Investors to spend $2.7tn on art by 2026, finds report
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Could fine art be the next alternatives market to truly take off? According to Deloitte’s fifth Art & Finance Report, it might well be, after forecasting that rich investors will spend $2.7 trillion (£2.1 trillion).
Deloitte’s report polled 69 private banks – including 27 family offices – as well as 155 art professionals and 107 international collectors to find out how art is viewed in the current investment landscape.
The consensus is that investment into art will not only increase in the near future, but will attract a broader range of investors. An average of 44 per cent of wealth managers report that they would be devoting more focus and resources to art and wealth management services over the next year, the highest proportion ever recorded by Deloitte.
The report’s authors, Adriano Picinati di Torcello, the director at Deloitte Luxembourg and global art and finance coordinator, and Anders Petterson, the managing director of the research firm ArtTactic, say that there is “an increasing convergence between collectors, art professionals, and wealth managers on the role of art in a wealth service offering, as well as a convergence of different stakeholder initiatives when it comes to improving art market transparency.”
Indeed, the report’s authors say that 2017 marks “confirmation” that the coming together of art and wealth management is “part of a long-term industry trend”.
Indeed, 88 per cent of wealth managers surveyed said they thought art should be considered part of their wealth management offering, compared with 80 per cent of artists and 66 per cent of art collectors.
Of those surveyed, 64 per cent of wealth managers, 67 of private banks and 55 per cent of family offices surveyed said they were actively offering services related to art and collectibles at their firms.
Apart from the fact that fine works of art will retain their value over time, there are other motivations among collectors: 63 per cent said that the social value of their holdings was their primary reason for buying it.
In terms of sales alone, auctions have seen 18 per cent more deals completed in the first six months of 2017 despite what is described as a “challenging” previous year.
Total auction sales at Sotheby’s, Christie’s and Phillips all matched this growth, largely fuelled by impressionist, modern and contemporary works, which generated $912 million more this year. These houses alone generated $1.08 billion more in sales in the first half of 2017 than they did in the first six months of 2016.
Though New York City still generates the highest value of deals, the biggest growth in auction sales was seen in London, where 31 per cent more art has been invested in throughout 2017 than was last year.
Overall, impressionist and modern arts sales saw a 62 per cent increase, while there was also a 21 per cent uptake in Chinese and Asian artwork sales.