All around the world, the fine art investment market is attracting more and more young collectors. Whether they are wealthy professionals looking for a way to invest their income, heirs to their family’s extensive collection, or simply lovers of art themselves, young collectors are flocking to galleries and auctions for the following reasons.
According to the US Trusts’ 2017 Insights on Wealth and Worth, High Net Worth Individuals (HNWIs) under 50 years old are more likely to view art as an investment, while those over 50 years old are more likely to consider art as a part of their identity and lifestyle.
This may be driven in part by inheritance trends. Nearly a quarter of Millennials surveyed expect to inherit an artwork, and this may make them more likely to consider art as a part of their overall investment portfolio.
As a result, Millennials are most likely to collect art with a view to investment value, while Baby Boomers are most likely to collect art purely on the basis of personal enjoyment.
Despite a strong interest in financial returns, younger investors also seem to be more interested in finding ways their wealth can have a positive impact on the world.
The Global Impact Investing Network defines impact investors as having “the intention to generate social and environmental impact alongside a financial return.”
According to the US Trust, a sizeable 52% of Millennials are reportedly interested in investing for impact, compared to just 37% of Gen X and 29% of Baby Boomers.
Fine art investment can give individuals the ability to support emerging artists, purchase ethical assets and display beautiful artworks in the home. In addition, 38% of Millennials admit to enjoying the feeling of being part of an artistic community, and art investment can introduce individuals to a fascinating world of exhibition launches, charity events and more.
Unsurprisingly, younger investors are far more likely to take on higher risks in order to see higher potential returns. In fact, 70% of Millennials surveyed said they were looking to generate income from investments, rather than long-term capital appreciation.
This isn’t such a big surprise – after all, younger investors are far more likely to be working towards more immediate financial goals, revolving around milestones such as buying a home, funding a business or starting a family.
However, a significant 53% of surveyed Millennials were interested in adding tangible assets to their investment portfolios, with diversification a key draw. In fact, 30% of surveyed Millennials see art as a safe haven from volatile financial markets. Perhaps fine art investment isn’t such a high risk market after all, when falling oil prices, stock market instability and negative interest rates are taken into account.
Madelaine D’Angelo argued recently in the Huffington Post that younger generations of art collectors are fuelling technological trends. Smartphones and connectivity is bringing the art world into everyone’s pocket, and mobile apps have made the art world more accessible both practically and theoretically.
Collectors can read up on artists, check past sales records, and set up alerts to be notified whenever an artist of interest appears at auction. Far from the fine art investment world being exclusive and intimidating, it is now swiftly becoming more open and accessible than ever before.
As a result, artists and galleries alike need to make sure they are properly promoting their works online. Maddox Gallery works with Artsy to make it as easy as possible for art collectors around the world to view, research and purchase art online.
Emerging art offers the biggest rewards
In the case of young collectors looking for investments with high return investments, emerging art can be a very rewarding asset.
Maddox Gallery works with a roster of talented emerging artists. We share contemporary works by artists tipped to soar in value, and educate visitors on art investment, hanging, storage and even resale. By providing expert support across the entire art investment cycle, we’re helping Millennials and others to enter the world of fine art investment.
If you want to learn more about investing in contemporary art, take a look at ‘The Six Key Factors to Consider When Making an Art Investment.’ To find out more about any of our represented artists, please contact Maddox Gallery. Our Sotheby’s-trained art consultants will be happy to provide expert advice.
Written by James Nicholls, Chairman, Maddox Gallery.