Art dealers prefer to conduct their business behind closed doors. To still create transparency, UBS relies on an Irish economist.
Art dealers and their wealthy clients naturally value discretion. An example of this is the world's most expensive painting, «Salvator Mundi.» While the price of the artwork is known, its whereabouts remain unknown.
As much as this confidentiality makes sense on an individual level, it complicates the business for banks that also advise their clients on art investments. This gap has been addressed by the Irish economist Clare McAndrew since 2002.
Increasing Effort
In an annual report funded by UBS and Art Basel for the past three years, she determines the size of the global art market. While the market turnover was around $21 billion at the beginning of the millennium, it had already surpassed $67 billion in 2018.
As reported by the «Financial Times» (article behind a paywall), McAndrew's workload has increased with the market. Initially, she and her then-boss extrapolated the total based on phone information from about 100 dealers. Now, she sends a survey to 6,500 art dealers.
Mood of the Wealthy
Their responses, along with data from 5,000 auction houses, form the basis of the report. However, less than 20 percent of the queried dealers respond, even though many of them use the information in the report for their purposes.
For banks like UBS, McAndrew's insights are relevant beyond wealthy art buyers. The report paints a picture of the mood of those individuals who control significant portions of global wealth.
The economist's silent acknowledgment to the «Financial Times» journalist's question about whether less revenue was generated at auctions in 2019 is, therefore, not just a signal for the art market but for a broader economic context.
