THE FINE ART MARKET
Over the last few years, the number of collectors who consider art as an asset class and part of their overall wealth strategy has increased. With the estimated value of art and collectibles expected to exceed $2.8 trillion by 2026, this category will make up approximately 11% of the portfolios of ultra-high-net-worth (UHNW) individuals.This number will likely continue to grow since younger investors are almost two times as likely to own tangible assets than older cohorts.
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According to the 2024 Bank of America Private Bank Study of Wealthy Americans, 56% of collectors now consider their art as a part of their wealth management strategy, including 98% of younger collectors (millennials and Gen Z), who are, at higher rates than ever before, integrating art into their charitable giving (52%), tax planning (48%) and liquidity strategy (28%).As the art market evolves amid challenging times, its appeal endures, supported by stable spending patterns. The motivations and behaviors of collectors are also shifting. The Art market is currently estimated to be between $26 billion-to-$31 billion in loan value and expected to grow 8% YoY. Cities like Dubai and Riyadh are becoming important for art collection and investment.
ELIMINATING RISKS FOR ART GALLERIES
Art Galleries face numerous challenges today. Online galleries are proving to be slowly successful. There is increased adoption of digital art-buying.Technology is helping to manage and value collections, which is leading to more digital art purchases. Brick & Mortar art galleries have high overheads leading to higher prices. In addition, procuring art for resale comes with additional risks. Buying at auctions with no guarantees or refunds is tricky. It’s “buyer beware” at every auction house. Galleries might end up with a forgery or uncover damage that can hit profitability hard. In addition, auction houses have a buyer’s fee of 20% to 35% plus shipping charges which makes procurement a cumbersome exercise. Great and valuable artworks can also be found in estate sales and offered in little known auction houses. For a gallery to constantly keep an eye on the best procurement strategy, it remains an ongoing challenge.
We work with gallery owners in different ways according to their knowledge, taste and budget. For all clients we use our global network to source art, then we provide market reports, make recommendations based on our knowledge of the market and our client’s taste. Our constant research helps us access paintings which clients would not know about or have access to. We ship artworks to galleries for examination and subsequent purchase leading to elimination of authenticity risks, condition challenges and the entire aspect of convenience provided by outsourcing art procurement to a trusted partner.
