Art in wealth portfolios is estimated at $1.5 trillion, increasingly becoming a larger proportion of individual wealth and increasingly being viewed as an asset class by art collectors.
According to the 2014 Art & Finance report published by the audit and consulting firm Deloitte Luxembourg, 61% of collectors (vs. 53% in 2012) see art as an asset class. Moreover, 76% of high-end art collectors are buying art for collecting purposes, with an eye on investment (up from 53% in 2012).
The rise in art prices and values in clients’ overall portfolio suggests that there is likely to be an increasing demand for professional services linked to these assets – leading the global wealth management industry to take a more strategic view on art as an asset class, according to the 2014 Art & Finance report.
“We are observing increased demand in the art and finance market. This positive trend is mainly being driven by the economic recovery that is having a positive impact on the growth of the global art market,” said Roger Dassen, global managing director of clients of services and talent at Deloitte Touche Tohmatsu Limited, in a statement.
The report points out that following the 2008 crisis many private banks outsourced their art advisory groups and most hedge funds left the space.
But, since then, the interest from ultra-high-net-worth individuals has essentially forced these institutions to provide services related to the management and planning of art as an asset class.
The 2014 Art & Finance report suggests there is increasing attention being paid by the wealth management community to what is happening on the art market. Over the past three years, wealth managers are becoming increasingly aware of the development of art as an asset class. According to this year’s study, 53% of wealth managers were aware/very aware of the developments linked to art as an asset class, which is up from 43% in 2012 and 33% in 2011.