1. LONDON - Ongoing concerns about the impact of the UK’s withdrawal from the European Union (EU) have prompted the organisers of Frieze to draw up a list of recommendations designed to “help maintain the best possible conditions” for the art world. In an open letter, Victoria Siddall, the director of the Frieze fairs, aired her concerns about the impact of Brexit on galleries that are based in the UK or exhibit at fairs in London. Siddall shared her proposals with the Creative Industries Federation, an arts lobbying organisation, as part of a larger discussion of how the government should respond to the needs of the cultural sector.
Representatives of Frieze have “spoken to a range of people working in galleries”, Siddall says, and have formulated a plan of action with four recommendations. These include maintaining the current rate of VAT (5%) on works imported into the UK; continuing the free circulation of works between the EU and the UK; and maintaining the temporary admission procedure, which ensures that works imported temporarily for events such as fairs and exhibitions are exempt from import duties and VAT.
A major issue, Siddall says, is continued freedom of movement. “It is critical that non-UK nationals continue to be able to work in the UK. If the visa requirements must change, one solution is a specialist category providing artists and art workers with fast-track entry for specific events,” she says.
2. NEW YORK Dealers and auction houses are scrambling to find top paintings by Jean-Michel Basquiat to meet the surge in interest in the late artist’s work, following the record $100.5m auction of his untitled skull painting at Sotheby’s New York in May.
The sale, to the former Japanese rock star turned e-commerce entrepreneur Yusaku Maezawa, has “significantly increased demand for Basquiat”, says Joe Nahmad of Nahmad Contemporary, which is offering a yellow canvas with anatomical renderings and text entitled Early Moses (1983) for $8.5m at Frieze Masters. “I’m getting more requests for Basquiat than I’ve ever had before,” he adds. The interest is coming from the US and Europe, but also from collectors in Asia, South America and the Middle East. “New collectors who want to buy their first major painting are looking for Basquiat.”
The artist’s bold, brightly coloured canvases, which merge elements of street art, popular culture and disparate other sources, resonate with younger generations. Basquiat has been embraced by the most influential musicians of our time, as well as taste-makers on social media. “I’m the new Jean-Michel,” declared hip-hop mogul Jay-Z in his single Picasso Baby, while Maezawa announced his $100.5m purchase on Instagram.
A strong part of the appeal is the myth of the destitute, self-made street artist who found fame through sheer talent and force of will. This version of Basquiat’s life overlooks the fact that he came from a well-off family: his father was an accountant, born in Haiti, and his mother was of Puerto Rican descent. The artist had an expensive private education and was trilingual in English, Spanish and French from the age of four.
It’s all about 1982
Works from 1981 and 1982 are particularly prized by the market: the top ten auction prices for the artist are for paintings from those two years. It was in the early 1980s that Basquiat transitioned from being a graffiti artist to a studio-based one.
“He was given space by the gallerist Annina Nosei and was able to create fully realised canvases with the same intensity and vitality as his street art,” says Katharine Arnold, the director and senior specialist in charge of post-war and contemporary art at Christie’s, which is offering the artist’s Red Skull (1982) in its evening sale this Friday 6 October. The work has a low estimate “in the region of £12m”, according to the auction house. (Proceeds from the sale will go to KIPP schools in New Jersey, a network of free, public charter schools with no entrance requirements and a record of high performance).
2. NEW YORK Ultra-rich will spend $2.7 trillion on art by 2026 says Deloitte
Art & Finance Report also predicts rising art market volatility and a need for tougher regulation to increase trust
Sarah P. Hanson
8th November 2017 12:32 GMT
Wealth managers, collectors and art professionals all voted overwhelmingly in favour of self-regulation over government controls Deloitte
The fifth Deloitte Art & Finance Report, released today at the firm’s conference in Milan, forecasts that the ultra rich will spend $2.7 trillion on art by 2026. It also raises questions over trust and transparency in the art market, as 48% of collectors say lack of standards is a major concern, yet found that collectors, wealth managers and art professionals were overwhelmingly in favour of self-regulation over government intervention.
The authors, Adriano Picinati di Torcello, the director at Deloitte Luxembourg and global art and finance coordinator, and Anders Petterson, the managing director of the research firm ArtTactic, observe an "increasing convergence between collectors, art professionals, and wealth managers on the role of art in a wealth service offering, as well as a convergence of different stakeholder initiatives when it comes to improving art market transparency.”
Alongside a global market overview, showing strong growth for African art and a slowdown in Southeast Asia, the report’s core offering is the Art & Wealth Management Survey. This year it queried 69 private banks (including 27 family offices), as well as 155 art professionals and 107 international collectors. Additional data came from auction houses, art funds, and art trusts, though in many case this is limited to publicly available information.
Not only is art increasingly viewed as an investment, the survey found, it is also considered a “lifestyle” product: 63% of collectors said that social value was their primary reason for buying art. However, unlike museum patrons of yore, just 5% intend to donate their collections to institution, while 67% will pass to their heirs.
Half year sales for 2017 at Christie’s, Sotheby’s, and Phillips are up $1.08bn on 2016, yet according to ArtTactic market confidence declined Deloitte
The market's handshake-agreement economy still poses a problem as art is increasingly seen as an asset class, putting off banks and lenders from entering the market. Seventy-five percent of wealth managers decried the art market’s lack of transparency, and 65% said the unregulated nature of the market “remains a key hurdle”. Although new money-laundering rules coming into force around the world may force more disclosure, issues around risk, liquidity, and valuation remain.
Undisclosed conflicts of interest in art transactions are of concern to 65% of wealth managers and 69% of art professionals. Furthermore, questions of authenticity, provenance, and attribution vex both sides, with 83% of wealth managers and 81% of art professionals deeming these as the greatest risks to the art market.
The report identifies several trends. One is a convergence of the auction (secondary) and dealer (primary) markets in the online sphere, as platforms like Invaluable and Artsy diversify their income streams to stay competitive. In parallel, the increasingly sophisticated analytics available to parse the growing pool of data is “is an important development and could contribute toward improving transparency, valuation accuracy, and risk management of art-related wealth”, says the report.
Another section points to an apparent paradox of the 2017 art market. Although the private market is healthy and sales at Christie’s, Sotheby’s and Phillips have picked up by $1.08 billion, compared with the same time last year, market confidence (as measured by ArtTactic’s “confidence indicator”) declined 13.4% during the first half of the year. While that skittishness was surely the product of many factors–including geopolitical unrest and the auction houses’ renewed reliance on financial guarantees to win prime material–the report’s authors write, “the bigger question is whether we are starting to experience a shift in the way that the global art market behaves”, and ask: “Could art market volatility be set to increase as art buyers become more investment-oriented and increasingly amenable to short-term investment horizons?”
The answer may depend on the attitude of the world’s ultra rich population–those with a net worth of more than $30m—whose ranks are expected to swell by 43% in the next decade.