A Deep Look At The Growing Global Marketplace For Art As An Investment

art gallery couple

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Art has traditionally been considered a niche alternative asset class, but given the sector’s solid performance compared to more traditional investments in recent years, that could soon change.Deloitte Luxembourg and art market research firm ArtTactic just released a major report looking at the early stages of an art and finance industry around the world, and conclude that the art market is going through a major transformation.

Art is increasingly being recognised as an asset class in its own right, as new vehicles for art investment appear and more wealth managers start offering art-related services.

The report also offers a look into how different markets are approaching art investments. Not surprisingly, China is at the forefront.

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[slide
permalink=”art-has-outperformed-the-sp-500-total-return-equity-index-every-year-since-2000-traditional-chinese-and-post-war-art-have-performed-particularly-well-1″
title=”Art has outperformed the S&P 500 Total Return equity index every year since 2000. Traditional Chinese and post-war art have performed particularly well.”
content=”Source: Deloitte/ArtTactic
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[slide
permalink=”the-us-and-european-market-for-post-war-and-contemporary-art-has-exploded-in-the-past-decade-from-254-million-in-2000-to-21-billion-in-2011-2″
title=”The U.S. and European market for post-war and contemporary art has exploded in the past decade, from $254 million in 2000 to $2.1 billion in 2011.”
content=”Source: Deloitte/ArtTactic
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[slide
permalink=”china-is-now-the-second-biggest-art-market-with-aggregated-sales-up-more-than-10x-since-2000-up-to-82-billion-in-2010-3″
title=”China is now the second biggest art market, with aggregated sales up more than 10x since 2000, up to $8.2 billion in 2010.”
content=”Chinese buyers have also repeatedly broken auction price records, and the country is home to seven of the 10 biggest auction houses in the world, by revenue.

But the market there has suffered from forgeries and fakes, and there are questions about the credibility of domestic auction data, according to Deloitte.

Source: Deloitte/ArtTactic
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[slide
permalink=”art-funds-which-currently-all-told-currently-manage-around-960-million-are-still-a-niche-market-but-theyve-become-increasingly-popular-as-an-alternative-asset-class-in-the-current-economic-climate-growth-has-been-especially-strong-in-china-4″
title=”Art funds, which currently all told currently manage around $960 million, are still a niche market. But they’ve become increasingly popular as an alternative asset class in the current economic climate. Growth has been especially strong in China.”
content=”Source: Deloitte/ArtTactic
image=”http://static.businessinsider.com/image/4eea2aadecad04c10e000014″
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[slide
permalink=”art-financing-has-also-blossomed-in-the-past-decades-with-more-traditional-banks-and-specialists-getting-into-the-market-5″
title=”Art financing has also blossomed in the past decades, with more traditional banks and specialists getting into the market.”
content=”Some reasons to borrow against art, according to Deloitte:

  • Increase buying power to acquire new art
  • Generate liquidity from individual pieces or collections
  • Create liquidity ahead of a sale

Source: Deloitte/ArtTactic
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[slide
permalink=”another-vehicle-for-art-investment-the-art-exchange-has-also-started-to-crop-up-6″
title=”Another vehicle for art investment–the art exchange–has also started to crop up.”
content=”The first art exchange opened in China in 2009, and another 30 were being set up as of this fall, according to Deloitte. Some engage is a range of art-related businesses, from property rights transactions to art stock trading, while others focus on a niche. They are largely unregulated.

A Luxembourg-based venture called SplitArt is also in the process of acquiring regulatory approval and, if approved, would be the world’s first regulated art exchange.

Source: Deloitte/ArtTactic
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[slide
permalink=”art-fairs-like-art-basel-miami-and-the-frieze-art-fair-have-become-a-global-phenomenon-and-private-banks-have-discovered-that-they-are-an-effective-way-to-engage-high-net-worth-clients-7″
title=”Art fairs like Art Basel Miami and the Frieze Art Fair have become a global phenomenon, and private banks have discovered that they are an effective way to engage high-net-worth clients.”
content=”Source: Deloitte/ArtTactic
image=”http://static.businessinsider.com/image/4eea565b6bb3f7827000000b”
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[slide
permalink=”as-art-has-gained-traction-as-an-investment-class-wealth-managers-have-started-adding-wealth-related-services-8″
title=”As art has gained traction as an investment class, wealth managers have started adding wealth-related services.”
content=”83% of the 19 private, Luxembourg-based banks surveyed by Deloitte felt that there were strong arguments for including art and collectibles in traditional wealth management, in part due to increased competition in the private banking sector.

Source: Deloitte/ArtTactic
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[slide
permalink=”for-collectors-the-most-important-wealth-management-services-are-art-valuationappraisal-and-education-9″
title=”For collectors, the most important wealth management services are art valuation/appraisal and education.”
content=”Source: Deloitte/ArtTactic
image=”http://static.businessinsider.com/image/4eea4a3869beddb76800003d”
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[slide
permalink=”still-wealth-managers-say-there-are-many-challenges-to-offering-art-related-services-the-biggest-is-a-lack-of-internal-expertise-10″
title=”Still, wealth managers say there are many challenges to offering art-related services. The biggest is a lack of internal expertise.”
content=”Source: Deloitte/ArtTactic
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[slide
permalink=”thinking-of-becoming-an-art-collector-11″
title=”Thinking of becoming an art collector?”
content=”8 Ways To Invest In Art That You Probably Haven’t Considered >
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