Management of Art Galleries – Business Models - Universität St.Gallen

56 / 225 Conceptual BasisCompared to auction houses and art galleries, dealers have following key advantages (inreference to Robertson, 2008):- They are more flexible- Their overhead costs are lower- They have fewer duties and less conflict with artists- They can set their own margin and are even less transparent.Ancillary Art Business Service ProvidersIn the art market, a range of supplementary providers offer complementary services. This fostersthe relationship between artists and collectors and adds value to the work of commercialintermediaries.If buyers seek to establish a collection there are several organisations in every country thatsupport them in these endeavours. Organisations like the Art Fund (formerly the National ArtCollections Fund) or the Contemporary Art Society, both in the UK, offer programmes forindividuals interested in contemporary collecting, development schemes for curators, initiativesto build up public collections and consultancy services related to collecting (Contemporary ArtSociety, 2009). For individuals who are willing to invest a huge amount of money in art,international banks and consultancies offer specialised services. Up to its closure at thebeginning of 2009, UBS Art Banking was the leading institution to provide wealthy clients witha full service around their collection by consulting, investing and selling (Capgemini & MerrillLynch, 2006). A similar service is provided by firms like Fine Art Wealth Management, aLondon-based consultancy headed by Randall James Willette, former head of art banking atUBS. This company advises private banks on integrating art into their overall wealthmanagement strategy for private clients.Besides advisory services, some companies have emerged on the market that focus on thefinancial returns on investing in art. The most prominent is Philip Hoffman’s The Fine Art Fund.Its objective is “to capitalise on art market expertise to build long-term capital growth forinvestors, combined with personal enjoyment of works of art by some of the world’s greatestartists created over the last six centuries” (The Fine Art Fund, 2009). The German equivalent ArtEstate, which made a very promising start in offering a fund for highly selective art, shut downits operation in 2008.Another crucial and indispensable player in all art deals is the insurance company. Insuranceproviders such as AXA, Chubb or Hiscox have specialist departments in providing insurance forartworks. They insure everything “from the Cycladic to the Contemporary, from musicalinstruments to memorabilia, indeed anything that is bought and sold at a Fine Art auction houseor in any gallery around the world” (AXA Art Insurance Limited, 2009). In difficult cases theyrefer to their partner network, for example in the case of a problematic valuation for a work. GurrJohns, for example, specialises in the valuation of artworks, operating independently of anyauction house or dealer.