Photo by Anthony Wallace/AFP via Getty Images.
The number of billionaires worldwide grew by 10% to 1,542 last year, and more of them now rank among the world’s top art collectors, according to the 2017 Billionaires Report compiled by UBS and PwC.
The document, released Thursday, drew on two decades of historical data and around 90 interviews with billionaires, their heirs, and their advisors to provide a quantitative and qualitative portrait of the wealthiest people in the world. The picture is rosy: Billionaires increased their wealth by 17% last year to a cumulative total of $6 trillion. That amounts to an average net worth of $3.9 billion for each individual on the list.
What does that mean for the art market? “The growth of billionaire wealth has made art, regardless of what kind of art it is, much more accessible to the public,” due to their creation of private institutions and contributions to public museums, said John Mathews, the Head of Private Wealth Management and Ultra High Net Worth at UBS. “Not only in the U.S. but all over the world—especially in Asia.”
The report found that an increasing number of billionaires rank among the ARTnews “Top 200 Collectors” list, growing to 72 in 2016 from 28 in 1995. Of the six dozen on the list last year, 42 hail from the United States, which with 563 has the world’s highest concentration of billionaires. Asia’s billionaire cohort of art collectors on the list has grown rapidly to 14 last year from one in 2006.
“I’m having more conversations with clients about art as an asset class today than I did 10 years ago,” said Mathews.
Last year’s iteration of the Billionaires Report documented rapid growth of the ultrawealthy in Asia, with the continent generating a new billionaire every three days. This year’s report finds that trend increasing. Nearly 162 new billionaires came from Asia, bringing the total number of billionaires in Asia above those in America for the first time.
The total amount of wealth held by Asian billionaires, still lower than their American counterparts, rose to $2 trillion, up from $1.5 trillion the prior year. In the United States, the technology industry generated the most new wealth for billionaires; it was also the second-largest driver of global wealth for billionaires, after the retail sector. The total number of billionaires in Europe, where old money reigns supreme, was essentially unchanged.
The report estimates that total wealth held by Asian billionaires will outpace that in the U.S. within four years, if current growth trends hold. Asian billionaires are also younger, at 59 on average, compared to their European and American counterparts, who are on average 66 and 67, respectively. But the report notes that the net worth of some Asian billionaires is just barely over the nine-digit threshold.
Billionaires play an important role in the Chinese art scene, which features numerous private museums backed by individual donors. A January 2016 report by the Chinese-based firms Larry’s List and the Art Market Monitor of Artron (AMMA) found that almost all of the country’s 26 private museums relied on individual backers, rather than foundations, raising concerns about their longevity should their founders’ largesse come to an end. But earlier this month the Ullens Center for Contemporary Art in Beijing announced that it had been acquired by a group of private investors, assuring its survival as a foundation after Belgian millionaire Guy Ullens moved to sell his museum.
Private museums are by no means confined to Asia. The report cites the Broad, the popular Los Angeles contemporary art museum founded by Eli and Edythe Broad, as a prime U.S. example. Still, across the globe, other billionaires thinking about founding private museums “should bear sustainability in mind,” noted the report. “Building a museum or buying a sports team is one thing—successfully running it over time is another.”
The report also found that “public museums are also receiving more funding than ever before” with billionaires making up an important chunk of that. “U.S. museums like the MoMA in New York and SFMOMA [in San Francisco] are institutions that thrive on support from different billionaires,” the report noted, drawing on qualitative interviews.
Previous reports have also examined the art collecting of billionaires, for which hard data is notoriously difficult to come by. According to UBS and Art Basel’s The Art Market | 2017 report, in which author Dr. Clare McAndrew drew on last year’s Billionaires Report, precisely estimating the total value of billionaire art collections or what percentage of billionaires even collect art remains a challenge.
That report did note that “research has suggested that the majority of billionaires own art, and that many are important and regular collectors.” Comparing published figures on individual net worth and their art collection’s value have found that collections can amount to “at least” 10% of their net worth, according to The Art Market | 2017 report.
It’s highly likely that one of these billionaires will be raising a paddle (or calling in from Asia or the Middle East) when Leonardo da Vinci’s famed Salvator Mundi (c. 1500), conservatively estimated at $100 million, hits the auction block at Christie’s next month, along with other star lots by major artists. But McAndrew has suggested that economic inequality could pose a challenge for the broader market if billionaires and millionaires fail to support the art market as a whole, instead focusing primarily on trophies and established names.
The overall growth in billionaire wealth shows few signs of slowing, particularly in Asia. “Unless something dramatic happens, either in the economy or with policy changes in that part of the world, you’re going to have more potential [art] buyers,” said Mathews, which he noted is good for the overall market. “A rising tide lifts all boats,” Mathews said.