1、Art&Finance Report 20238th editionMANTLE JONATHAN PRINCEReal or fake?Is your work of art authentic?Are you sure?The problem of forgeries is very common in the art world.As an owner,buyer or seller,forgeries can also affect you.We have the solution:we use artificial intelligence(AI)to assess the auth

2、enticity of your artwork.Heres how we check the authenticity of your artwork:1 Upload a photo of your artwork2 Have it analysed by our AI system3 After 7 days you receive the AI report and your certificateSafety and reliability Our digital solution is fast.One photo is enough,so you dont have to tra

3、nsport the artwork.The analysis is objective,without any human bias.The AI report and the encrypted certificate are a guarantee of security.For more information,please visit our websitewww.art-Fractionalize to Maximise Arkefi,the worlds premier platform democratizing the financing of art,cars,and un

4、ique collectibles.Powered by decentralized finance,we bridge collectors and investors on a groundbreaking platform for Real-World Assets.Dont be left behindA UNIQUE PRIVATE SALES PLATFORM FOR COLLECTORS:BUY,SELL AND FIND ARTAT YOUR FINGERTIPSart.private.appART.PRIVATE.FinanceArtUnlocking art as a fi

5、nancial asset by combining data,art and finance UK+44 20 8133 5955USA+1(786)442 3301ConsultancyArt Wealth Reporting and AnalyticsArt Backed Lending SolutionsDebt AdvisoryLUXURY ASSET VALUATIONS,WARRANTIED.WE PAY THE DIFFERENCE WHEN IT MATTERS MOST.Barker is not a financial guarantee,terms and condit

6、ions 2023 Deloitte Tax&Consulting1Wondeur and Deloitte cooperationA N N O U N C E M E N TD R A F TDeloitte is delighted to cooperate with Wondeur in building an innovative service for fine art insurance,which enables to:optimize insurance premium and claim valuation forge insightful reports for insu

7、rers and collectors scale up fine art insurance offer and profitability build,structure and maintain insurers databasesSTATE OF THE FINE ART INSURANCE MARKETThe fine art insurance industry faces internal and external risks due to climate change and increase damages,while competitionfrom non-speciali

8、st insurers is growing.To address these challenges,insurers need structured art asset data,as most rely on incomplete databases and manual processes.Less than 3%of asset values are checked,primarily focusing on assets valued above$250,000.Wondeurs AI technology performs 50+risk analyses on art asset

9、 values,enabling insurers to proactively manage risks and make informed strategic decisions for their businesses.2023 Deloitte Tax&Consulting,SARLwww.deloitte- Deloitte Private Art&Finance servicesFor your art and collectible assets and projectsFor family offices to financial institutions,artists to

10、 ArtTech,and collectors to cultural sectors,Art&Finance is uniquely positioned at the intersection of it all.Our global transversal team has the expertise you need to make the most of thedynamic art and collectibles industryfrom collection to succession,investment to impact,and everything in between

11、.In the art and finance industry,knowing who youre workingwith can require time-intensive investigation.Keep compliant with our web-based platform,DKYC.In justa couple of clicks,you can delegate the details of your KYC/AML/CTF*operations to us.And you?You can relax.Do you know your customers and bus

12、iness partners?Get peace of mind with DKYC*KYC:Know Your Customer-AML/CTF:Anti-Money Laundering and Counter-Terrorism F 2023 Deloitte Tax&Consulting,SARL12ART&FINANCE REPORT 2023Section 00_ Introduction01_ Wealth and the global art market05_ Art-secured lending06_ Art and investment 00_ Introduction

13、JONATHAN PRINCE STUDIO JONATHAN PRINCEForeword 17Introduction 20Artist acknowledgment 302023 Key report findings 32The big picture 44Priorities38Part 1:Art and collectible wealth overview57Part 2:Global art market review 66Part 3:Regional breakdown96Highlights265Introduction 267Part 1:Size and struc

14、ture of the art-lending market 269Part 2:2023 Survey findings288Highlights307Introduction 309Part 1:Performance of art as an asset class 310Part 2:2023 Survey findings322Part 3:New developments in Art Investment Funds and fractionalization 333Highlights53Introduction 5602_ Art&Wealth Management Surv

15、ey03_ Art wealth protection,estate planning and philanthropy04_ Culture&social impact investment and sustainability08_ Risk management and regulation 07_ Art and technology 09_ Conclusion13Highlights221Introduction 223Part 1:Global shifts in sustainable investment trends 226Part 2:Cultural&creative

16、sectors and sustainable impact investment 237Part 3:Reinventing smart cities through culture 257Highlights347Introduction 348Part 1:2023 Survey findings351Part 2:Blockchain and tokenization 361Part 3:Data and technology ecosystem focus on AI 372Highlights389Introduction 391Part 1:2023 Survey finding

17、s393Part 2:Regulation an update on AML efforts 409Part 3:Risk management,legal and regulatory developments 424Conclusion437Highlights119Introduction 122Part 1:Wealth management trends 125Part 2:2023 Survey findings136Part 3:Family offices,collectors and art professionals:wealth management trends 154

18、Highlights181Introduction 183Part 1:Art and wealth protection 184Part 2:Art and estate planning and philanthropy 191Part 3:2023 Survey findings199Section 08_ Risk management and regulation0908070605040302010014Introduction00_ART&FINANCE REPORT 2023Section 00_ IntroductionTUMBLE I JONATHAN PRINCEIntr

19、oduction20Artist acknowledgment302023 Key report findings32Priorities38The big picture4415Section 08_ Risk management and regulation0908070605040302010016ART&FINANCE REPORT 2023Section 00_ IntroductionCIRCULAR CLIFF JONATHAN PRINCE17Over the years,Deloitte Private has become a go-to advisor to afflu

20、entindividuals and their family offices looking to manage their art and othercollectibles,including fine art,fine wine,aircraft,jewelry,and classic cars.As of late,we are seeing these clients invest a growing portion of their wealth inthese assets.This trend is underscored by findings in this eighth

21、 edition of the Deloitte Private Art&Finance report,which show a 13.4%family office wealth allocation to art and collectibles,almost five percentage points higher than that of private banks.A key reason for this difference is the passion that families have for theinvestments in their family office p

22、ortfolios.Their motivation is very differentthan that of an asset manager investing in equities and bonds,for example.While art and collectibles provide portfolio diversification and potential valueappreciation,they often are a more personal investment with emotional tiesto the familys interests and

23、 preferences.At the same time,like other investable family office assets,these collectionsrequire a focus on governance,multigenerational planning,education,philanthropy,social impact,estate planning,legal agreements and assetdiversification to help preserve and expand their wealth and impact.This b

24、iennial publication,developed in collaboration with market researchfirm ArtTactic,aims to introduce you to some of the most importanttrends and developments emerging at the intersection of art and wealthmanagement.Over the past 12 years,we have monitored variousstakeholders in the Art&Finance indust

25、ry,including private banks,familyoffices,independent wealth managers,and collectors and art professionalsand have reported on the changing role and growing importance of art andcollectible assets within a wealth management service offering.This editionfocuses more closely on family offices and the u

26、nique issues and prioritiesthey face when investing in art and collectibles.I hope you enjoy reading this eighth edition of the Deloitte Private Art&Finance report.Wolfe Foreword_Wolfe Tone Global Deloitte Private LeaderWolfe Tone is the Global Leaderof Deloitte Private with offices inmore than 80 c

27、ountries.Deloitte Private professionalsfocus on the needs of privatelyheld companies,private equityfirms,family offices,and highnet worth individuals.Ourpeople draw upon Deloittesvast global resources,deepindustry insights,and breadthof services to createpersonalized solutions anddeliver value for o

28、ur clients.Section 08_ Risk management and regulation0908070605040302010018ART&FINANCE REPORT 2023Section 00_ IntroductionThe 2023 edition of the biennial Art&Finance Report arrives at a time of economic and geopolitical uncertainty.Rising inflation,higher interest rates,climate change,military conf

29、lict and slower growth provides a challenging backdrop for both the wealth management sector and the global art and collectibles We are delighted to present the 8th edition of the Deloitte Private Art&Finance Report.market.However,being able to adapt and innovate under these circumstances is more im

30、portant than ever,and the search for purpose and asset diversification is even more acute.As with the seven previous editions of the Art&Finance Report,our goal for this edition has been to highlight the continued evolution of the art and finance industry during both good and difficult periods,addre

31、ssing both challenges and opportunities and opening our readers eyes to possible pathways that can benefit all stakeholders across the art,culture and finance ecosystem.The Deloitte Private Art&Finance initiative aims to encourage more collaboration between stakeholder groups at the intersection of

32、art business,culture and finance.We believe that by providing more transparency and awareness around motivations,obstacles,needs and drivers in the art and finance industry,we can catalyze and improve dialogue between these stakeholders,inspire new models and solutions,and amplify the role and impor

33、tance of culture in improving our lives and society.The G20 in India1,which took place 9-10 September 2023,reassessed the economic significance and societal value of the cultural and creative sector to support inclusive growth,sustainable development and decent work.The transformative power of cultu

34、re in achieving Sustainable LIQUID STATE JONATHAN PRINCEAdriano Picinati di Torcello Director Global Art&Finance CoordinatorDeloitte LuxembourgAnders Petterson CEO and Founder ArtTacticLondonDevelopment Goals(SDGs),and addressing todays multifaceted development challenges such as climate change,risi

35、ng inequities and digital transformation.This G20 called for the inclusion of culture as a standalone goal in future discussions on a possible post-2030 development agenda.Wealth managers dealing with art and collectible assets have an opportunity to strategically engage with art and cultural herita

36、ge assets and in new conversations with clients about how they can leverage their art and cultural wealth to achieve both financial and societal value.Since the Deloitte Private Art&Finance initiative was established in 2008,the journey has been marked by many significant moments and encounters.In 2

37、011,we presented the first Art&Finance Report during the fourth Deloitte Private Art&Finance Conference in Miami,Florida.After publishing seven editions of the report in collaboration with ArtTactic,our understanding of the art and finance ecosystem and its developments have greatly evolved.We want

38、to thank all the experts for their invaluable contributions over the years and all the survey participants and art market stakeholders(wealth managers,collectors and art professionals)that continue to share their views and opinions on the industry.What started 12 years ago as an initial investigatio

39、n into the role art could play in wealth management has gained significant momentum.We have reached a stage where the question is no longer why art and finance is important for both the wealth management and art and cultural sectors,but rather how we can best implement and build a well-functioning a

40、nd sustainable service offering addressing the needs of the market.In this report,we take a unique 12-year retrospective look at our findings.It is clear that,despite continued challenges concerning transparency,regulations and the need for modernization of existing art business practices,the art an

41、d finance industry continues to innovate and evolve.It is well-positioned to reap the benefits of the global wealth transfer over the coming decades and a finance industry increasingly oriented to holistic wealth management.We hope this report will give you a richer understanding of the complex natu

42、re of the art and finance ecosystem,the key drivers of change and the role you can play in shaping its future.Adriano Picinati di Torcello Director Global Art&Finance CoordinatorDeloitte LuxembourgAnders Petterson CEO and Founder ArtTacticLondon19Section 08_ Risk management and regulation09080706050

43、40302010020ART&FINANCE REPORT 2023Section 00_ IntroductionSince 2011,Deloitte Private and ArtTactic have published eight editions of the Art&Finance Report,affording us a unique perspective and insight into how the art and finance market has evolved and continues to adapt to internal and external fa

44、ctors.With more than a decade of data and research to look back on,we see what has changed and priorities going forward.The first major sign of change took place around 2016,when we noticed a significant shift in wealth managers perception of the role and value of art and collectibles in wealth mana

45、gement strategy and service offerings.In 2014,only 53%of wealth managers believed art should be included as part of wealth management services.However,this jumped to 78%in 2016,aligning the wealth management industrys opinion with those of collectors and art professionals for the first time in our a

46、nalysis.This consensus has swelled today to its highest reading with around 90%of stakeholders believing art and collectible wealth should be part of a wealth management offering,up 10%since 2021.In recent years,the Introduction_conversation has shifted from whether art should be part of a wealth ma

47、nagement offering to how it can be implemented effectively.We are also starting to see positive implementation momentum among wealth managers with an existing offering as 74%of them intend to offer specific art wealth management services,a leap from 26%in 2011.Technological progress will likely furt

48、her fuel this development,with more than 80%of wealth managers stating that they believe technology will increase market transparency and address provenance and traceability,important challenges in todays art market.The recent technological and regulatory developments around blockchain and tokenizat

49、ion are likely to accelerate and enhance the importance of art and collectibles in a wealth management service offering,as we see with other alternative illiquid assets.Another important element introduced in this years report is the growth and focus on the market for luxury collectibles.In recent y

50、ears,we have seen an increasing interest in the financial and asset attributes of luxury collectibles(watches,jewelry,classic cars,wine,etc.),which could potentially expand the domain of art and finance beyond fine art.This broadens opportunities for the art and finance industry to a new client base

51、 and valuable luxury collectible market.Additional support for the art and finance industry can also come from developments at the national level.In this years report,we have two contributions on Japan,showing that the worlds third largest economy is increasing its activities around culture and crea

52、tive industries.Finally,we believe that the art and finance industry cannot grow unless it also helps address some of the inequities that we see in the art market today.A very small percentage of artists account for a disproportionate share of market value(see opinion piece on page 41),which creates

53、 an imbalance in the art ecosystem that could seriously impact the broader art Twelve years of analysis in the review21market and cultural sector in the future.Our focus on social impact investment in art and culture in the Reports last three editions aims to highlight the growing interest in purpos

54、e-led investment models(particularly among younger generations)and demonstrate opportunity to develop alternative finance models to ensure a more sustainable future for art and culture.The structure of this years report will be familiar to past readers:Section 1_ Wealth and the global art market Sec

55、tion 2_ Art&Wealth Management Survey Section 3_ Art wealth protection,estate planning and philanthropy Section 4_ Culture&social impact investment and sustainability Section 5_ Art-secured lending Section 6_ Art and investment Section 7_ Art and technology Section 8_ Risk management and regulation S

56、ection 9_ ConclusionHowever,this years report features an increased focus on family offices an important stakeholder group for art and collectible wealth management.We have increased the sample of family offices from 21 in 2001 to 32 this year,and several contributions address family offices needs a

57、nd challenges.We will continue to focus on this segment in future reports.We surveyed 63 private banks(up from 59 in 2021)out of which 2 are software banking providers and 13 wealth management companies.All previous reports can be found at www.deloitte-.This years edition is digital,aligned with our

58、 environment and energy policy to minimizing environmental impact.We hope this 8th edition can inspire,encourage and act as a useful guide for those wishing to explore or help build a solid foundation between the art market and the wealth management industry.GALLERY JONATHAN PRINCESection 08_ Risk m

59、anagement and regulation0908070605040302010022ART&FINANCE REPORT 2023Section 00_ IntroductionMethodologySample20112012201420162017201920212023Private banks1930355369545963Family offices00141427252132Art collectors48819094107105115123Art professionals140112122126155138182197Art-secured lenders-1120Sa

60、mple total207223261287358322388435Table 1:Art&Finance report Survey participants by categoryDeloitte Private and ArtTactic conducted the reports research between February 2023 and May 2023.As in previous editions,we also surveyed important stakeholders in the art and finance industry,such as art col

61、lectors and art professionals(i.e.,galleries,auction houses,art advisors,art lawyers,art insurers,art logistics specialists,etc.).A total of 197 art professionals(up from 182 in 2021)and 123 art collectors(up from 115 in 2021)participated in the survey.These stakeholders,representing Europe,the Unit

62、ed States,the Middle East,Latin America and Asia,were surveyed on a variety of themes and topics related to art as an asset class,the role of art in a wealth management context,the impact of technology,new art investment models,and current and future challenges and opportunities.Throughout the repor

63、t,we use NextGen collectors and younger generations of collectors interchangeably to refer to art collectors 35 years and younger.Sample differences:Each years results may be affected by variations in the sample size and the geographic location of the wealth managers that responded to the survey.We

64、also expanded our survey among 20 art-secured lenders this year(up from 11 in 2021),which included eight private banks and twelve asset-based lenders.We would like to express our gratitude to all survey participants;without their support and enthusiasm,this report would not have been possible.We wou

65、ld also like to thank Livia Li,Director at Prestige Arts Club,for her support in surveying and interviewing four Chinese private banks and two family offices for this years edition of the report.GALLERY JONATHAN PRINCEDeloitte Private and ArtTactic recognize that the findings are indicative and unde

66、rstand their limitations.However,we believe the results broadly reflect the current perceptions and attitudes of the global wealth management community,as well as art professionals and collectors.External data and analysisSection 1 of the report also includes a 12-month outlook across various geogra

67、phic art markets.These findings were based on a qualitative ArtTactic Art Market Confidence Survey conducted among 117 art experts in July 2023.Section 1 also features auction data analysis of various modern and contemporary art markets.This data is predominantly from Sothebys,Christies and Phillips

68、,but regional art market profiles also include other auction houses that represent major market shares in regions such as China,India and Africa.This year,we have also included data and market analysis of the nascent non-fungible token(NFT)market;this is based on data and analysis provided by Meta4

69、Capital.In the art investment section of the report(Section 6),we examine the performance,risk and correlation between art and other asset classes,drawing on data analysis from Artnet.For more information on the methodology used,please refer to page 320.23Section 08_ Risk management and regulation09

70、08070605040302010024ART&FINANCE REPORT 2023Section 00_ IntroductionExternal contributions In this years edition,we are delighted to feature 55 leading experts who contributed 31 articles.These provide our readers with new insights on a wide range of initiatives and models that tackle the opportuniti

71、es and challenges facing the art market and the wealth management industry over the next decade.We are delighted to have collaborated with night Deloitte offices that contributed 13 out of the 31 articles:Deloitte Luxembourg,Deloitte US,Deloitte UK,Deloitte Germany,Deloitte Japan,Deloitte Italy,Delo

72、itte CIS,Deloitte Netherlands and Deloitte Switzerland.Deloitte Switzerland also supported for the part 1 of the section 1 on the Wealth management trends.The broad range and geographic diversity of these contributions align with our vision and goal to be an independent and neutral voice of the mark

73、et.It also reflects our ambition to be as international as the global art market itself is.Where art,science,space and tech meetMariam Brian,CEO and Founder of Holo ArtJapanese art scene trends 2023Kiyohiko Nagai,Managing Director,New Business Development,FSI Competency,Risk Advisory,Deloitte Japan;

74、Ayari Mima,Senior Staff,Deloitte JapanDemystifying the Japanese art marketJosephine Ayako Yamada,Head of Innovation&Governance,CEO Office,Corporate Planning,Startbahn;Katsunori Takahashi,Head of Private Banking,Sumitomo Mitsui,Banking CorporationImpact of import VAT on art circulation within Europe

75、and implementation of new Directive(EU)No.2022/542 Andrea Sirio Ortolani,Member of the Board of Apollo Group;Matteo Rumor,Custom duty expert,Deloitte Italy;Davide Bleve,Tax Partner,Deloitte ItalySECTION 01Why art collections need the same strategic risk management as other family assets Maria de Pev

76、erelli Partner,Executive Chairman,Art Management,Stonehage Fleming Financial Services limited;Anna Smith Senior Collection Manager,Art Management,Stonehage Fleming Financial Services limitedWhat family offices and principals need to know about the art marketHannes Hofmann CFA,Managing Director Globa

77、l Head,Global Family Office,Citi Private BankWealth management trendsJean-Francois Lagasse Partner,Financial Services Industry Switzerland and Global Wealth Management Leader,Deloitte Switzerland;Dr.Christoph Knzle,CFA Director,Monitor Deloitte,Wealth and Asset Management Industry Switzerland,Deloit

78、te SwitzerlandThe advancements of art investment in the Middle EastArif Amiri,Chief Executive Officer,DIFC AuthorityFive takeaways from five years of reflection on art&collectibles Monica Heslington,Head of Goldman Sachs Family Office Art&Collectibles StrategySECTION 02GALLERY JONATHAN PRINCE25Secti

79、on 08_ Risk management and regulation0908070605040302010026ART&FINANCE REPORT 2023Section 00_ IntroductionThe Great Art Mismatch by Morgan Stanley Addressing pitfalls in art collectors estate planning:A family office approach Dr.Sara Adami-Johnson,VP,HNW Planning Services specializing in internation

80、al estate,art and digital legacy planning for RBC Family Office Services A glimpse into the world of art foundations today Helena Stork,Co-Founder-World Art Foundations Mapping cultural and creative impact funds around the globe Florencia Giulio,Co-founder of Pulso;Luis Berruete,Partner&Co-founder o

81、f Creas;Patricia Gabeiras,Partner&Co-founder of Gabeiras&AsociadosThe art of investing:How social impact investment drives cultural change Chase Mayo,Senior Consultant,Finance&Enterprise Performance,Deloitte Consulting LLPMeasuring and reporting the impacts of culture-Proposal for a new methodologic

82、al approach Roberta Ghilardi,Sustainability Manager,Deloitte ItalyArt assets and cultural initiatives as a driver for social sustainability-Preliminary resultsRoberta Ghilardi,Sustainability Manager,Deloitte Italy;Italo Carli Head of ARTE Generali Italy SECTION 04SECTION 05SECTION 03Exploring the fu

83、ll power of your art as a financial assetSam Cook,EMEA Head of Specialty Lending Solutions,J.P.Morgan Private Bank;Levi De Feyter,Wealth Advisor Benelux,J.P.Morgan Private Bank(Brussels)Painting a picture of the art-lending landscape-A leading non-bank lenders perspectiveRebecca Fine,Managing Direct

84、or,Art Finance,Athena-Art CorpBridging Industries and the road to optimizing art as a financial assetHarco van den Oever,CEO,Overstone;Mia Bouriss,CEO,Overstone Finance;Chen Chowers,Head of Operations,OverstoneArtworks on tour:Is security interest also along for the journey?Dr.Marcell Baumann,LL.M.,

85、Rechtsanwalt,Deloitte Legal Rechtsanwaltsgesellschaft mbHSECTION 06SECTION 07A look at the performance of art as an asset classRobert Cacharani Director,Business Intelligence,Artnet;Mia Fernandez Data Analyst,Business Intelligence,ArtnetCase study:ARTEX MTF AG-Understanding art IPOs:Risks and reward

86、s of investing in iconic art stocks Yassir Benjelloun-Touimi Co-Founder&Chief Executive Officer,ARTEXThe art of creating a legacy-How technology takes family art collections to the next levelCindy van de Luijtgaarden-Braat,Partner&Lead Private Client Services,Deloitte Netherlands;Frank de Vries,Dire

87、ctor Private Client Services,Deloitte NetherlandsArts&Culture on and off the blockchain-History and use cases for collectors&family officesValrie C.Whitacre,Trilitech,a London adoption hub of the Tezos blockchain ecosystemFrom storerooms to blockchains:How Web3 and NFTs can unleash your art collecti

88、ons untapped potentialPaul De Blasi,Partner,Head of Deloitte Legal&Private Romandie;Fabien Lopez,Innovation Director,Deloitte SwitzerlandAlberto Lenzi,Innovation and Web3,Deloitte SwitzerlandVisual art in the age of AIIgor Rodin,AI Expert,Art collector,Ex-partner,DeloitteNavigating art investment:En

89、hancing family offices decision-making through risk analyticsChloris Yu,Manager,Risk Advisory,Deloitte LLPSECTION 08Anti-money laundering regulations forart market participants:A state-of-the-art analysis Nicolas Marinier Partner,Forensic&Financial Crime,Deloitte LuxembourgMaxime Heckel Partner,Fore

90、nsic&Financial Crime,Deloitte Luxembourg Astrid Brandy,Senior Manager,Advisory&Consulting,Deloitte LuxembourgAndrea Marchetto Manager,Forensic&Financial Crime,Deloitte LuxembourgMarkets in Crypto-Assets Regulation(MiCA)and the art market Arnaud Duchesne,Managing Director,Risk Advisory,Deloitte Luxem

91、bourg;Maria Josefin Johansson Juup,Senior Manager,Risk Advisory,Deloitte Luxembourg;rica Ventura,Senior Consultant,Risk Advisory,Deloitte LuxembourgThe time to act is now:How to increase accountability in the art market-Redefining dispute resolution to grow customer confidenceAshley Gallant Managing

92、 Director of the British Antique Dealers Association(BADA);Fred Clark Senior Associate at law firm Boodle Hatfield LLPManaging financial risk at public auctions from a sellers perspectiveChristine Bourron CEO Pi-eX Ltd27Section 08_ Risk management and regulation0908070605040302010028ART&FINANCE REPO

93、RT 2023Section 00_ IntroductionGALLERY JONATHAN PRINCE29Section 08_ Risk management and regulation0908070605040302010030ART&FINANCE REPORT 2023Section 00_ IntroductionFrom a young age Jonathan Prince knew he was an artist.Prince is now known for his monumental steel sculptures,often seen in-situ in

94、public environments and prestigious private collections.But,Princes path towards a large-scale practice was a journey of risk,luck and realization.When Prince was a teen,he found himself spending weekends in the studio with Jacques Lipschitz where he learned the language of sculpture in bronze and s

95、tone.Just as the mind and hand can impress upon elemental materials to mold newforms,Prince,too,was forever shaped by Saturdays with Jacques.But life had other plans for Princeat least for the first few decades.Prince initially pursued the family trademaxillofacial surgerya mismatched fit,with the r

96、eaction leading to producing films in Hollywood.Through his time in the movies,Prince was connected to the then-budding digital sphere.Soon he was directing companies into the internet revolution,developing media and digital technologies that have helped to shape our digital world today.Artist ackno

97、wledgment_Jonathan PrinceLife was fun and exciting;but Prince knew there had to be something else.That something was art,and Prince could no longer deny the artist inside of him.About twenty years ago,he relented by leaving the corporate carousel for the full-time pursuit of his art practice.Its ess

98、ential to Prince that his inquiry of monumental sculpture goes beyond just form.Princes practice is a commitment to scientific study,spiritual exploration,and a profound reverence for the human condition.Prince has developed his own language that arrived from the many thousands of hours hes devoted

99、to fabricating these works at his studio in the Berkshires,Massachusetts.Prince remains one of the only sculptors to fabricate each piece by hand with his dedicated team in his own studio.He runs his eponymous 20,000 sq.ft.studio from inside an early 20th-century barn in the Berkshires,filled with s

100、tate of the art,operating machinery allowing Prince to make at the heightened scale that his inquiries demand.His studio is a part of the universe hes built as Berkshire House,the artistic compound,home and intimate exhibition space for creative collaborations.In fractured geometries and material im

101、probabilities,there is balance and resolvea life-lesson and artistic motivation that inspires Prince everyday.Princes work has been exhibited at Chesterwood Museum,Christies Sculpture Garden and the Eli and Edythe Broad Museum,at MSU.Prince has had works publicly on view in New York at 590 Madison S

102、culpture Garden,Pier 64 Hudson River Park,and Dag Hammarskjold Plaza;and sits in the collections of the Joseph M.Cohen Family Collection;Julie Prince remains one of the only sculptors to fabricate each piece by hand with his dedicated team in his own studio.and Edward J.Minskoff Collection;The Brigh

103、am and Womens Hospital,Boston,MA;and PricewaterhouseCoopers.Currently,the 24-foot Tumbler is on view in the permanent collection of David and Jennifer Feldman at the Long Meadow Art Residency in New Marlborough,MA.31Section 08_ Risk management and regulation0908070605040302010032ART&FINANCE REPORT 2

104、023Section 00_ Introduction2023 Key report findings_(Summarized version)Section 1_ Wealth and the global art marketGlobal UHNWIs art and collectible wealth estimated to exceed US$2 trillion:We estimate that UHNWIs wealth associated with art and collectibles was US$2.174 trillion in 2022 and predict

105、this figure could grow to an estimated US$2.861 trillion in 2026,due to the increased number of UHNWIs across the world and their increased allocation of wealth to art and collectibles.Art and collectible wealth in 2023 is anticipated to increase due to an average 3.8%2 increase in art values betwee

106、n July 2022 and July 2023.3 Growth is also boosted by an increase in overall wealth as world stocks rallied 12%4 in the first six months of 2023.Art market fails to capture growth in overall wealth:The anemic 14-year annual growth rate5 of 0.6%in the art market has failed to outpace inflation,with g

107、lobal art market sales shrinking in real terms since 2008.This signals that the overall art market is struggling to attract the attention of the larger high-net-worth(HNW)population and their wealth,compared to industries such as the global luxury goods market.Luxury collectible sales reach new heig

108、hts in 2022 and could signal new opportunities for the art and finance industry:The growth potential of the luxury collectibles market is evident in last two years auction sales surge,which reached a record high in 2022.We expect to see growing interest in the financialization of luxury collectibles

109、 and potential to tap into the much broader and larger luxury goods industry(valued at US$1.5 trillion6).Luxury market stakeholders should start integrating this financialization into their business strategy.consumer oriented,a trend that should have a positive impact on the evolution of art and wea

110、lth management services.Convergence between stakeholders reaches new high:Our 12-year survey analyses of different art and finance stakeholders within the wealth management community(private banks,family offices and independent wealth managers),plus collectors and art professionals show encouraging

111、and positive trends for the role of art and its importance in wealth management.Stakeholders narratives and motivations for including and developing art wealth management services are unifying.Across these stakeholders,an average of 89%believe art and collectible wealth should be part of a wealth ma

112、nagement offering verses 65%who said the same in our first survey in 2011.This is the highest percentage in the Art&Finance Reports history.A shift toward the underlying economics of art ownership:Emotional value remains the key driver for buying art(according to 60%of collectors),but for the first

113、time in 12 years,41%of collectors said financial value is their primary motivation overthrowing social value(at 36%)as the second highest motivation.The sector is shifting toward more financially driven considerations,such as looking at art from a perspective that centers portfolio diversification,p

114、rotection against inflation and return on investment.With similar trends seen in luxury collectiblesblurring the lines between fine art,collectibles and luxury assetsour Art&Finance approach(that up to now has predominantly focused on fine art)now also applies to collectibles and luxury assets.Finan

115、cial gain and social impact are priorities to younger generation of collectors:Younger collectors seem even more motivated by financial benefits Section 2_ Art&Wealth Management SurveyA 12-year retrospectiveBetween December 2011 and November 2023,Deloitte Private and ArtTactic have published eight A

116、rt&Finance Reports.Our 12-year analysis from art and finance stakeholders(wealth managers,collectors and art professionals)shows encouraging,upward trends regarding arts role and importance in wealth management.We see a growing consensus among stakeholders narratives and motivations for including an

117、d developing art wealth management services.Client demand for art and wealth management services has also grown over the last 12 years.Significant share of wealth associated with art and collectibles:On average,client allocation to art and collectibles was 10.9%based on our 2023 survey of wealth man

118、agers.(Private banks reported an average of 8.6%allocation,and family offices report an average allocation of 13.4%to art and collectibles).Among wealth managers surveyed,63%have integrated art into their wealth management offering(67%of private banks and 60%of family offices).The push toward holist

119、ic wealth management offering is likely to benefit the art and finance industry:Client continue to demand new products and services,such as private markets,personalized advice and seamless omnichannel experiences.This year,90%of wealth managers(94%private banks and 81%family offices)surveyed said th

120、at the need to develop a holistic advisory relationship with their clients was one of the primary reasons for including art and collectibles in a wealth management service offering.The role of“advice”in wealth management will continue to become more holistic,experiential and surrounding art ownershi

121、p compared with collectors from previous generations.This year,83%of younger collectors said that investment returns were a key motivation(up from 50%in 2021);61%said that portfolio diversification was important(up from 51%in 2021);and just over half(51%)said that they saw art as a safe haven in tim

122、es of uncertainty(up from 34%in 2021).This tells us about how the new generation of collectors may relate to art as an alternative capital asset class,both now and in the future.We also see a stronger motivation(41%)for social impact investment among younger generations that are seeking purpose-driv

123、en investment strategies(up from 31%in 2021).Interest for pure art investment increasing among family offices but remains a niche service:Over the next 12 months,family offices(22%)show a stronger appetite for expanding art investment services(art funds,managed accounts,impact investment,fractional

124、investment,etc.)than private banks(14%).This could mean that family offices are taking a more proactive interest in new art investment models,compared to the more conservative private banking industry.Section 3_ Art wealth protection,estate planning and philanthropyGenerational wealth transfer alrea

125、dy feeding the art market:With a conservative average of 10.9%of wealth allocated to art and collectible assets,wealth transfer increasingly involves art and collectible wealth.Much of todays wealth is controlled by men from the baby-boomer generation,but this is likely to change as they pass their

126、wealth to spouses and children.733Section 08_ Risk management and regulation0908070605040302010034ART&FINANCE REPORT 2023Section 00_ IntroductionEvidence of this art wealth transfer is apparent,with 2022 emerging as the record year for single-owner collections entering the auction market,with sales

127、in 2022 up 64%from 2021.Although fewer single owner collections have come to the market in the first half of 2023,major private collections have entered the market in the second half of this year,such as the prominent collection of Emily Fisher Landau.Connecting with the next generation:This years s

128、urvey shows that younger collectors differ from previous generations when it comes to motivations and needs when buying and investing in art.They are focused on art investment returns(83%young collectors vs 44%older collectors)and also emphasize social impact investment(41%young collectors vs 30%old

129、er collectors).They also perceive risk management as a more relevant service(70%young collectors vs 45%older collectors).Building relationships with different generations within a family will become a critical part of understanding eachs needs and is an opportunity for wealth managers to engage the

130、next generation on their plans and preferences regarding art and collectible wealth.Collection management is the basis for protecting art-related wealth:A fundamental part of art and wealth protection rests with how clients manage their collections,with 52%of collectors saying this was the most rele

131、vant service this year.Strong client collection inventories allow wealth managers to better understand their clients art-related wealth,not to mention enables them to proactively protect historical,cultural and financial value.Record-keeping is a manual process ripe for automation:The large majority

132、(76%)of collectors have yet to adopt art collection software as part of collection management,with 49%keeping records and information in spreadsheets and 27%in paper documents.Only 24%of collectors are using dedicated collection management software;the subset of younger collectors report a slightly

133、higher percentage(29%)of software use.Art-focused estate planning is urgently needed:Only 24%of the collectors surveyed have a long-term plan for their collections,indicating an urgent need for wealth managers to have conversations with their clients about art and estate planning.Section 4_ Culture&

134、social impactinvestment and sustainabilityG20 reaffirmed that cultural and creative sectors(CCS)are a major engine for sustainable socioeconomic recovery:While often perceived to be of little relevance to the overall economy,economic data shows that CCS are a key A shift toward the underlying econom

135、ics of art ownership:Emotional value remains the key driver for buying art,but for the first time in 12 years,financial value is the second highest motivation.growth driver in many countries and represent some of the fastest-growing sectors in the world economy.The G20 in India,which took place 9-10

136、 September 2023,reaffirmed culture as a major engine for sustainable socioeconomic recovery.8Sustainable impact investment in art and culture could become an attractive investment model,especially for the younger generation:In this years survey,we see a slight increase in interest in art and culture

137、-related sustainable impact investment among art professionals,wealth managers and NextGen collectors.24%of collectors(28%in 2021),30%of art professionals(23%in 2021)and 30%of wealth managers(21%in 2021)identified sustainable impact investment in the arts as the most attractive investment model.This

138、 was significantly higher among the younger demographic(below age 35),where 66%(50%in 2021)said socially responsible investment products in culture would appeal the most to them.Wealth managers who expand their sustainable investment offerings may be better positioned to attract and engage the young

139、er client segment.Broader investment trends,such as increasing focus on ESG-compliant investments,could also be filtering down to the cultural space.Nearly a third of family offices are interested in social impact investment in art and culture:31%of the family offices surveyed express strong interes

140、t in investment products focusing on social impact investment in culture(down from 36%in 2021,but up from 16%in 2019).In addition to outright investment in artworks,social impact investment products were the most popular alternative art investment model this year,demonstrating that impact investment

141、s are becoming more appealing to family offices.Investors continue to see social impact investments as an opportunity:In parallel with a downward trend in government arts and culture spending,there is greater appreciation for the positive impact culture and creativity can have on economic developmen

142、t.As a result,new financial ecosystems are emerging around investment into culture,including public,private and philanthropy funding and investment.In this years survey,41%young collectors and 30%of older collectors said social impact investment in art and culture was among the primary motivations f

143、or their involvement in the art and collectibles market,with 50%of young collectors and 45%of older collectors seeing art philanthropy as one of the most important services offered by the wealth management industry.It is essential,therefore,to have a better understanding of the relationship between

144、responsible finance and culture.Section 5_ Art-secured lendingThe art-secured lending market could reach US$29 billion by the end of 2023:Despite higher interest rates,we conservatively estimate that the overall size of outstanding loans against art could reach a market size between US$29.2 billion

145、and US$34.1 billion in 2023,up 11%from 2022.Since our last survey in 2021,the overall art-secured lending market has grown 10.3%annually.9 However,growth is anticipated to slow down in 2023 to 7.5%and increase slightly in 2024 to 8%.We estimate that US$2.2 billion in revenue could be generated from

146、the art-secured lending market in 2023.We also estimate art-secured loans to private collectors between US$26.3 and US$30.7 billion in 2023,with the art trade(galleries and dealers)accounting for an estimated US$2.9 billion to US$3.4 billion.In a more uncertain and volatile economic environment,liqu

147、idity could support the growth of the art-secured lending market over the next two years.35Section 08_ Risk management and regulation0908070605040302010036ART&FINANCE REPORT 2023Section 00_ IntroductionFor private banks,providing liquidity for business operations has been the primary driver of growt

148、h:80%of the private banks surveyed said that the need for liquidity for business operations was a key driver for art-secured loans,and 83%of asset-based lenders said the same.For family offices,however,buying more artworks is the strongest motivation for using art leverage:41%of family offices say t

149、hey would consider using art-secured loans to fund the acquisition of more artworks(up from 8%in 2021).Globalization of the art-secured lending market:Asia and Europe are becoming strategic markets for art-secured lending,as the US market reaches maturity.39%of art-secured lenders said that Asia(and

150、 Hong Kong,in particular)will be a strategic market for growth over the next two years,compared to 10%in 2021.Europe is also seen as an untapped market,with 78%of art-secured lenders viewing it as an opportunity,compared to 70%in 2021.However,lenders,see less opportunity in the mature art-secured le

151、nding market in the United States,with 56%believing this would be the most important market over the next two years,compared to 70%in 2021.These findings might also reflect greater awareness among collectors outside of the United States about the possibility to leverage their art collections.Section

152、 6_ Art and investmentArt acts partially as a hedge in times of uncertainty:According to Artnets Index for Fine Art,the fine art market exceeded the S&P 500s performance between January 2022 and July 2023,where fine art returns grew a nominal 4.2%against a 6.6%loss for the S&P 500 during the same pe

153、riod.Despite a spike in inflation and higher interest rates,art prices suffered less than other asset classes during this period of economic stress and demonstrate the asset class ability to serve partially as an effective hedge,especially with regards to the blue chip,high-end fine art category.Art

154、 shows mixed long-term performance:The financial performance reported by Artnets indices show modest or negative returns across all categories over the medium to long-term(15 years),underperforming other traditional assets classes such as equity,real estate and gold.Artnets index for top 100 fine ar

155、t produced a 2.5%compound annual growth rate(CAGR)between 2008 and first half of 2023,compared to 8.5%for S&P 500,3.8%for real estate and 4.9%for gold.More regulated fractional art ownership initiatives emerge:In the last three years,worldwide interest in fractional art and collectibles investment h

156、as exploded,particularly among the younger generation of collectors(50%of young collectors vs.14%of older collectors)expressing a strong interest in these products.With an estimated AUM of more than US$1 billion in 2023,and with multiple initiatives being regulated by financial regulators for the fi

157、rst time,we may have entered a new era of fractional ownership in art and collectibles which could have a greater chance of gaining mass adoption this time.Younger collectors more open to new art investment models:The interest in fractional ownership among younger collectors surveyed is significantl

158、y higher this year than that of older collectors,with 50%(up from 43%in 2021)saying that they are interested in these types of investment.Young collectors also express a stronger interest in art investment funds(50%this year,up from 29%in 2021).Wealth managers and older generations of collectors hav

159、e more conservative approach to fractional ownership and tokenization:Possibly due to the emerging nature of the fractional ownership industry,only 23%of wealth managers(18%private banks and 34%family offices)said they believed fractional ownership and tokenization of art and collectibles would be i

160、nteresting investment products for their clients(down from 29%in 2021),with 34%of art professionals stating the same(up from 26%in 2021).Collectors remain slightly more cautious,with 21%saying this would be an investment product of interest(no change from 2021).Section 7_ Art and technologyTechnolog

161、ical innovation drives the art and finance sectors closer together:Advancements seen in the intersection between art and technology will benefit the future development of the art and finance industry.64%of wealth managers surveyed this year said that technology could be a catalyst for incorporating

162、art and collectible assets into their existing wealth management services.While only 18%of wealth managers in 2019 said that blockchain technology could have a significant impact on the development of art and wealth management services,a significantly higher proportion(58%)of wealth managers said th

163、e same this year.Technological innovation will drive more transparency in the art market:This year,81%of wealth managers,79%of collectors and 83%of art professionals said that technology could be a catalyst for greater transparency in the art market.Transparency is one of the key challenges to consi

164、der when incorporating art into wealth management service offerings.NextGen collectors drive digital transformation:80%of young collectors believe in blockchain as an asset register for art and collectibles,and 79%see the rapid developments around artwork identification technologies as instruments t

165、o address many of the current inefficiencies in todays art market.Section 8_ Risk management and regulationUrgent need for modernization:Over the last seven years,there has been a strong consensus among stakeholders that the art market needs to modernize its business practices.76%of wealth managers(

166、up from 69%in 2021),82%of art professionals,and 70%of collectors agree.Among the key challenges are lack of transparency(74%of wealth managers said so),issues related to authenticity,lack of provenance,forgery and attribution(80%of wealth managers said this was a key hurdle),and 63%of wealth manager

167、s said the lack of international standards around professional qualifications in the art market was a key hurdle.The perception that the art market has failed to update and modernize business practices is a clear challenge for the markets future growth and development and evolution of art as an asse

168、t class.Self-governance vs.more regulationopinions are divided:44%of wealth managers(same in 2021)believe government regulation is the appropriate response to establish trust and credibility in the art market.70%of family offices surveyed said they believed self-regulation would be the most appropri

169、ate way to tackle the issues facing the art market,while only 30%believe government regulation would be the appropriate answer.However,50%of art professionals this year said they believe regulation could play a role in restoring trust(up from 36%in 2021).This is the highest percentage ever recorded,

170、which could suggest that art industry stakeholders see government intervention as a remedy for restoring trust and credibility.Adoption of more transparency and regulation not happening fast enough:Despite the emergence of improved technology,more data and increased AML regulation,the general view a

171、cross stakeholder groups is that improved transparency and regulation will take longer than envisaged in 2021.Only Younger collectors more open to newart investment models:The interestin fractional ownership among younger collectors surveyed is significantly higher this year than that of older colle

172、ctors,with 50%(up from 43%in 2021).13%of wealth managers said increasing transparency and regulation will take place within the next two years(down from 27%in 2021).37%of wealth managers said it will take more than five years(up from 28%),and 8%said it will never happen(up from 5%in 2021).37Section

173、08_ Risk management and regulation0908070605040302010038ART&FINANCE REPORT 2023Section 00_ IntroductionRegarding Fine Art&Collectible assetsThe next frontier for art and wealth management includes Luxury collectibles.Since the COVID-19 pandemic in 2020,the market and value of luxury collectibles hav

174、e risen significantly,with auction sales at Christies,Sothebys and Phillips almost doubling(+92%)between 2020 and 2022 and with H1 2023 showing no signs of a market slowdown.Although the luxury collectibles market only accounted for 14.8%of the total auction sales in 2022,in the first half of 2023,t

175、he share of the overall market has increased to 19.6%.With the personal luxury goods market significantly outpacing the growth of the art market since 2008,and representing US$353 billion in sales in 2022 compared to US$68 billion in art sales,it is clear that one of the avenues for potential future

176、 growth of the art and finance industry is the incorporation of luxury collectibles in an art and wealth management offering.Wealth managers have the opportunity to broaden their art-related service offering beyond fine art to also include a broader range of new and vintage luxury collectibles,such

177、as jewelry,watches,cars,luxury handbags,furniture and homewares,and other designer goods.As the definition of the art and collectible asset class widens,revealing the potential value in luxury Priorities_collectibles,there will also be a greater need to understand potential opportunity and impact fo

178、r companies in the luxury sector.The fine art market could also draw inspiration and learn from the much larger luxury goods market(i.e.,how it builds trust with its consumers through professional business practices,price transparency and standardization,and via multiple access points for consumers

179、and effective mass communication about both financial and social value).Regarding wealth managersFinancial and non-financial benefits of art-related service offering can be better understood and communicated.While large US private banks have offered art-related services for decades(Citibank started

180、in 1974),more awareness and education around both the financial and non-financial benefits of catering to art and collectible assets is needed among wealth managers in Europe and Asia.Wealth managers must not only support long-term financial stability and prosperity,but also the long term purpose of

181、 the collections,from both a financial asset perspective(collection management,leverage,estate planning,etc.)and a more human and emotional perspective,as 84%of collectors say“emotional value”is the most important driver when buying art.In an industry where providing a holistic wealth management ser

182、vice offering is becoming a competitive edge,wealth managers need to better understand,analyze and communicate the benefits of engaging with their clients art and collectibles-related wealth.The global wealth transfer requires a change in mindset among wealth managers.With an estimated US$2.17 trill

183、ion in art and collectibles wealth held by ultra-high net worth individuals(UHNWIs),a significant portion of this wealth will be passed to new generations in the next two decades.There is an opportunity,but also a responsibility,for wealth managers to develop closer dialogue with older and younger g

184、enerations to ensure a smooth and strategic transition when it comes to art and collectible wealth.For example,wealth managers and their clients need to ensure proper inventory,collection governance,and philanthropic and tax planning.Per our survey of wealth managers this year,there is relatively lo

185、w awareness and engagement with clients around art and estate planning issues,with 18%of wealth managers saying their clients estate plans do not sufficiently address their art collections and a further 24%saying they dont know.Another important aspect in the intergenerational transfer of art-relate

186、d wealth is alignment on a collections future purpose,which could focus on social impact,philanthropic and purpose-led initiatives.The combination of financial factors driving art and collectible10 wealth combined with the strong emotional and social component of art ownership creates an unique oppo

187、rtunity and responsibility for wealth managers to fulfil their fiduciary responsibilities to their clients overall wealth.Regarding sustainability and impact investmentSocial impact investment in art and culture could become a new opportunity for the wealth management sector.Social impact investment

188、 in art and culture is in its infancy with nascent understanding among wealth managers.Only 30%of wealth managers thought this would be of interest to their clients,but 66%of young collectors said they were interested or very interested in social impact investment products in culture.Wealth managers

189、 can still pave the way for a new type of purpose-led investment product in the art and cultural sector,specifically aimed at the next generation of wealth.This could provide the culture and creative sectors with an alternative source of financing to tap into but would require better evaluation of a

190、nd reporting and communication on the investment impact of art and cultural projects.GALLERY JONATHAN PRINCE39Section 08_ Risk management and regulation0908070605040302010040ART&FINANCE REPORT 2023Section 00_ IntroductionRegarding technologyTechnology is a catalyst to support the development of art

191、and finance wealth management services.The art and finance industry needs to explore blockchain technology and fractional ownership as a potential new means to better protect,transfer,monetize and invest in art and collectible assets.This year,58%of wealth managers said they believed that blockchain

192、 technology used to improve the traceability of art and collectibles would have the most impact on the development of art and wealth management services going forward(up from 52%in 2021).Another 43%said the impact of blockchain technology,as a decentralized finance(DeFi)tool,would allow them to more

193、 efficiently incorporate art and collectible assets in wealth management.This development is now also supported by regulations like MiCA and MiFID II(see article on MiCA in the art market page 415),which are creating a new regulatory framework for the integration of illiquid alternative assets(inclu

194、ding art and collectibles assets)in wealth management.Rgarding regulationRegulation and trust remain key issue to address.This year,76%of wealth managers said that the art market and the art industry need to modernize their business practices(up from 69%in 2021),with 70%of collectors and 82%of art p

195、rofessionals agreeing.How to best go about this is not clear,with 56%of wealth managers saying that“self-regulation”would be the best approach,while 44%prefer government regulation.Collectors,on the other hand,are less inclined to see more government intervention,with only 28%saying they favor this

196、route,as opposed to 72%who said that the art market should internally address these challenges.The challenges facing the art market remain relatively unchanged over the last decade and could be a reason for stagnated sales growth over the last 14 years.While the art market often shrouds itself in co

197、nfidentiality,there is a fine balance between confidentiality and mistrust.Lack of price and transaction transparency often leads to asymmetric information availability between actors in the art market and can undermine trust.Can the art world continue to resist consumers demands for more transparen

198、cy through reliable and instantly accessible information?In a world where misinformation is an ever-increasing problem,it is critical for confidentiality and transparency to coexist in the art industry.This requires a new framework;new technologies(like blockchain)and new data ownership and access m

199、odels could support both confidentiality where it is required while providing the right level of transparency to create a more efficient and trusted marketplace.ProvocationWith the working hypothesis that an inclusive,efficient and growing art market will benefit all art market stakeholders and will

200、 support the development of the art and finance wealth management industry,we would like to trigger a broader reflection on the current status of the global art market and the implication for the art and finance industry with a very high-level introduction to the following question:Is a top-heavy ar

201、t market hindering growth and wider impact on the art market ecosystem and the development of the art and finance wealth management industry?Our analysis shows that just over 1%of artists control more than three-quarters of art sales generated at auction.We can assume that only a small percent of ar

202、t buyers are behind these transactions,which leaves us with a heavy concentration around a small number of artists and buyers plus a small number of art professionals(galleries,auction houses,etc.).Could this be one of the main reasons for the art markets overall lackluster growth in the last decade

203、?Figure 1:Top 100 artist vs overall artist population-Auction sales distributionBased on data for Impressionist,Modern,Contemporary art at Sothebys,Christies and PhillipsSource:ArtTactic,Data between 2015 and H1 2023Number of artistsAuction salesBuyers/ConsumersTop 100 artistsRepresents alimited num

204、ber of buyersRest of artists76%98.9%Represents the rest of the buyers24%1.1%41Section 08_ Risk management and regulation0908070605040302010042ART&FINANCE REPORT 2023Section 00_ IntroductionBased on the The Art Basel and UBS Global Art Market Reports,the global art market has faced stagnant growth ov

205、er the last 14-15 years,and at the same time,prices in the auction market have reached record high,with 18 of the top 20 highest auction prices achieved between 2008 and 1H 2023(see analysis on page 75).The top 100 artists by auction sales between 2015 and 1H 2023 accounted for 75%of total sales val

206、ue of all impressionist,modern and contemporary artists at auction,despite only accounting for just over 1%of the artist population represented in the auction market.It is evident that the art market is becoming increasingly weighted toward a relatively small number of artists and movements,which in

207、 turn has generated increasing interest in the investable characteristics and financial aspects of art ownership.The concentration around a small pool of artists is also mirrored in the art and finance industry,where certain products and services,such as art investment products and art-secured lendi

208、ng are predominantly targeting the same groups of artists,for which price transparency and liquidity is the highest.The inherent risk is that those services could influence not only what is happening at the top end of the art market,but also potentially contribute to and fuel further inequities in t

209、he broader art market,rather than support an inclusive agenda of more diversity and growth that could benefit the wider art ecosystem.But is a growing and more equitable art market desirable?Or should we be content with the status quo?Should we let market forces decide?Classic economic theory states

210、 that economic efficiency allows higher levels of productivity,costs reduction,economic growth.So,we would argue that growth is necessary,and only through a broader and diverse growth strategy will we be able to support and maintain creative talents and achieve the wider societal impact that art and

211、 culture can offer.The main problem with the current model is that it promotes a discourse of exclusivity,which impacts consumers and artists(and other art market stakeholders).For consumers,it means that the large majority of art buyers and collectors are priced out from participation in the market

212、;meanwhile for artists,it means that very few have a realistic chance of making a decent living out of their profession and creative output,as a disproportionally large amount of resources and investment goes into maintaining the value of the few.Another issue is the trickling effect.One could argue

213、 that the increase in prices of a small number of artists has led to increasing consumer awareness and interest in art and collectibles and also created a more fertile commercial environment for predominant galleries,auctions houses and dealers and a general expansion of the art ecosystem.However,ov

214、er the last decade,we have seen a decline in galleries11 and less public funding for public and not-for-profit art institutions12;at the same time,we have seen more private museums13 being set up and increasing recognition of the benefits culture plays to society.The art market is increasingly becom

215、ing dominated by an exclusive elite,which raises the question of how much actually trickles down to the broader art ecosystem.Another challenge is the structure of the art industry.The art market remains fragmented with a few large players and many small players.This imbalance in the ecosystem also

216、seems to perpetuate the support of a smaller number of artists who are promoted by major auction houses and a few major dealers and galleries.Could we use some of the tools and services developed by the art and finance industry to create a less elitist and top-heavy industry dynamic with a more incl

217、usive art industry?If it is the way forward,new models are required for the art market to grow and become more diverse.But what could these new models look like and how might we achieve a fairer and more equitable future art market?We believe there are already a number of broader trends that could c

218、atalyze this change.Top-down and bottom-up approaches amplify social impact investment models for art and culture.Our data analysis clearly shows that the current art market does not provide a fair and equitable distribution of wealth across the broader art ecosystem.However,there as signs that cons

219、umers and investors mindsets are changing.The broader shift in the financial market toward ESG-driven investments is apparent,with global ESG fund assets reaching about US$2.5 trillion at the end of 2022,up from US$2.24 trillion at the end of the third quarter 2022,according to Morningstar.14 The ne

220、arly 12%jump in assets was almost double the growth of the broader global fund market.This suggests a broader shift in investment behavior,a trend we believe also will filter down to the art market in coming years.The question becomes,how do we change investors mindset about investment in art and cu

221、lture from self-gratification or financial motivation to a more purpose-led and social impact driven mentality?Part of the long-time challenge faced by the art and cultural industry is measurement and articulation of the societal value of art and culture.However,emerging evaluation models,such as De

222、loittes new methodology on measuring and reporting the impacts of cultureplus increasing academic interest in this fieldposition us to better measure the economic and social impact of art and culture for our society.With these new models and frameworks in place,we have the opportunity to shift the c

223、urrent investment paradigm in the art and cultural industries and to redirect wealth towards building a larger and more sustainable art and cultural sector.On a grassroots level,these changes have been happening for some time.New micro-philanthropic models,such as Kickstarter and Patreon,founded in

224、2009 and 2013,respectively,have succeeded in bringing in much-needed support for artists and creatives.These companies have built platforms that allow artists to tap into a fan-based,purpose-led consumer culture,using technology as the catalyst to reach new audiences.We also see the next phase of th

225、e fractional ownership market,moving from an economic incentivization model toward a more purpose-led model.In this scenario,fractional ownership in the art market could lead to more than just investment returns;it could also be a vehicle for patronage and support of the broader art ecosystem,facili

226、tated by the increasing adoption of blockchain technology discussed further below.Technology as a catalyst to reduce art market inequitiesWhile awareness around blockchain was initially linked to the explosion of public interest in cryptocurrencies,fueled by rocketing prices of Bitcoin and Ethereum,

227、the frenzy obscured the fact that blockchain is a much more general-purpose technology.The real potential of blockchain lies in its ability to securely track,sub-divide and transfer wealth over the internetcreating the possibility of a true sharing economy.The 2021 boom in the NFT market gave us a p

228、otential glimpse of blockchains impact on the art and creative industries,for good and bad.Although the art market cautiously entered the NFT market in 2021,in the intervening years,the true potential of blockchain technology and how it could address weaknesses in the art market is becoming clearer.

229、Blockchain,as the digital vehicle of the sharing economy,has the potential of redistributing wealth created in the art market in ways that were previously inconceivable or impractical.Part of the technologys attractiveness is around ownership and how blockchain can ensure that different stakeholders

230、 have a share in any future benefit that derives from the creation of an art object or cultural project.Artworks created by artists rely on different stakeholders to create value(the artists themselves,the galleries that support them,the curators that include them in exhibitions,the collectors that

231、buy them,etc.).At the moment,the benefits are heavily skewed toward the buyer,and although Artist Resale Rights legislation exists to ensure artists get their share of future resales,the model is currently more theoretical which limits applicable benefits.Therefore,mutually beneficial models,in whic

232、h artists get a percentage of every future transaction,are needed.However,these models should also apply to galleries,patrons and others that have been critical to their artistic development.Using models facilitated by existing blockchain technology could disrupt current wealth distribution to focus

233、 on pre-distribution rather than the current model of post-distribution through taxes and benefits,which often insufficiently compensates the creators or the art ecosystem itself.Blockchain could continue to foster innovation and investment while giving everyone a stake in the future something that

234、is increasingly lacking in todays art market.Making this work is another matter.The entrenched vested interests in the art market to maintain the status quo will be challenging to address.Also,a weaker NFT market and increasing competition among NFT platforms have lead several NFT platforms to make

235、artist royalties optional rather than compulsory for collectors.15 However,we also see initiatives aiming to counter this trend.The 2022 launch of Artcual,a partnership with MCH Group,Art Basel,BCG X and Luma Foundation,is a technology-based startup created by the art community,for the art community

236、.16 The company aims to address existing challenges for artists in terms of royalty collection and payment and to provide a more transparent transaction process for galleries and collectors to increase collector confidence.The key feature of this initiative is the collaborative nature of the stakeho

237、lders involved,which has the possibility to change the perception and existing practices in the art market from within and address existing inequities.With blockchain,other new patronage models or social impact models could emerge.However,it is important that more of the larger players support such

238、initiatives to make them sustainable and drive the desired impact.Increasing public support to promote dynamic,vibrant economic art and cultural sectors The increasing recognition of the importance of the Culture and Creative industries(CCIs)by governments around the world is a positive sign.Initiat

239、ives at the level of the G20,the Organization for Economic Co-operation and Development(OECD)and the European Union to name a few are very good signs to support the development of CCIs.Cultural policies,around funding,education,employment,professional development,intellectual property protection,pro

240、motion and connection,new technologies,leadership,etc.,are areas where governments can grow CCIs for a more inclusive,sustainable and ambitious approach to arts and culture.Recent economic crises have put noticeable pressure on public funding for arts and culture,which triggers the search for altern

241、ative funding models to fund and promote CCIs.For a few years,we have expanded on the topic of social impact investment,sustainability and culture,as this area lacks attention from both the public and private sector.It would be interesting to further explore public-private partnerships and initiativ

242、es around new funding mechanisms,such as the issuance of cultural bonds akin to green bonds(see section 4,page 244).43Section 08_ Risk management and regulation09080706050403020100The transformation of the wealth management sector,the global art market and the cultural and creative sectors(CCS)is ra

243、pidly creating new needs and opportunities at the intersection of art and finance:High-net-worth individuals seek holistic wealth management offerings.Wealth management offerings adapt to new realities,trends and technologies.Art and collectible assets represent a sizeable portion of HNWIs wealth,re

244、quiring the same attention as other assets.Luxury collectible assets follow the same patterns as the fine art assets.A global wealth transfer is impending.And a new generation introduces new values.The need for new sustainable and innovative financial mechanisms for CCS.The big picture_Growth of an

245、innovative art and finance industry Social impact investment is developing and can apply to CCS.Purpose-led investment and innovation is increasingly demanded in the cultural sector.The art sector should improve its efficiency.Trust,transparency and regulations climb the agenda.Technology matures an

246、d offers new ways to do business.KYC-AML and fractional ownership regulation is in place.Culture is recognized as a major engine for sustainable socioeconomic growth.NextGen collectors have different needs and preferences.All of this is part of a global phenomenon one with solid,supportive elements

247、to support the growth of an innovative art and finance industry in the years to come.ART&FINANCE REPORT 2023Section 00_ Introduction44Source:Deloitte Private&ArtTactic Art&Finance Report 7th EditionThe big picture:a unique set of macro trends to a new art worldGlobalization,NextGen,democratization a

248、nd cultural diplomacyTrust,transparency,regulation,professionalismArt and technology,digitalization,virtualization and tokenizationNew economic reality for public cultural institutions,soft power of culture,economic driver,world cultural heritageCreative sectors,cultural citizenship,culture and smar

249、t citiesART TRENDSExpanding class of ultra-high-net-worth(UHNWI)buyers,new generation and holistic offeringFinancialization:art as a capital assetRisk management,collection management and assetTax and estate assistance,philanthropy and sustainabilityArt-secured lending,social impact investment and f

250、ractional ownership modelsFINANCE TRENDSART&FINANCE45Section 08_ Risk management and regulation0908070605040302010046ART&FINANCE REPORT 2023Section 00_ IntroductionCULTURE Large public museums Private museums Corporate collectors Private collectors Public authorities (country,region,city,etc.)FINANC

251、E Private bankers Wealth managers Family offices Private investors/collectors Art/collectible fund promoters Art insurance companies Art traiding companiesDeloitte Private Wealth UHNWIs&Family OfficesDeloitte already works with many Art&Finance stakeholders across the world and envisions opportuniti

252、es for further collaboration.VISUAL ART SECTOR Artists Companies selling art Digital art companies Art logistics companies Art fairs Art and media companies ArtTech companies Creative industriesDeloitte Private Private companies&PEThe art and finance industry is uniquely positioned at the intersecti

253、on of three interconnected sectors.The Deloitte Private Art&Finance initiative aims to coordinate a transversal multidisciplinary global Deloitte service offering to art and finance stakeholders around the world to facilitate their:1.Art and collectible assets,2.Art and collectible-related projects

254、and business,and3.Cultural initiativesDeloittes Art&Finance practice brings together professionals across disciplines,spanning strategy,regulations,technology,tax,legal,audit,risk advisory and more-to provide comprehensive client solutions.For the past 12 years,we have monitored the development and

255、evolution of the art and finance industry,particularly the role of art and collectibles within wealth management services.Not includedClient entertainment-Internal education-Art sponsoring-Corporate collectionIllustration of art and wealth management servicesACCUMULATING WEALTH growing assets Museum

256、s endowments Art investment Art funds Stock of art business Private Equity in start-ups Financing of art business Social impact investments Fractional investments/STOsPROTECTING WEALTH managing risks Art advisory Valuation Assets consolidation Reporting Art insurance Passive portfolio management Art

257、 collection management Tokenisation Family governanceTRANSFERING WEALTH creating legacy Philanthropy advice Art related&estate planning SecurizationCONVERTING WEALTH TO INCOME creating an income stream Art-secured lendingWealth manager47Section 08_ Risk management and regulation090807060504030201004

258、8ART&FINANCE REPORT 2023Section 00_ IntroductionEndnotes_1 Microsoft Word-New Delhi Leaders Declaration Final Adoption(g20.org)2 Artnets Index for Fine Art(100).3 Artnets Index for Fine Art(100)between July 2022 and July 2023.4 Marc Jones,“Global markets in the first half of 2023:Banks vs the machin

259、es,”Reuters,June 30,2023.5 Art Basel and UBS,The Art Market 2023,2023;Art Basel and UBS,The Art Market 2016,2016.The annual growth rate in global art market sales from 2008 to 2022 is based on data from the 2016 and 2023 report.6 21st edition of the Bain&CompanyAltagamma Luxury Study,November 2022.T

260、he report stated The global luxury market is projected to grow by 21%in 2022,reaching 1.4 trillion7 https:/ UNESCO webpage,G20 agrees first declaration on culture(unesco.org).Last consulted 3 August 2021.9 This is the two-year compounded growth rate between 2021 and 2023.10 This includes new and vin

261、tage luxury collectibles.11 https:/ https:/ https:/ https:/ OpenSea,the biggest NFT marketplace announced in August 2023 that it plans to stop the mandatory collection of resale fees for artists.Starting March 2024,those fees will essentially be tips an optional percentage of a sale price that selle

262、rs can choose to give the original artist.16 https:/www.arcual.art/about-usGALLERY JONATHAN PRINCE49Section 08_ Risk management and regulation09080706050403020100Wealth and the global art market01_BORE BLOCK I JONATHAN PRINCE50ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketPart 3

263、:Regional breakdown96Part 2:Global art market review 66Part 1:Art and collectible wealth overview 57Introduction56Highlights535109080706050403020100VESTIGAL BLOCK JONATHAN PRINCE52ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketHighlights_ Decline in global wealth in 2022:Accordin

264、g to the Credit Suisse and UBS Global Wealth Report 2023,2022 recorded the first fall in net global household wealth since the global financial crisis of 2008.Measured in current nominal US$,total net private wealth fell by 2.4%or US$11.3 trillion.17 The global ultra-high-net-worth(UHNW)population a

265、lso fell by 6%and their combined net worth was 11%lower than in 2021,according to a report18 by Altrata examining the UHNW market.Art market fails to outpace inflation:The anemic 14-year annual growth rate19 of 0.6%in the art market has failed to outpace inflation,with global art market sales shrink

266、ing in real terms since 2008.This signals the overall art market has been unable to attract the attention of the larger high-net-worth(HNW)population and their wealth compared to the global luxury goods industry.Global art and collectible wealth:We estimate that UHNWIs wealth associated with art and

267、 collectibles was US$2.174 trillion in 2022 and predict this figure could grow to an estimated US$2.861 trillion in 2026,due to the increased number of UHNWIs across the world and their increased allocation of wealth to art and collectibles.A small increase in art and collectible wealth in 2023 is a

268、nticipated due to an average 3.8%20 increase in art values between July 2022 and July 2023.21 The growth is also boosted by an increase in overall wealth as world stocks rallied 12%22 in the first six months of 2023.Art and portfolio allocation:Knight Franks The Wealth Report 2023 found a global ave

269、rage of 5%allocated to art and other collectibles.According to this years survey of wealth managers and family offices,an estimated average of 10.9%of their clients wealth is associated with art and collectibles(8.6%for private banks and 13.4%for family offices).23 Art buyers are looking to diversif

270、y in times of uncertainty:The very top end of the art market has been less affected by the economic turmoil,according to a recent report24 by Sothebys and ArtTactic.The US$1 million-plus auction market saw 20.8%growth in 2022,accounting for 74%of total fine art sales(by value)based on sales at Sothe

271、bys,Christies and Phillips.While the higher end(US$1 million-plus artworks)of the impressionist,modern and contemporary auction market saw a 9%year-on-year decline in sales in the first six months of the year,it is significantly lower than the 31%decline in the overall art market.This shows wealthy

272、buyers have continued to focus on the most established artists and high-value works,which they perceive to have a greater store of value in times of uncertainty.The art market slowed down in the first half of 2023 as high-end supply dried up:Overall auction sales at Christies,Sothebys and Phillips w

273、ere down 18.2%year-on-year in the first half of 2023,with fine art sales plummeting by 31%.The drop in fine art auction sales has been largely driven by a much lower supply of trophy lots;only 40 lots sold above US$10 million in the first six months of 2023,generating a combined total of US$932 mill

274、ion,compared to 75 lots in the first half of 2022,with a total sales value of US$2.06 billion.5309080706050403020100 Luxury collectible sales reach new heights in 2022 and could signal new opportunities for the art and finance industry:The growth potential of the luxury collectibles market is eviden

275、t by its auction sales surge over the last two years,reaching a record high in 2022.While the fine art market slowed in 2023,the global auction market for luxury collectibles25 continues to track last years performance,with first-half 2023 sales 1%higher than the first half of 2022.Auction sales are

276、 on target to match or exceed 2022s record levels if this growth continues over the second half of 2023.We expect to see a growing interest in the financialization of luxury collectibles and the potential to tap into the much broader and larger US$1.4 trillion luxury goods industry.Asia drives growt

277、h in luxury collectibles market in 2022:Over the last few years,primary growth in the luxury collectibles market has come from Asia,with Hong Kong luxury collectible auction sales26 up 33%between 2021 and 2022.These account for 40%of total luxury collectibles sales in 2022,up from 25%in 2021.However

278、,Hong Kongs market share in the first half of 2023 fell back to 25%,compared to other locations such as Geneva and New York,which gained market share.The rise of the ultra-high price segment:Evidence of how UHNWIs and billionaires influence the global art market can be seen clearly by the number of

279、works sold in the US$10 million-plus segment over the last eight years,with a particular surge in interest following the 2020 COVID-19 pandemic.The US$10 million-plus price segment accounted for 50%of the share of impressionist,modern and contemporary auction sales27 in 2022,up from 32%in 2020.In th

280、e first half of 2023,the share of the US$10 million-plus market fell to 33%,due to the economic uncertainty and fewer trophy lots on the public auction market.More than 1,500 artists were selling above US$500,000:Although 1,538 artists were represented at the top end of the auction market(artworks s

281、elling over US$500,000)between 2015 and the first half of 2023,there have been only 155 artists in the trophy segment(US$10 million-plus price segment)and 33 artists selling above US$50 million since 2015.The average price28 of the 10 most expensive lots sold at public auction between 2000 and 2015

282、was US$103.5 million,compared to US$147.2 million for the 10 most expensive lots sold between 2015 and the first half of 2023an indication of price inflation at the very peak of the market.Top 100 artists accounted for more than three-quarters of the total auction value:The top 100 artists generated

283、 a total of US$36.2 billion,accounting for 76%of total sales between 2015 and the first half of 2023.This illustrates the importance of this group of artistsaccounting for just over 1%of the total artist populationin driving the overall market sentiment and auction sales One percent of artists contr

284、ol more than three-quarters of art wealth generated:In the past eight and a half years,1%of artists have controlled more than three-quarters of total auction sales.This may explain the art markets anemic growth over the last 10 years.We are currently facing a scenario where a few artists markets are

285、 accumulating disproportionately large amounts of todays art market wealth,with relatively little trickling down to the broader art ecosystem.If we want the art market to grow and direct more wealth toward supporting artists,we need to look at the inherent inequality of the art market today,and exam

286、ine how wealth could be more evenly distributed to build a stronger and more sustainable art sector.Post-pandemic price inflation at the ultra-high end of the art market:Evidence of how UHNWIs and billionaires influence the global art market can be seen clearly by the number of works sold in the US$

287、10 million-plus segment over the last eight years,with a particular surge in interest following the 2020 COVID-19 pandemic.The US$10 million-plus price segment accounted for 50%of the share of impressionist,modern and contemporary auction sales in If we want the art market to grow and direct more we

288、alth toward supporting artists,we need to look at the inherent inequality of the art market today,and examine how wealth could be more evenly distributed to build a stronger and more sustainable art sector.54ART&FINANCE REPORT 2023Section 01_ Wealth and the global art market2022,up from 32%in 2020.I

289、n the first half of 2023,the share of the US$10 million-plus market fell to 33%,due to the economic uncertainty and fewer trophy lots on the public auction market.Top three auction houses account for more than half of the global auction market:Since the pandemic,Christies,Sothebys and Phillips have

290、increased their dominance in the global auction market,accounting for 52%of public auction sales in 2022,up from 45%in 2021 and 40%in 2020.We saw further consolidation and concentration in the auction industry,with Bonhams embarking on an acquisition spree29 in 2022,and reporting in excess of US$1 b

291、illion in sales in 2022.Bought-in rates remain historically low:Since the pandemic,bought-in rates(percentage of unsold lots)have been at an all-time low,with an average of 13.1%of lots unsold versus 20.2%between 2015 and 2020.While the first half of 2023 showed that bought-in rates are on the rise(

292、15.2%),they remain below pre-pandemic levels.Auction guarantees reach new heights in 2022,but are investors getting more cautious?Auction guarantee levels reached a new high in 2022,with US$3.65 billion in guaranteed value(based on hammer value)of lots in the impressionist,modern and contemporary se

293、gment sold during evening sales at Christies,Sothebys and Phillips.This was 18.9%higher than in 2021 and 128%higher than the pandemic year of 2020.Auction guarantees accounted for a record 64.6%of total evening sales value in 2022.In the first half of 2023,auction guarantees accounted for US$1.34 bi

294、llion,down 29.3%from US$1.89 billion for the same period last year but still accounting for 65%of total auction sales.This shows auction guarantees continue to play a pivotal role in managing the current market uncertainty.Auction houses passing risks to third-party guarantors:Between 2016 and the f

295、irst half of 2023,the majority(71%)of lots sold with guarantees were offered with a third-party guarantee,as opposed to 29%of lots with in-house auction guarantees.VESTIGAL BLOCK JONATHAN PRINCE5509080706050403020100Introduction_This section takes a closer look at how current and future trends in gl

296、obal wealth and the global art market are reshaping the landscape and context of the art and finance industry.Over the last 12 years,we have monitored how the art market has adapted to global crises,such as the 20072008 financial crisis and,more recently,the impact of the COVID-19 pandemic.Higher in

297、flation,rising interest rates and slowing economic growth will provide a new and challenging backdrop for the art and finance industry in the coming years.Section 1 is divided into three parts:Part 1_Art and collectible wealth review Part 2_Global art market review We highlight some of the key trend

298、s and developments in the art market over recent years and feature global expert contributions providing valuable insights:INDUSTRY INSIGHTS_Where art,science,space and tech meetby Mariam BrianCEO and Founder of Holo ArtPart 3_Regional breakdown In Part 3 we have included a specific focus on the art

299、 market in Japan thanks to the following two contributions:INDUSTRY INSIGHTS_Japanese art scene trends 2023by Kiyohiko NagaiManaging Director,New Business Development+FSI Competency,Risk Advisory,Deloitte Japanby Ayari MimaSenior Staff,Deloitte JapanDemystifying the Japanese art marketby Josephine A

300、yako YamadaHead of Innovation&Governance,CEO Office,Corporate PlanningStartbahnby Katsunori TakahashiHead of Private Banking,Sumitomo Mitsui Banking CorporationImpact of import VAT on art circulation within Europe and implementation of new Directive(EU)No.2022/542by Andrea Sirio OrtolaniMember of th

301、e Board of Apollo Groupby Matteo RumorCustom duty expert,Deloitte Italyby Davide BleveTax Partner Deloitte and member of the Art&Finance Italian Team56ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketTORUS 340 JONATHAN PRINCEArt and collectible wealth overview_Part 1_After the decl

302、ine in wealth in 2022,the outlook for 2023 looks more positive as equity markets recoverMacroeconomic and geopolitical headwinds in 2022 resulted in lower returns on financial investment that,combined with currency depreciation against the US dollar,were the main factors in 2022s decline in global w

303、ealth,according to the Credit Suisse and UBS Global Wealth Report 2023.Last years 3.4%household wealth growth was the lowest rate since the global financial crisis of 2008,while total net private wealth tumbled by 2.4%,or US$11.3 trillion.30 Another report by Altrata underlines the decline in the nu

304、mber of UHNWIs in 2022,noting there was a global population of 392,410 UHNWIs in the first half of the yeara fall of 6%.While the net worths of HNWIs and UHNWIs were historically high in recent years,2022 saw a drop in overall wealth to US$41.8 trilliona decline of 11%.31 Even among the worlds wealt

305、hiest,the impact of the geopolitical and economic environment has been felt,with the number of billionaires according to Forbes falling from 2,668 in March 2022 to 2,640 in March 2023,and their total worth now at US$12.2 trillion,compared to US$12.7 trillion in March 2022.The United States still has

306、 the highest number of billionaires,with 735 individuals worth a collective US$4.5 trillion.China(including Hong Kong and Macau)has the second-highest number of billionaires,with 562 controlling around US$2 trillion in wealth.India follows in third place,with 169 billionaires worth a collective US$6

307、75 billion.32 A recent report by Boston Consulting Group(BCG)estimates that the value of global financial wealth shrank for the first time in 15 years in 2022,declining by 4%to US$255 trillion.While 2022 saw a relatively significant drop in financial wealth figures,its expected that the decrease wil

308、l be relatively brief,with 2023 seeing a potential 5%rebound in total global net worth to US$267 trillion.While financial wealth shrank in 2022,the value of real assets,including art and real estate,was US$261 trillionan increase of 5.5%.33 The positive trend in real asset value can also be seen in

309、the global art market,with overall auction sales at Christies,Sothebys and Phillips increasing by 12.9%34 in 2022,including a particularly strong performance at the very top end of the market.According to a recent report by Sothebys and ArtTactic,35 the US$1 million-plus auction market saw 20.8%grow

310、th in sales in 2022,accounting for 74%of total fine art sales(by value)based on sales at Sothebys,Christies and Phillips.This shows that wealthy buyers have continued to focus on the most established artists and high-value works,which they perceive to have greater stores of value in times of uncerta

311、inty.5709080706050403020100This finding is supported by a recent Art Basel and UBS survey,36 which found HNW collector respondents were spending more in 2022 than they had before the COVID-19 pandemic,with the proportion spending in the US$1 million-plus range increasing from 18%to 31%.The art marke

312、t slowed in the first half of 2023,with overall auction sales 18.2%lower than in the first half of 2022.Even the higher end(US$1 million-plus artworks)of the impressionist,modern and contemporary auction market saw a year-on-year decline in sales of 9%in the first six months of 2023.It is important

313、not to conflate a fall in auction sales value with a fall in prices.The fall in auction sales has been largely driven by a lower supply of top-end lots,with only 40 lots selling above US$10 million in the first six months of this year,generating a combined total of US$932 million.This was significan

314、tly lower than the 75 lots that sold above US$10 million in the first half of last year,with a total sales value of US$2.06 billion.This could indicate that sellers are more hesitant to sell their trophy pieces in a softer market,which is currently impacting total auction sales directly,particularly

315、 at the top end of the market.However,other art market segments have continued to grow this year.Sothebys,Christies and Phillips have seen a 4%year-on-year increase in lots sold in the first half of 2023,and segments such as jewelry and watches were up 21.4%from the same period last year.Other aucti

316、on houses(e.g.,Bonhams)that cover a much broader segment of art and collectibles saw sales grow 32%in the first six months of this year.We estimate a slight increase in art and collectible wealth in 2023,as a result of an average 3.8%37 increase in art values between July 2022 and July 2023.38 The g

317、rowth is also supported by a rise in overall wealth,as world stocks have rallied 12%39 in the first six months of this year.Art features more prominently in a defensive wealth management strategyBased on our surveys and findings from external reports on global wealth trends,there seems to be a clear

318、 change in how HNWIs are currently thinking about investments,particularly leaning toward value as opposed to growth.Their focus has shifted to preserving wealth through diversified investment strategies,which is also one of the main motivations expressed by wealth managers in this years Art&Finance

319、 survey.This is why it is logical that the art and collectibles market is part of a wealth management service offering,with diversification and store of value as the main motivations(see Section 2).The increasing interest in the financial aspect of art ownership implies an evolving relationship betw

320、een traditional forms of art collecting toward a more sophisticated,financial approach to ownership of art.Art,collectibles and portfolio allocations The UBS Global Family Office Report 2023 found that family offices allocated 2%to arts and antiques,on a par with gold and precious metals.40 Knight F

321、ranks The Wealth Report 2023 noted a global average of 5%allocated to art and other collectibles.According to this years survey of wealth managers and family offices,a significant share of clients wealth is associated with art and collectibles.41 We estimate a conservative average of 10.9%for wealth

322、 managers(8.6%for private banks and 13.4%for family offices).This higher allocation of wealth to art and collectibles was also echoed by The Art Basel and UBS Global Art Market Report 2021,42 where HNW collectors were reported to have a relatively high proportion of their overall portfolios of wealt

323、h invested in art,with 64%reporting an allocation of over 10%.The report also highlighted that Generation Z collectors had the highest average share of wealth dedicated to art,with over a third having an allocation of more than 30%,higher than both their millennial(27%)and Generation X(24%)peers.ave

324、rage share of wealth dedicated to art,with over a third having an allocation of more than 30%,higher than both their millennial(27%)and Generation X(24%)peers.Art and collectible wealth 20202025In this table,we have assumed that UHNWIs wealth(in US dollars)will grow at the same rate as the expected

325、increase in the UHNWI population according to Knight Franks The Wealth Report 2022.43 We have used an average global allocation to art and collectibles of 5.2%of financial(or investable)wealth(not including non-financial assets)in 2022 to estimate the average allocation we could expect in five years

326、 time.Based on our own findings from wealth managers,as well as findings from other reports,this is likely to be a conservative estimate of global art and collectible wealth.58ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketTable 2:Global art and collectible wealth 2022-2026Source

327、:Altrata and Knight Frank All figures are in US$billionNorth AmericaLatin AmericaAfricaEuropeMiddle EastAsiaPacificOverallTotal UHNWI wealth in 2022 14,545 1,287 355 10,561 2,656 11,854 567 41,825 Total UHNWI wealth in 202618,632 1,619 394 13,191 3,288 15,730 755 53,609 Regional allocations to art a

328、nd collectibles6.0%6.0%3.0%5.0%3.0%5.0%7.0%5.2%Total UHNWI collectible wealth in 2022873 77 11 528 53 593 40 2,174 Total UHNWI collectible wealth in 20261,104 97 13 652 67 874 54 2,861 Total art and collectible wealth US$2.174 trillion allocated to art and collectibles(based on a 5.2%allocation)in 2

329、022$1,104North AmericaMiddle EastAfrica$11bn2022$13 bn2026AsiaEuropePacific$873 bn2022 bn2026$528 bn bn2022$652 bn bn2026$402022$542026$53 bn2022$67 bn2026Latin America$77 bn2022$97 bn2026$874 bn2026$593 bn202240.1%marketshare 202224.3%marketshare 20221.8%marketshare 20223.5%market share 20220.5%mar

330、ket share 20222.4%market share 202227.3%market share 20225909080706050403020100Based on these calculations,we estimate that UHNWIs wealth associated with art and collectibles was US$2.174 trillion in 2022.We project that,in 2026,this figure could grow to an estimated US$2.861 trillion.This projectio

331、n assumes that the growth of art and collectible wealth will track the estimated regional growth in the global wealth population.However,as previously mentioned,the growth in annual art market sales over the last 10 years has failed to keep pace with increases in global wealth.We may see a small inc

332、rease in art and collectible wealth in 2023,on the back of a 3.8%44 increase in art values between July 2022 and July 2023.45 Nonetheless,this could be offset by an increase in overall wealth,as world stocks rallied 12%46 in the first six months of this year.Therefore,our growth estimate may be over

333、ly optimistichowever,increased access to new types of art investment products could signal a closer alignment between wealth and art market growth in the future.When we look at the wealth associated with art and collectibles from UHNWIs,it is important to consider how it relates to other financial assets.Compared with the total assets under management(AUM)of the asset management industry,art and c