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Deutsche Bank : A new avenue of opportunity

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08/10/2017 | 02:24 am

The art market has evened out in recent years. The European Fine Art Fair (TEFAF) has reported a growth of $1 billion between 2015 and 2016, with the Middle East demonstrating strong growth.

WHY ART?

Art is a good investment for two reasons; it is a diversification of assets and it can offer strong returns.

Some of our clients have turned to art, either the funds or advisory, as a method of diversifying their investment portfolio. Funds are popular here especially when the client has little interest in art or do not want to approach their own collections from an investment angle. Investing in art is a good method of diversifying your assets because unlike property and finance art doesn’t correlate with global politics.

We also have clients coming to us because they have found that a huge amount of their wealth is tied up in their art collections and they want to protect this, they want to add value to their collections and need guidance.

For companies, it can be a slightly different angle, a good art collection can help with a company’s brand and positioning, look at the way Deutsche Bank has built a corporate collection and positioned themselves into the art market by sponsoring Frieze Art Fair. Bank Audi in Lebanon is an example of a strong corporate collection in the Middle East.

AFFINITY IN THE REGION

We consider the UAE a very dynamic emerging market that welcomes innovative ideas. As a firm we allocate time, resources and expertise to the region in order to raise our profile as well as awareness. With time we identified our target audience and were able to create relationships with them via our local office. The key is having a presence in the region to nurture and maintain client relationships as well establish strong brand recognition.

This market has been very receptive to the idea of investing in art. Our target audience are both seasoned and young collectors, and both benefit greatly from working with an advisor.

POTENTIAL

The art market has demonstrated its strength in recent years, there seemed to be a brief downturn in 2016 but this proved to be the market evening out after a boom. We are seeing a huge increase in HNW individuals and families becoming major players in the market with the support of their advisors. There is a demand for art advice and guidance as more collectors release the potential value of their collections, we are finding that more financial institutions are coming to us for guidance.

Naturally we have seen the impact of this in the Middle East. The Middle East has great potential for growth, there are some very sophisticated collectors in the region who are focusing their efforts on local artists.

A good art collection can help with a company’s brand and positioning. Look at the way Deutsche Bank has built a corporate collection and positioned themselves into the art market by sponsoring Frieze Art Fair. Bank Audi in Lebanon is an example of a strong corporate collection in the Middle East.

Philip Hoffman, Founder and CEO of The Fine Art Group

About The Fine Art Group

The Fine Art Group was founded by Philip Hoffman in 2001 as a new endeavour to help clients approach the art market with a view to investing as well as collecting. We have grown from operating one long-term investment fund to advising eight subsequent funds, offering to private collector’s expert art advice, collection management and art financing.

Source: The Fine Art Group

Middle East take up of the fine art industry

• TEFAF: Total global market growth between 2015 ($44 billion) and 2016 ($45 billion) and 1.7 per cent is from the Middle East, showing strong growth.

• Art Tactic Global Art Market Outlook 2017: Modern and contemporary Market auction trend 2015 to 2016—Middle East has seen an increase of 40.7 per cent.

UBS: Middle East auction buyers account for two per cent of sales; it has a six per cent share of global wealth, with a rise in number of top 200 collectors in Middle East.

Source: The Fine Art Group

(c) 2017 CPI Financial. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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