Wei Wu

Date of Award

2024

Document Type

MA Project - Restricted Access (SIA Only)

Project Type

MA Project - Business Plan

Degree Name

Master of Arts (MA)

Department

Art Business

First Advisor

Zhang Jin

Abstract

The burgeoning growth of the art market has been positively tied to the rapid
development of the U.S. and European economies since the 1980s. Concurrently, art finance has progressively emerged as a significant component within the financial investment domain. Notably, art-based financial instruments, such as art funds, have ascended to a position of prominence, constituting one of the primary investment categories alongside stocks and real estate. Art financial products offer investors a means to diversify their investment portfolio, effectively mitigating the operational risks inherent in stock and real estate ventures. Moreover, these instruments provide a relatively stable avenue for appreciation in value over time. Within the United States and major European nations, the spectrum of art finance-related services encompasses a range of offerings, including investment counseling, wealth accumulation strategies, preservation, and avenues for asset appreciation. In its 2021 Art Finance report , Deloitte states that "the role and value of art in wealth management strategies and services has changed significantly over the past decade. The question is no longer whether art should be part of wealth management services, but how to implement them more effectively." Deloitte emphasizes the transformative shift in the role and significance of art within wealth management strategies over the past decade. The focus has shifted from deliberating whether art should be part of wealth management services to honing more effective implementation strategies. Art finance brokers have emerged as entities that possess a nuanced understanding of art, surpassing that of financial institutions while wielding financial acumen superior to traditional art organizations. They demonstrate a heightened capability to proficiently and with elevated quality advocate for the value and role of art within financial wealth management. China’s art finance industry currently stands at a juncture, necessitating further innovation and profound exploration. The post-epidemic era manifests certain defining characteristics: First, the prevailing "asset drought" and the decline in capital's rate of return are evolving into the new normal within the developmental landscape. Second, the landscape of wealth management exhibits a discernible trend towards diversification. Third, while the capital market presents structured opportunities encompassing stocks, bonds, and traditional domains like real estate investment, a notable absence of involvement from the traditional financial sector still needs to be made. Fourth, a palpable demand exists for the advancement of art finance, yet participation from the traditional financial industry still needs to be improved. In response to these dynamics, our envisioned art finance brokerage company aims to be rooted in China while adopting a global perspective. Drawing insights from the mature art finance development models prevalent in the Western sphere, we aim to construct a robust linkage between art and finance. Additionally, our company will leverage a team of adept art finance professionals to discern breakthroughs and focal points conducive to the innovative advancement of China's art finance. This approach seeks to furnish a comprehensive suite of solutions tailored for financial institutions and art organizations, fostering a genuine amalgamation of art and finance.

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