 18th century Italian makers have now exceeded this price range, new attention and interest is been given to makers like Vuillaume, Rocca, Balestrieri, Storioni and Pressenda. Investors who take a long view and are interested in slow-steady growth can find great opportunities in this segment of the violin market.”
— Jason Price, Founder & Director of Tarisio Auctions
Giovanni Battista Guadagnini Violin: $1,253,000
Giovanni Battista Guadagnini Cello, the “ex-Havemeyer 1743”: $1,505,000
Jean Baptiste Vuillaume String Matched String Quartet “Evangelists”: $1,361,015
Antonio & Hieronymous Amati Cello: £407,500
Tommaso Balestrieri Violin 1788: $366,097
A Violin Case by W. E. Hill & Sons, 1887 from the “Apostles” collection: $17,220