10 Things You Need to Know About Investing in Art


Berlin played host to the third edition of ArtFi, the Fine Art and Finance Conference, on Wednesday, welcoming influential panelists and art world insiders to the Tagespiegel newspaper headquarters for a day of high-tempo exchange on the latest trends and developments in the art market. Coinciding with Berlin Art Week, the conference’s focus on art and money turned more than a few heads in the German capital, which is legendary for its extremely low concentration of collectors. But speakers such as Art Economics’ Clare McAndrew, the Armory Show’s Noah Horowitz, Art Stage Singapore’s Lorenzo Rudolf, and the Fine Art Fund’s Philip Hoffman, were greeted by a hall packed with international individuals hungry to get the inside scoop on the nexus of money and art. For those that couldn’t attend, artnet News boiled the day down to 10 must-know bits of intel for investing in art.

1. Key players are bullish on art market performance in 2014.
While Clare McAndrew was hesitant to make any specific projections on the market in 2014 in her opening remarks for the conference, she expressed confidence that this year would see continued growth across the art market, over the €47.42 billion in market value for 2013 (“TEFAF Art Market Report Says 2013 Best Year on Record Since 2007, With Market Outlook Bullish“). That likely means that we’ll see the market eclipse its pre-recession level of €48.07 billion from 2007 this year. McAndrew noted that some sectors of the auction market are up 20 percent over 2013, according to half-year reports, due to a strong spring auction season. Nevertheless, she cautioned that much of the market’s worth and relative performance won’t be decided until the fall sales wrap up in December.

2. Business is best in New York, but that doesn’t mean you have to move there.
McAndrew also noted that 80 percent of sales over $10 million are occurring in New York, a city which continues to dominate the global art market, across the upper-end of the price spectrum. A&F Markets’ Pierre Naquin explained in a later break-out session that much of this market dominance could be ascribed to favorable taxation terms in the United States in comparison to other major art markets. Naquin and McAndrew both agreed that the US remains one of if not the art market’s most business-friendly locales.  Thus, a not-insignificant portion of what’s calculated as the US market is in fact art that is imported to the country for sale. Naquin explained that due to art’s relative portability compared to other hard assets, collectors and dealers are increasingly exploring the most favorable sales conditions internationally—something that has accounted for a sizable downturn in the European art market’s growth—especially due to the Artist Resale Right (ARR) (“UK Art Dealers Are Dodging Artist Resale Rights“). McAndrew even referenced a sale in which a client determined it would be cheaper to crate and ship a work to the US rather than sell it in Europe, due to the ARR.


Read the full article at ArtNet News