By Andy Sambidge
Bank's chief investment officer says art offers potential high returns in long run.
The investment chief of the Middle East's largest banking group has said fine art should be looked at by investors for potential high returns in the long run.
According to the Gary Dugan, Emirates NBD's chief investment officer, fine art could provide "significant personal and financial rewards".
Speaking at a private dinner held on the sidelines of Art Dubai 2010, Dugan told an audience of invited Emirates NBD Private Banking clients: "I am convinced that fine art has a place in the portfolios of many of our clients."
He added: “Like the global real estate market, the international art market was significantly impacted by the worldwide financial crisis, which led to a general decline in prices at auction and increased consolidation among sector participants.
“The correction in the art market, however, has proved relatively short and shallow. At the same time, consolidation will lead to increased price stability, benefiting long-term investors.”
Highlighting the significant appeal of emerging art markets – including the Middle East – Dugan said that increased investor attention to fine art from the Arab world comes at a time when the region is itself increasingly seen as core a component of the global financial market.
“Despite the impact of the global financial crisis, we see rising levels of interest in investing in Middle Eastern art as well as increased investment in fine art from Middle East-based collectors,” he said.
“Indeed, according to Christie’s, registrations from their Middle East clients rose by some 30 per cent last year, the highest increase among all geographic regions for the international auction house.”
He added: “Based on expert advice and as part of a broadly diversified portfolio, I am convinced that fine art has a place in the portfolios of many of our clients.”
This 'new' area of investment being focused on by 'experts' reminds me much of the pre boom and bust days of Dubai. So now banks want us to invest in fine art whose cost is based only on 'experts' opinions and driven by the auction houses thats sell them and who take their commission based on the sale - does that not remind you off real estate? Perhaps we can just appreciate art for its own sake and not look at it in financial terms only. The only positive is that at least you would be buying a finished product......