Evolving culture and developing collections -- UNFOLD Art Xchange explores Art as an asset class. Is Fine Art a good investment? And what determines changes to prices in the Art Market?
30 participating cities and 18 countries across the globe
One of the recent events Maecenas was invited to was the UNFOLD Art XChange, where Maecenas CEO, Marcelo Garcia Casil, participated as a keynote speaker and panelist. Held in the prestigious Five Palm Jumeriah in Dubai, UAE, the forum brought together art market experts and industry specialists from 18 countries around the globe.
ART AS AN ASSET CLASS
Over the years, many compelling arguments have already been made as to why art is a covetable asset class, and a desirable part of a well-balance investment portfolio. Questions as to whether art had the potential to outperform other equities in the long-run have been definitively proven. Historically presenting little financial risks to buyers, and providing adequate liquidity through asset-secured lending.
Now, the wealth management industry is ripe for disruption, and undergoing a significant transformation. With global financial markets characterised by volatility, traditional investment avenues have been eclipsed by wealth managers, accredited investors, and High and Ultra High Net Worth Individuals (HNWI and UHNWI) -- all of whom are increasingly seeking alternative assets to diversify their substantial portfolios.
Recognising the growing trend towards art as an alternative asset, the inaugural edition of UNFOLD Art XChange integrated topics on Art, Finance, Wealth & Risk Management into their Art Talks: Evolving Cultures, Developing Collections.
Panelists speaking at the UNFOLD Art XChange in Dubai
WHAT DOES THE RESEARCH SAY ABOUT ART & WEALTH MANAGEMENT?
Research among wealth managers and private banks attests to art’s developing role. The Deloitte Luxembourg and ArtTactic Art & Finance Report 2017 reveals that the recent survey shows an increase from 78% in 2016 to 88% in 2017 of wealth managers saying that they think art and collectibles should be included as part of the wealth management offering, the highest registered reading since the launch of the survey in 2011. In response to this growing trend, many private banks and financial institutions have also developed art advisory, art lending and art investment services as part of their offering.
Although there are fashionable aspects about buying art, for an increasing number of HNWIs, art and collectibles are playing a more significant role in their lives and is accounting for a larger share of their overall wealth, a trend that is forecasted to continue in the next 10 years. In addition to these financial attributes, there are also strong emotional and social aspects associated with buying and owning art-motivations that wealth managers are realising could be harness and cultivated more effectively, ultimately resulting in a stronger and more sustainable client relationship.
Having previously worked at a number of large global banks, Marcelo was invited to weigh in on the topic of fine art as an asset class at this prestigious event. Drawing on his wide-ranging experience in designing and building large-scale enterprise-grade systems with a focus on investment banking and financial solutions, Marcelo has specialised in blockchain and financial technology, primarily in areas covering tokenisation of assets and new capital markets. This is what spurred him to see the lacuna in the art market and to develop the Maecenas trading platform.
MAECENAS - THE FIRST BLOCKCHAIN PLATFORM THAT DEMOCRATISES ACCESS TO FINE ART
Maecenas CEO, Marcelo Garcia Casil, speaking at UNFOLD Art XChange
The global art market, with an estimated $3 trillion of art value in storage, has been warming to the potential of cryptocurrencies, partly due to blockchain's dual ability to establish the provenance of works of art and reduce the reliance on brokers and other middlemen.
The soon-to-be-launched platform democratises access to fine art investments by dividing paintings into fragments, allowing investors to trade can trade in these painting shares. “It’s just like you buy a share in a company. In a way, Maecenas will be the NASDAQ of fine art investment.” says Casil. "We want to make fine art accessible for everyone. The old auction houses like Christie's and Sotheby's have controlled the art market for centuries, so we think the opportunity for disruption is huge."
Investors, who ordinarily wouldn't be able to afford multi-million-dollar works of art, will be able buy shares or units in the work. They will then be able to sell these units later in the marketplace. Each transaction is recorded cryptographically on the Ethereum blockchain.
The trading platform also brings liquidity to the product. You can now own a piece of a Picasso. This wasn’t possible before blockchains. Galleries are already lining up to sell their art on the Maecenas platform because they immediately get access to a crowd of investors.
Any kind of art can be auctioned whether it’s paintings, sculptures or photographs. In the future, a similar tokenization model could be used for all kinds of valuable and tangible assets such as collectible cars, vintage wine, precious gems and other high-worth asset classes, opening access luxury investments to the masses. Could Maecenas be the future of all high net worth investments?