Experts Predict Art Market Trends, Part 2: Roman Kraeussl, Lorenzo Rudolf, Mary Hoeveler, Jeff Rabin

Experts Predict Art Market Trends, Part 2: Roman Kraeussl, Lorenzo Rudolf, Mary Hoeveler, Jeff Rabin
From left, art adviser Mary Hoever, CEO and director of Art Stage Singapore Lorenzo Rudolf, associate professor of finance at VU University Amsterdam Roman Kraeussl, and co-founder of Artvest Partners Jeff Rabin
(From left: Courtesy Mary Hoever, Courtesy Lorenzo Rudolf, Courtesy Roman Kraeussl, Photo by Andrew H. Walker)

This is the second of a four-part series from Art+Auction magazine in which key art-market players weigh in on the future of the field. 


Looking back at the past few years, I think what we saw this time was a small correction in the art markets. There was a 12-month dip around 2009. But there was not a slump of five or more years as when the Japanese bubble burst in 1991. We were saved because now the markets are much more globalized. The danger now will be if there is a shock to the Chinese economy, because so many of the markets are being driven by them at this point, at the high end as well as the midmarket level.

But I do not see signs of such a setback in the data. The wealth in China is growing more quickly now than in the U.S. and Russia combined. Throughout Asia, but especially in China, the number of high-net-worth individuals is continuing to grow and the amount of money available to each is also increasing. More and more of that is being invested in so-called emotional assets: artworks, but also wine, jewelry, watches, and cars.

There was fear that we might be entering a bubble again, but I don’t think so. The midmarket segment, from $50,000 to $1 million, might get punished a bit in the next couple of seasons. But the real expensive pieces will hold value. Up through 2008 I predicted India would have a similar boom. But I didn’t realize how much of the Indian market was being driven by Westerners speculating. This is the advantage in China: They are buying back their own culture. And it is not just a fad; they will be buying that back for a long time.

Roman Kraeussl is associate professor of finance at VU University Amsterdam, and the author of Art+Auction’s Databank column.


The art world no longer has just two or three global centers. China might be the market locomotive right now, but there is interesting art in every country. Go to Vietnam, go to Cambodia—it’s like China 15 years ago. In 10 years the most interesting scene will be Burma.

In the past six months, at least two dozen collectors and curators have called me and asked for addresses of artists’ studios in Indonesia. I am sure that very soon some of the big Western galleries will be doing shows of Indonesian artists.

The biggest difference between Indonesia and more developed markets like China and India is not the strength of the art but the strength of the infrastructure—the galleries and museums. And that development is happening in various places. We see some Asian galleries opening other branches: ShangART and Tomio Koyama Gallery are both opening in Singapore. A national gallery is also under construction there and will open next year. And the Singaporean government is trying to encourage big collectors to open private museums.

While Indonesia is the scene on the brink, the market that is undeniably growing the fastest is China. It still may not be growing as quickly as we think, but the potential is huge. With Chinese collectors, and with almost all Asian collectors, the trajectory is the same: First they buy local artists, then they buy Western. That’s why it’s important to build up the bridges between these art scenes, to promote Chinese buying Japanese artists, Indians buying Indonesian artists, and so on.

Lorenzo Rudolf is CEO and director of Art Stage Singapore, which debuted in 2011. He previously helmed Art Basel, Art Basel Miami Beach, and SH Contemporary in Shanghai.


It’s business as usual, as far as we’re concerned. 2009 was a surprisingly good year for us. We were able to buy some things we might not have chosen to buy or couldn’t afford previously. So was early 2010. As the market has regained momentum, we’ve had to exercise more caution, especially now, because Wall Street has taken notice and there are people coming into the market on a strictly speculative basis.

You can see areas of activity where you need to be very careful; an artist may be having a ‘moment’ that may not have anything to do with the long-term merits of the work. But these surges shouldn’t scare anyone from the market; you simply have to be aware of them.

There are a number of people who are buying based on market dynamics, buying artists that the market favors. We try consciously to buy independently of this dynamic, even though sometimes our interests overlap with what’s happening. The truth is that the market homogenizes the art world. It becomes such a narrow place, especially if you’re only playing in that narrow realm of the auction world, with 20 or 30 artists who come up every season. Occasionally you can get wonderful deals at auction, but you are more often likely to pay a premium when you buy there.

It’s much more interesting as a process of learning and discovery to go out and find work that may not be on everyone’s radar screen, because it hasn’t been predigested.

My clients want a financial perspective on what they’re buying. They want to understand why they’re paying what they’re paying and to make sure it’s consistent with other works by the artist—or to make the decision knowledgeably if they choose to pay more. While it’s not an investment mentality, it’s certainly a financially prudent mentality, and that has become more the case since the market crashed in 2008. Everyone wants more information now.

Mary Hoeveler is a New York–based private art adviser focused on contemporary art. Previously she was managing director at Citigroup Art Advisory Service.


In the not too distant past, people argued vociferously about whether art should be considered an asset class or if it was meant primarily for connoisseurship and personal enjoyment. Over the past five years people have finally accepted that it can actually be both. That change in attitude has been concurrent with tremendous worldwide wealth creation over the past 15 years. As a result, more people than ever are looking to invest in tangible assets—certainly in the United States, though Asian economies and European ones have always viewed tangible assets as a store of wealth. The investment potential of art will undoubtedly continue to grow.

Regarding art funds, one of the most talked-about art investment vehicles, we are seeing and will continue to see a steady climb in the number of funds coming to market. Based on our numbers and data, we estimate the global art-fund industry is somewhere in the $1 billion range, with Asian funds accounting for approximately one-third of that total. That’s up significantly over the past five years. I think what will be key is that people are able to do the due diligence on the existing funds, and feel comfortable with the way they are managed—the time frame, the conflict issues, preferential return, fee structures, and the adviser group that is working on these particular funds. An important issue when valuing art funds: How they charge their fees? Do they mark-to-market assets based on appraised value or do they hold all the assets in the fund at the cost of acquisition when assessing fees?

Art funds are distinct from private investment partnerships, which are generally groups of individuals who have pooled resources to invest in art or other assets. Private investment partnerships are also on the rise, but as there is no public documentation, it is hard to get a real sense of how much money is invested in these vehicles.

Jeff Rabin, with Michael Plummer, co-founded Artvest Partners, an art advisory firm that provides investment advice on the art market. The two previously worked at Christie’s in financial services.