Art Market – from transformation to revolution

 September 30, 2019

Adriano Picinati di Torcello, Director at Deloitte Luxembourg © Deloitte Luxembourg

Art and finance, art and money are seemingly contrasting issues, lying quite far from each other. They however are interlinked and necessarily go hand-in-hand, especially as new creative ways and alternative business models are being born in the art ecosystem of today.

The ecosystem of the art world is a very heterogeneous one, involving many actors, individuals, organizations, systems that interact and form new ways of approaching art and culture. To gain a clearer view and a better understanding of how these two seemingly contrasting worlds - art and finance - interact and how they are part of a bigger picture of transformation, leading to „revolution“ we approached Adriano Picinati di Torcello, Director at Deloitte Luxembourg and coordinator of the Art & Finance activities within the Deloitte global network.

He has a clear overview and deep understanding of both worlds of art and finance. He moves at ease between these two worlds and after a decade of experiences of bringing awareness into the subject of art and finance through Deloitte Luxembourg, his thoughts are just as transformational as the subject itself.

Shedding light to this theme is essential in order to move within the art ecosystem and not just for art related businesses and cultural institutions, but also for those who create, the artists themselves. The first question to raise is how do we define these two very contrasting fields of art and finance?

Adriano Picinati di Torcello, Director at Deloitte Luxembourg © Blitz Photo Agency

Based on the many years of experiences and insight into the art ecosystem, Picinati di Torcello defines three main pillars or sectors, which are important to clarify in order to demystify the issue of money, especially in relation to art and culture. The transformation that is taking place in the art ecosystem is evident in all these sectors. The first pillar is the financial one, which is related to wealth and collectibles.

Here we find the wealth managers and banks taking care of the collectibles of the UHNWs, protecting the wealth allocated to art,“ describes Picinati di Torcello.

The second pillar is related to art businesses, such as art auction houses and galleries. This sector includes everyone involved in the trading and production of art. There is a new type of business that is evolving, which are the art and technology companies and start-ups that are aimed at improving the art market. They are related to activities such as blockchain, artificial intelligence, online trading marketplaces. This sector of art business has an active role also in the creative industry as a whole. The most obvious example is when brands try to collaborate with the art world, making their products stand out with art elements.

The third pillar is the cultural sector with public institutions. According to Picinati di Torcello, the increase of importance of this sector can be seen by having more and more countries, governments measuring the culture in terms of GDP impact.

Governments are also beginning to understand that culture is an economic driver for other sectors, the most obvious one is tourism of course, but it also has an impact on real estate prices, the quality of life, the attractiveness of a city, to mention but a few. Culture is something to almost brand a nation with,“ explains further Picinati di Torcello.

As the definitions become clearer it becomes even more understandable why finance is crucial for all three sectors in order to support their growth and sustainability and why it is important to create some kind of portal that connects them.

Deloitte - 11th A&F Conference © Blitz Photo Agency

According to Picinati di Torcello, one of the main challenges related to art and wealth management is how to bring money from the wealthy to the cultural sector to support it. As an example, for many years philanthropy has been the way this has been fulfilled. The relationship between the private and the public around finance has greatly transformed recently and a great implication for the cultural sector has been the development of social investments, corporate social responsibilities around culture.

In order to develop the ideas and activities of the art business sector – which includes galleries and art tech companies – we can see that there is potential for investors. It is not only about financial returns, it is about the growth of the company and its future profitability,“ says Picinati di Torcello.

Read further our exclusive interview with Adriano Picinati di Torcello in the 2nd Issue of the Secrets of Art Magazine.

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