The role of wealthy patrons in the art world has a proud lineage. Thanks to the banking acumen of Giovannia de Medici, the Medici family made 15th Century Florence the cradle of the Renaissance through their patronage of some of history’s most iconic great masters, including Donatello, Botticelli, Leonardo da Vinci and Michelangelo.
Now, in the art world of the 21st Century, private galleries founded by wealthy art patrons are experiencing a Renaissance of their own.
In 2016 Larry’s Listi published a study on private art museums. The report identified 317 private contemporary art museums globally in 45 countries, of which over 70% were founded since 2000 and 20% were opened in the five years leading up to the report’s publication.
Further detail from the study reflects information gathered from 166 private contemporary museums across the globe.
Fuelling the upturn in private museums is the enormous wealth and influence of a select group of ultra-affluent international art patrons - from billionaire Russian oligarchs, Asian businessmen and Australian philanthropists through to newly cashed up tech founders and innovators.
Inspiration and influence
The invigorated interest level of today’s art investors is changing the dynamics of the art scene – both culturally and economically.
The public realm has traditionally taken an unspoken proprietorial position regarding artworks. Museums have been viewed as locations driven by community and cultural interests or agendas, rather than by private individuals or groups with economic imperatives.
In Australia, the local government sector has embraced cultural planning to a high degree, but with no corresponding increase in funding. This has left many councils without the ability to fund their cultural infrastructure, let alone profit from it or break even. Funding at a state and national level is also foundering, which has led to increased competiveness from galleries as they fight for their share of a finite pool of public funds.
The situation has made it increasingly difficult for many public galleries to serve their communities, cities and states as the storied and vibrant cultural hubs we expect them to be.
Thankfully, private museums are not necessarily shirking their responsibility to make art accessible, and may even open up new opportunities for people to broaden their art appreciation horizons.
A well connected billionaire, for example, may have access to a calibre of artwork that cash-strapped public institutions can only dream about.
Consider the situation of a private art collector with a huge collection that has grown to surpass the wall and/or exhibition space in their private residence(s). If that collector establishes a private art museum, the public has access to artworks they may not have seen otherwise, and which may have been valued at a price well outside the decreasing budget margins of any public gallery.
In the Larry’s list study, 55% of the private contemporary art museums offer free admission, although the number of admissions is varied and approximately 40% of the private contemporary art museums were open more than 300 days per year.
An estimated $3 trillion of art is housed in private collections throughout the world. Headline-grabbing auction results in recent years have contributed to global art market sales that reached $56.6 billion in 2016 according to Dr. Clare McAndrewii.
Private galleries could also hold potential for art scenes in regional areas. According to research by Morgan Stanley, collectors will often establish their private art museums near their homes, sometimes out of a sense of duty and responsibility to give back to their communities. This regional emphasis may create potential future economic stimulus for the cities through increased tourism and jobs. Also, the structures the architects create may become cultural treasures for the community. In the Larry’s List study, of the 166 private contemporary art museums, two-thirds were located in the collectors’ home towns. Additionally, approximately 40% of them employ 10 or more professionals.
At a macro level there has been much discussion about the rise of the creative class and the capacity to transform a city’s fortune through investment in creative capital. This thinking reflects an understanding that the skills associated with artistic practices - creative thinking, self-discipline, collaboration, risk taking, and innovation - are skills that are in great demand in our contemporary knowledge economyiii.
Many collectors who establish private galleries also do their part to support local artists and provide educational resources. Of the respondents to Larry’s study, 60% offer tours and talks and 20% support artists in residence.
For information on investment opportunities please contact your Morgan Stanley Financial Adviser.