A glittering gathering of the world’s wealthy is expected to descend on Miami today for the VIP opening of the tenth edition of Art Basel Miami Beach. The appetite for art—and early access to it—is growing: Miami’s mother fair, Art Basel, will double its VIP hours in Switzerland next June, replacing one of the public days with a second private view. In October, London’s Frieze Art Fair added an extra preview hour each day.
It is no coincidence that the ranks of the rich are swelling across the world. The number of millionaires grew by 8.3% to 10.9 million in 2010. They harbour an estimated total of $42.7 trillion, which is a 9.7% rise on the previous year and exceeds the high estimate before the financial crisis—$40.7 trillion in 2007. Those worth $30m or more in investable assets (excluding primary residence, collectibles and consumables) increased 10.2% in number and 11.5% in wealth, according to the latest World Wealth report, produced by Capgemini and Merrill Lynch Global Wealth Management.
The cliché is that, having bought property, stocks and shares, and luxuries such as sports cars and jewels, the wealthy often turn their attentions to art. Is the recent surge in art’s popularity related to the rise of the rich and their desire to diversify their financial holdings? “Yes, we have collectors who have said as much, particularly since 2008, particularly people in the financial industry,” says Lucy Mitchell-Innes of Mitchell-Innes & Nash (C9), who is the president of the Art Dealers Association of America. “Many collectors see art along the lines of the luxury goods business, with investment potential.” Today’s capricious stock markets and fluctuating currencies are benefiting the art market. “People want to take their money out of Wall Street and put it into hard assets such as art,” says Christophe Van de Weghe (Van de Weghe Fine Art, D6), a secondary market dealer. Unlike boats or cars, which depreciate the minute they leave the showroom, art is a potentially resilient investment. “It is easier to have ten Damien Hirsts than to have ten yachts… besides, your yacht becomes more interesting with a Damien Hirst on it,” says the Mexico-based collector César Cervantes.
“Art has resoundingly become more fashionable. We’ve all become much better at marketing our wares,” says Oliver Barker, the deputy chairman of Sotheby’s Europe. Equally alluring is the “art party scene… many VIPs are just looking and having a good time,” says the Miami-based collector Rosa de la Cruz. But “there is [also] a broad cultural interest in contemporary art that was not there ten or 20 years ago,” says Gabriel Pérez-Barreiro, the director of the Colección Patricia Phelps de Cisneros. “The [area of the] market that is growing like crazy is in contemporary art. One of the factors is the global art tourism phenomenon—it’s difficult to get into MoMA these days.” The educational feel-good factor is important, too, says Marc Spiegler, the co-director of Art Basel, who says “good art makes you see the world differently”.
Although headlines have focused on emerging economies such as Brazil and countries in Asia, the bedrock of the art market still rests on European and American foundations. “Places like India, the Middle East and China are interesting in terms of the speed with which the markets are growing, but the total volumes of sales are not even close to traditional markets,” Spiegler says.
It is difficult to separate the discussion from the wider economic and political issues, says Pérez-Barreiro. Countries such as Brazil are powering forwards, but their distribution of wealth is different. “In the US and Europe, there is great pressure on the middle class. In Brazil, where there was always a huge wealth disparity, the policy now is to create a larger middle class,” he says. This has less impact on the top tier of the art market. The growing middle classes may be buying art, but they are “probably buying further down the chain”, he says.
Nonetheless, the world is changing. Art collecting is rooted in cultural, social and economic value systems in the US and Europe, and those regions remain among the richest. “I do not agree that the art market needs to be saved by the Chinese,” De la Cruz says. However, according to Capgemini, the number of millionaires in Asia-Pacific rose 9.7% to 3.3 million last year. Those hoping that the Chinese will eventually buy Western art include Art Basel, which will hold its first Asian fair (17-20 May 2012) following the acquisition of a 60% stake in Asian Art Fairs, the owner of ArtHK, by MCH Group, the owners of Art Basel and Art Basel Miami Beach.