Relatorio ing 4

Sectorial Study

THE CONTEMPORARY ART MARKET IN BRAZIL 3rd EDITION, APRIL 2014 Coordinated by: Dr. Ana Letícia Fialho

TABLE OF CONTENTS FOREWORD ....................................................................... 4 PRESENTATION.................................................................. 6 THEMATIC LINES................................................................................................ 7 OBJECTIVES...................................................................................................... 7 UNIVERSE OF STUDY AND METHODOLOGY ...................................................... 8 RESPONDING GALLERIES ................................................................................ 9 MAIN RESULTS................................................................................................... 10 • Young market in the process of internationalization............................................ 10 • Sector growth ................................................................................................... 10 • Sales, works, and amounts................................................................................ 10 • Perception of the Brazilian market...................................................................... 11

PROFILE OF GALLERIES............................................ 12 TYPOLOGIES...................................................................................................... 13 GENERATIONAL CROSS SECTION.................................................................... 13 REGIONAL DISTRIBUTION................................................................................. 14

SCALE......................................................................... 16 SCALE................................................................................................................ 17 BUDGETARY SCALE.......................................................................................... 17 INFRASTRUCTURE............................................................................................. 18 NUMBER OF REPRESENTED ARTISTS.......................................................................... 18 NUMBER OF EXHIBITIONS PER YEAR............................................................... 18 • Individual and collective exhibitions................................................................... 18 PUBLIC............................................................................................................... 19 • Visitors.............................................................................................................. 19 • Clients .............................................................................................................. 19 NUMBER OF EMPLOYEES E SERVICE PROVIDERS.......................................... 19 AVERAGE WAGES.............................................................................................. 20 NUMBER OF FAIRS PER YEAR.......................................................................... 20

MODUS OPERANDI.................................................... 21 CULTURAL DIMENSION..................................................................................... 22 RELATIONSHIP WITH ARTISTS REPRESENTED............................................... 22 • Recruitment of new artists in the market........................................................... 22 • Formalization..................................................................................................... 23 PARTNERSHIPS AND COLLABORATIONS......................................................... 23 SECONDARY MARKET....................................................................................... 23 OBSTACLES....................................................................................................... 24 OPERATING EXPENSES .................................................................................... 24

SECTOR GROWTH AND DYNAMICS.......................... 25 GROWTH INDICATORS...................................................................................... 26 SALES, WORKS, AND PRICES........................................................................... 26 • Average Price.................................................................................................... 26 • Objects sold...................................................................................................... 27 • Type of works sold............................................................................................ 27 BUSINESS PLATFORM ...................................................................................... 27 THE IMPORTANCE OF ART FAIRS..................................................................... 27 NACIONAL MARKET X INTERNACIONAL MARKET........................................... 28 PROFILE OF COLLECTORS................................................................................ 28

INTERNATIONAL INSERTION .................................... 30 INTERNATIONALIZATION OF THE PRIMARY MARKET FOR CONTEMPORARY ART.... 31 • Internationalization for the team of artists........................................................... 31 • Internationalization strategies of galleries........................................................... 31 INTERNACIONAL SALES.................................................................................... 32 SALES VOLUME................................................................................................. 32 DESTINATIONS OF SALES................................................................................. 33 PROFILE OF INTERNATIONAL COLLECTORS.................................................... 34 INCREASING INSTITUTIONAL INSERTION ........................................................ 35 EXPORTS........................................................................................................... 36 MAIN EXPORT DESTINATIONS ......................................................................... 37

INTERNATIONAL PERCEPTION.................................. 40 PERCEPÇÃO DE COLECIONADORES INTERNACIONAIS ................................. 41 Pesquisa Inédita por Anders Petterson, ArtTactic ............................................... 41 ART MARKET CONFIDENCE ............................................................................. 42 KEY STRENGTHS OF THE BRAZILIAN ART MARKET........................................ 43 KEY CHALLENGES TO FURTHER DEVELOPMENT OF THE BRAZILIAN ART MARKET....44 COLLECTOR BUYING TRENDS.......................................................................... 45 AUCTION TRENDS............................................................................................. 46 • Brazilian Modern and Contemporary Art Auction Market 2014.......................... 46

CONCLUSIONS................................................................... 50 AFTERWORD...................................................................... 53 ABOUT THE AUTHORS....................................................... 54

FOREWORD Through Latitude Project, ABACT and Apex-Brasil are proud to offer, as a public service, a consistent set of data that consolidates the position of the contemporary art segment as a sector of the economy.

For the associated primary market galleries, the Latitude Sectorial Study has become a forum for discussion of the status quo and the future of the sector from a historical analysis that is now possible.

Also, and not less importantly, it has become a way galleries observe and place themselves within the group and, afterward, implement changes in their own businesses. Especially in regard to the internacionalizing mission of the Latitude Project, the Sectorial Study allows one to see the strategic relevance of the Project’s activities.

For ABACT and Apex-Brasil, the Latitude Sectorial Study is an important tool for positioning the sector and has become the basis on fundamental dialogues with the government and society in general on issues that go beyond the world of galleries, but within which they fit inside and now may lead.

From the experience of the first two editions and the unprecedented contribution of an external author, the Sectorial Study reinforces its role of being a point of reference in academic, journalistic, business and political spheres. To this end, it is worth reinforcing the commitment and effort of the group of associated galleries, without which these results would not be possible.

Eliana Finkelstein ABACT President (2012-2014) Frederico Miranda Silva Apex-Brasil Project Manager Mônica Novaes Esmanhotto Latitude Project Executive Manager

SECTORIAL STUDY

PRESENTATION This report presents the results of the 3rd edition of Latitude Sectorial Study. The quality of data collected and the amplitude of the aspects analyzed, have improved every year, making this come Sectorial Study the main source of information and monitoring of the primary market of contemporary art in Brazil and an important tool for different players operating in the sector.

Before the first report was released in 2012, there was the impression that the contemporary art market in Brazil would be in a positive moment of expansion and internationalization, but what little information there was, was scattered and not very objective. With the Sectorial Study, data was shown that allowed for the measurement and understanding of these phenomena. The increase in revenue and the emergence of new players in the market, for example, have been some of the data that stand out from the beginning of this work.

The maintenance, in each edition, of the main themes is necessary from a methodological point of view, since it allows changes in specific aspects of the industry to be monitored and evaluated over the years.

Moreover, we always seek to enhance, detail, and expand the research, so that in every report there are issues/ aspects that had not been previously explored. This dynamic demonstrates the need to constantly observe what we do in the market, as well as the inputs of the gallerists who come to see, in the Sectorial Study, a powerful tool for individual decisions.

In this sense, this edition of the Sectorial Study brings an unprecedented external analysis, which is the result of collaboration established between the Latitude Project and ArtTactic, a company specialized in market research and investment in arts. The research, especially done for this report, was coordinated by Anders Petterson and deals with the perception of international collectors on the Brazilian market and on its modern and contemporary art. This research also presents an analysis of Brazilian participation in international auctions, offering some clues to understanding the performance of the Brazilian secondary market, which still lacks studies and analyses equivalent to that conducted in the framework of the primary market, but fundamental to the understanding of the sector as a whole as well as its process of internationalization.

We thus hope that the 3rd edition of Latitude Sectorial Study, and the results of this first collaboration with ArtTactic, can contribute uniquely to expand and deepen reflection on the art market in Brazil and its place in the international arena.

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SECTORIAL STUDY

THEMATIC LINES The survey data is grouped into seven major themes that make up the chapters of this report: A Profile of galleries, which shows the typological diversity and generational differences and regions of the galleries; Scale, in which detailed data is found regarding revenue, infrastructure, number of artists represented, number of exhibitions, composition of public, number of employees, average salary, participation in fairs; Modus operandi, which highlights the main activities of the galleries in the primary market, types of relationships with artists, partners, and employees, participation in the secondary market, difficulties in business expansion; Sector growth and dynamics, which shows the indicators for development of the sector, sales information, types of artworks sold, prices, principal business platforms, profiles of collectors; International insertion, dealing with different aspects related to the internationalization of the galleries, such as the representation of foreign artists, internationalization strategies, sales abroad, international insertion of the artists represented in international institutions, sales destinations, and development of exports; International perception, a new chapter this year, the result of a partnership with ArtTactic, a company specialized in art market research, in which Anders Pettersson presents an excellent study on the perception of international collectors in the Brazilian market and on domestic modern and contemporary art, as well as an analysis of Brazilian participation in international auctions. Finally, Conclusions, a chapter in which we present the main results and trends observed.

OBJECTIVES • Providing the Latitude Project and ABACT detailed information on the sector in order to support the planning and development of their activities. • Fostering the creation of management and commercial promotion tools by member galleries, aiming at the improvement and expansion of businesses in the sector. • Being a source of objective, organized and trustworthy data on the sector for the agents of the art system, public managers, partners, specialized media and other interested parties.

2014 7

SECTORIAL STUDY

UNIVERSE OF STUDY AND METHODOLOGY The 3rd edition of Latitude Sectorial Study surveyed a sample of 45 galleries in the primary contemporary art market, associated with ABACT and/ or the Latitude Project. The response rate was 91%, even greater than that obtained in 2012 (84%). The number of surveyed galleries, however, remained largely the same: there were 44 in 2012 and 45 in 2013.

Some galleries are no longer part of the group because they have ended their activities or disassociated themselves from the Project, and others who participated in the survey in 2012, did not respond to the survey, though they remain associated with the Project. Galleries recently associated were Blau Projects, Galeria Lume, Galeria Marcelo Guarnieri and Múltiplo Espaço de Arte, who participated in the survey for the first time. The universe remains very heterogeneous, and the number of young galleries continues to grow.

The change in the base group of analyzed companies can impact the results and, in some cases, explain variations in numbers, as occurred in the second edition of the survey in relation to the first, but this issue does not show a significant change in galleries’ profiles.

As noted earlier, the group studied does not equal the total number of active galleries in the primary market, but, as can be seen by the list of participating galleries presented below, the most active, professionalized, and internationalized galleries are fully covered. The empirical basis is therefore fairly representative of the Brazilian contemporary art market. This data is also a key differentiator of this research, because we can determine exactly the universe to which it refers, in contrast to some international reports on the art market which use questionnaires where anonymity and low rate of return are found. For this reason, although we seek, where possible, data on other markets, the lack of equivalent studies using similar methodology restricts the potential for comparative analyses.

1

The contents of the 2012 questionnaire was discussed at a meeting with the participating galleries, which resulted in the reformulation of some questions, as well as in the detailing and addition of others. Participating in the discussion, in addition to galleries were Monica Novaes Esmanhotto, Latitude Project Executive Manager and Frederico Silva, Project Manager of APEX-Brasil.

This report presents quantitative and qualitative data from primary sources, collected through an electronic form containing approximately 170 questions1, a larger number of topics than in the 2nd edition of the Sectorial Study. Not all galleries responded to all the questions, but since the beginning of data collection, we obtained in this edition the best and more accurate response rate.

In addition to the questionnaire, contact with the participating galleries via email, telephone and in person was made, thus allowing for the checking of information and consolidation of results, especially those of a qualitative nature. Additionally, data related to the history of the Latitude Project, as well as data provided by Apex-Brasil regarding the performance of the galleries in international markets and export volumes were also used.

2014 8

SECTORIAL STUDY

RESPONDING GALLERIES • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

A GENTIL CARIOCA AMPARO 60 GALERIA DE ARTE ANITA SCHWARTZ GALERIA DE ARTE ATHENA CONTEMPORÂNEA BARÓ GALERIA BLAU PROJECTS BOLSA DE ARTE DE PORTO ALEGRE CASA TRIÂNGULO CELMA ALBUQUERQUE GALERIA DE ARTE CENTRAL GALERIA EMMA THOMAS FASS GALERIA BERENICE ARVANI GALERIA DA GÁVEA GALERIA EDUARDO FERNANDES GALERIA ESTAÇÃO GALERIA FORTES VILAÇA GALERIA JAQUELINE MARTINS GALERIA LAURA MARSIAJ GALERIA LEME GALERIA LUISA STRINA GALERIA LUME GALERIA MARCELO GUARNIERI GALERIA MARILIA RAZUK GALERIA MILLAN GALERIA NARA ROESLER GALERIA OSCAR CRUZ GALERIA PILAR GALERIA RAQUEL ARNAUD INOX GALERIA LOGO LUCIANA BRITO GALERIA LUCIANA CARAVELLO ARTE CONTEMPORÂNEA MENDES WOOD DM MERCEDES VIEGAS ARTE CONTEMPORÂNEA MÚLTIPLO ESPAÇO DE ARTE PARALELO GALLERY PORTAS VILLASECA GALERIA PROGETTI SÉRGIO GONÇALVES GALERIA SILVIA CINTRA + BOX4 SIM GALERIA VERMELHO YBAKATU ESPAÇO DE ARTE ZIPPER GALERIA 2014 9

SECTORIAL STUDY

MAIN RESULTS YOUNG MARKET IN THE PROCESS OF INTERNATIONALIZATION

• The primary market for contemporary art in Brazil is characterized by being young, dynamic, and in the process of expansion and internationalization.

• This year’s survey confirms the trend already pointed out earlier: 33% of surveyed galleries were established in the 2000s, and 33% of them after 2010.

• 71% of the galleries reported sales on the international market, which is a record since such data began to be monitored (in 2012 this figure was 60%).

• This young market trend is also reflected in the population of about 1,000 artists represented by the galleries. Out of these artists, about 15% were introduced to the market in 2013.

INDUSTRY GROWTH

• Since 2010, the average annual growth rate among the surveyed galleries was 22.5%. In 2013, growth was more significant.

90% of the galleries reported having increased their revenue, and average growth among surveyed galleries stood at 27.5%.

• Major factors given by the galleries explaining this growth are the good timing of the Brazilian market, the excellent positioning of the galleries in the national and international market, and an increase in the number of collectors.

• The labor market in the sector also continues to grow: 70 % of the galleries reported having increased the number of employees in 2012, while in 2013, 60% reported an increase in their workforce.

SALES, WORKS, AND AMOUNTS

• The galleries surveyed sold about 6,500 objects in 2013. Painting, photography and sculpture are the preferred types of work among collectors.

• Among the surveyed galleries, 65% raised the prices on works for sale, and the average increase, including the whole group studied, was 9%.

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SECTORIAL STUDY

NATIONAL MARKET X INTERNATIONAL MARKET • The domestic market was responsible for approximately 85% of sales, and the international market 15% of sales in 2013, just as in 2012.

• Although sales on the international market are proportionally much smaller than the domestic market, research indicates an expansion in the destinations of works: in 2013, sales were made to 29 countries.

• The main sales destinations galleries reported were the U.S., UK, France, Switzerland, and a new country highlighted is Colombia.

PERCEPTION OF THE BRAZILIAN MARKET • The study by ArtTactic and coordinated

by Anders Petterson points out that there is great interest and confidence on the part of international collectors in the Brazilian market. 54% of international collectors in the survey believe that the Brazilian market will develop in the next 12 months, and 66% of them are confident about that growth over the next five years.

• Among these collectors, 88% noted the quality of Brazilian production as one of the strengths of the country’s market, and 55% of them consider that the strong and sophisticated base of Brazilian collectors is one of the highlights of this market.

• 40% of collectors have already acquired works by Brazilian artists, and 74% intend to do so in the next 5 years.

2014 11

profile of galleries

SECTORIAL STUDY

TYPOLOGIES The profile of the surveyed galleries is quite heterogeneous: some galleries are small and some internationalized, with midrange galleries operating primarily at the local/ regional level, and large galleries, working with established artists and participating in the international market; startups that work primarily with young Brazilian artists, with galleries of the same generation who have already begun their activities representing foreign artists; galleries that were pioneers in the internationalization process and now have over 50% of their artists from other nationalities; galleries with a preference for a specific type of production, such as street art, and others who work with various media and other betting on languages that ​​ do not yet have a consolidated business model, such as performance art. Based on the specifics of each gallery, we could possibly create a typology for each of them.

They share the fact that they have very personalized business profiles and their management models are clearly linked to the personality of the owner. A majority of the galleries (80%) have 1-2 owners.

GENERATIONAL CROSS SECTION NUMBER OF GALLERIES ACCORDING TO THE DECADE OF ESTABLISHMENT

15

16

15

14 12 10 8

6

6

• GALERIA RAQUEL ARNAUD • GALERIA LUISA STRINA

• BOLSA DE ARTE DE PORTO ALEGRE • GALERIA MARCELO GUARNIERI • GALERIA MILLAN • CASA TRIÂNGULO • SILVIA CINTRA + BOX4 • GALERIA NARA ROESLER

1970

1980

4 2 0

2

7 • GALERIA MARILIA RAZUK • YBAKATU ESPAÇO DE ARTE • SÉRGIO GONÇALVES GALERIA • LUCIANA BRITO GALERIA • AMPARO 60 GALERIA DE ARTE • ANITA SCHWARTZ GALERIA DE ARTE • CELMA ALBUQUERQUE GALERIA DE ARTE

1990

• GALERIA LAURA MARSIAJ • MERCEDES VIEGAS ARTE CONTEMPORÂNEA • GALERIA BERENICE ARVANI • GALERIA FORTES VILAÇA • VERMELHO • A GENTIL CARIOCA • GALERIA ESTAÇÃO • GALERIA LEME • GALERIA OSCAR CRUZ • GALERIA EDUARDO FERNANDES • EMMA THOMAS • FASS • PROGETTI • GALERIA DA GÁVEA • INOX GALERIA

2000

• BARÓ GALERIA • CENTRAL GALERIA • MENDES WOOD DM • ZIPPER GALERIA • PARALELO GALLERY • PORTAS VILLASECA GALERIA • MÚLTIPLO ESPAÇO DE ARTE • ATHENA CONTEMPORÂNEA • GALERIA JAQUELINE MARTINS • LOGO • GALERIA LUME • GALERIA PILAR • LUCIANA CARAVELLO ARTE CONTEMPORÂNEA • SIM GALERIA • BLAU PROJECTS

2010 2014 13

SECTORIAL STUDY

Half of the galleries that responded to the survey were established since the 2000s. The number of galleries created in the 2000s has already been equaled by the total number of galleries created from 2010 to 2013. This indicates that there is indeed a movement to expand the number of new galleries entering the market which is unprecedented in the history of the Brazilian market2. Furthermore, we also observed a greater concern regarding professionalization by those newer galleries, which understand the importance of data production on the industry for the better development of their strategies and business.

REGIONAL DISTRIBUTION The existence of a dynamic arts system is a fundamental condition to the development of the art market. São Paulo and Rio de Janeiro have a wide variety of agents and equipment: artists, art schools, critics, curators, alternative spaces, artist residencies, public and private institutions, etc.

As the economic center of the country, São Paulo has a greater number of galleries, the oldest art fair (SP-Arte which was created in 2005), and, according to the galleries has the largest revenue. Rio de Janeiro is the second pole of the market, which also notes the emergence of new galleries. The institutional context of Rio de Janeiro, with the creation of new institutions such as the Museu de Arte do Rio (MAR) and Casa Daros, and also the opening of the fair ArtRio in 2011, indicates that the arts system in the city is going through a dynamic process that can stimulate the expansion of its art market.

Other capitals, although they may have thriving artistic production and some relevant institutions, still do not have art markets that are as developed and, therefore, have little representation in the research.

However, worth mentioning is the participation of the Galeria Marcelo Guarnieri in Ribeirao Preto in the state of São Paulo, and Porto Alegre’s, Bolsa de Arte, galleries that are in the process of opening branches in São Paulo. Galeria Nara Roesler, based in São Paulo, is opening a branch in Rio de Janeiro. This is an unprecedented phenomenon among contemporary art galleries in the primary market, and also an indicator of the new dynamics of the sector.

2

The emergence of new art fairs, such as PARTE in São Paulo, and Artigo, in Rio de Janeiro, highlight this phenomenon and focus on the participation of new galleries who are unable to access the consolidated fairs such as SP-Arte and ArtRio.

2014 14

SECTORIAL STUDY

DISTRIBUTION OF THE GALLERIES BY CITY RECIFE

2%

29% RIO DE JANEIRO

• AMPARO 60 GALERIA DE ARTE

SÃO PAULO

• A GENTIL CARIOCA • ANITA SCHWARTZ GALERIA DE ARTE • ATHENA CONTEMPORÂNEA • GALERIA DA GÁVEA • GALERIA INOX • GALERIA LAURA MARSIAJ • GALERIA NARA ROESLER • GALERIA SILVIA CINTRA +BOX4 • LUCIANA CARAVELLO ARTE CONTEMPORÂNEA • MERCEDES VIEGAS ARTE CONTEMPORÂNEA • MULTIPLO ESPAÇO ARTE • PORTAS VILASECA GALERIA • PROGETTI • SERGIO GONÇALVES GALERIA

59%

• BARÓ GALERIA • BLAU PROJECTS • BOLSA DE ARTE DE PORTO ALEGRE • CASA TRIÂNGULO • CENTRAL GALERIA DE ARTE • EMMA THOMAS • FASS • GALERIA BERENICE ARVANI • GALERIA EDUARDO FERNANDES • GALERIA ESTAÇÃO • GALERIA FORTES VILAÇA • GALERIA JAQUELINE MARTINS • GALERIA LEME • GALERIA LOGO • GALERIA LUISA STRINA • GALERIA LUME • GALERIA MARCELO GUARNIERI • GALERIA MARILIA RAZUK • GALERIA MILLAN • GALERIA NARA ROESLER • GALERIA OSCAR CRUZ • GALERIA PILAR • GALERIA RAQUEL ARNAUD • LUCIANA BRITO GALERIA • MENDES WOOD DM • PARALELO ART GALLERY • ZIPPER GALERIA • VERMELHO

2%

BELO HORIZONTE • CELMA ALBUQUERQUE GALERIA DE ARTE

2%

RIBERÃO PRETO • GALERIA MARCELO GUARNIERI

2%

PORTO ALEGRE • BOLSA DE ARTE DE PORTO ALEGRE

4%

CURITIBA • SIM GALERIA • YBAKATU ESPAÇO DE ARTE

In comparison, Brasília, which has no established art market despite having the highest GDP per capita in the country, will host the first edition of SP-Arte Brasília this year. The question is whether the fair will be used as a platform to stimulate the arts system, market development, and collecting in the nation’s capital.

2014 15

scale

SECTORIAL STUDY

SCALE

DISTRIBUTION OF THE GALLERIES ACCORDING TO THE ANNUAL GROSS REVENUE IN 2013 5%

31% 64%

UP TO R$ 3.6 MILLION

The scale, or size, of a gallery not only speaks to its revenue, but also the characteristics of its infrastructure, the number of artists that it represents, the quantity of exhibitions that it shows, the number of jobs it generates, the amount of fairs in which it participates, the number of clients it has in its portfolio, etc.

Next, we deal with some of these aspects that point to the different scales of contemporary art galleries in operation.

BUDGETARY SCALE Of the universe surveyed, 43 galleries provided information on annual gross revenue in 2013, which is very positive, since this is traditionally very difficult data to obtain. Only 2 galleries did not answer this question, a record of positive responses from previous editions of the survey.

Although not encompassing the totality of surveyed galleries, the graphs above show that most of them had revenues of up to R$ 3.6 million per year. The percentage for those galleries is lower than in 2012 when 78% of the galleries were within that ceiling, i.e., sales for galleries has increased, as seen below in relation to the growth rate of revenue.

OVER R$ 3.6 MILLION DID NOT ANSWER

DISTRIBUTION OF THE GALLERIES ACCORDING TO THE ANNUAL GROSS REVENUE IN 2013 20

15

15 10 5

2

4

2

8

7

3

4

R$ 5,000,001 10,000,000

OVER R$ 10,000,001

0 DID NOT RESPOND

UP TO R$ 360,000

R$ 360,001 500,000

R$ 500,001 1,000,000

R$ 1,000,001 3,600,000

R$ 3,600,001 5,000,000

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SECTORIAL STUDY

DISTRIBUTION OF GALLERIES ACCORDING TO ÁREA IN sqm

INFRASTRUCTURE Most Brazilian galleries have between 100 and 500 sqm, with exhibition spaces that are quite large compared to European galleries, for example.

7% 11% 24% 33% 25%

UNDER 100 sqm

NUMBER OF REPRESENTED ARTISTS Most of the galleries represent between 21 and 30 artists. The average is 22.5 artists represented per gallery, i.e., it is a universe of about 1,000 artists, equivalent to the number in the 2nd edition of the Sectorial Study. 15% of the represented artists entered the market for the first time in 2013, compared to 10.8% in 2012.

100 – 300 sqm 301 – 500 sqm 501 – 1000 sqm OVER 1000 sqm

DISTRIBUTION OF GALLERIES ACCORDING TO THE NUMBER OF REPRESENTED ARTISTS 16%

NUMBER OF EXHIBITIONS PER YEAR INDIVIDUAL AND COLLECTIVE EXHIBITIONS One of the main activities of a gallery is to organize individual exhibitions. This is the premier moment for negotiating the works of represented artists because the gallery focuses its efforts on visibility and marketing. The surveyed galleries had, on average, 7 individual exhibitions and 1.5 group exhibitions in 2013. Because the principal place of doing business is the gallery space itself, contrary to the international trend in which fairs have become the main platform for business, it makes sense that Brazilian galleries continue to invest heavily in their exhibition programs.

11% 29%

44%

UP TO 10 ARTISTS 11 – 20 ARTISTS 21 – 30 ARTISTS 31 – 40 ARTISTS 2014 18

SECTORIAL STUDY

PUBLIC VISITORS Besides its commercial vocation, the galleries also serve as cultural centers and receive visitors who are not clients. It is difficult to establish an average because there is great variation in the number of visitors, from galleries that get 50 visitors per month, excluding opening days, to others that get more than 1,000 visitors monthly. The opening of an exhibition is a peak for visits, when the galleries can receive 80-500 visitors a day.

There is no relationship between the number of visitors and gallery revenue, nor between the number of visitors and the size of its infrastructure. There are galleries that handle a large volume of business and get about 100 visitors a month, just as there are small galleries with less than 100sqm, receiving over 100 visits per month, excluded days of openings.

CLIENTS Sales volume is not related to the number of incoming visitors, but the portfolio of clients in the gallery.

There is wide variation in the number of clients in accordance with the size and maturity of the gallery, so it is not possible to establish an average. The galleries surveyed informed to have had less than 50 to more than 300 clients who acquired works in 2013.

NUMBER OF EMPLOYEES E SERVICE PROVIDERS The surveyed galleries have 378 people working daily in their offices; 60% of them reported having increased their teams in 2013. In fact, in 2012 the average was 7.8 employees and in 2013 the average increased to 8.4 persons per gallery.

There is significant variation: some galleries have only 2 people working while others have 27 employees.

The galleries who have revenues up to R$ 3.6 million per year have fewer employees, on average 6 people, slightly below the overall average.

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SECTORIAL STUDY

DISTRIBUTION OF GALLERIES ACCORDING TO THE AVERAGE WAGE

AVERAGE WAGES Most galleries pay between 2 and 5 minimum wage multiples to their employees. The average wage does not vary significantly according to the sales gallery, but what varies is the average of the highest salaries.

The overall average of the highest salaries is R$ 5,500/ month, but for the galleries that handle more than R$ 3.6 million per year that average is R$ 6,800/ month, and those who have lower revenues than R$ 3.6 million per year, the highest average salary is R$ 4,450.

28.8% 66.6%

4.6% FIVE TO TEN MINIMUM WAGES ONE TO TWO MINIMUM WAGES TWO TO FIVE MINIMUM WAGES

NUMBER OF FAIRS PER YEAR In 2013, the galleries that were mapped had 202 participations in national and international fairs, an average of 4.5 fairs per gallery. This average includes galleries that have not participated in any fair and those who participated in up to 14 fairs in the period. In 2012, the galleries had participated in 167 art fairs in total.

Naturally, newer galleries participated in fewer art fairs, and in general, national ones, but surprisingly, some galleries, established since 2010, are already inserted into the international circuit. The highlight in this sense is the gallery Mendes Wood DM, founded in 2010, which participated in the most prestigious fairs in 2013, including Art Basel and Frieze London. Other new galleries like Emma Thomas, Jaqueline Martins, and SIM Galeria are also entering the international circuits prestigious fairs like ARCOmadrid and Frieze.

2014 20

modus operandi

SECTORIAL STUDY

CULTURAL DIMENSION The research covers the primary market for contemporary art, i.e., galleries representing active contemporary artists. The job of representation involves much more than commercializing the works. Commercializing is usually the result of a number of other activities that contribute to the construction and consolidation of the artist’s career.

Among the galleries’ activities, in order of importance: • ORGANIZATION OF INDIVIDUAL EXHIBITIONS • LOGISTICS • FILING AND DOCUMENTATION OF ARTISTS’ WORKS AND PROJECTS • PHOTOGRAPHIC DOCUMENTATION OF EXHIBITIONS • PRE-FINANCING AND CO-PRODUCTION OF WORKS • MAKING NATIONAL AND INTERNATIONAL PARTNERSHIPS FOR POSITIONING OF ARTISTS • PRE-ACQUISITION OF WORKS • PUBLICATIONS • HELP IN PREPARING NOTICES • SUPPORTING PARTICIPATION IN RESIDENCIES • RENTING A STUDIO • ADMINISTRATIVE AND ACCOUNTING GUIDANCE

RELATIONSHIP WITH ARTISTS REPRESENTED The galleries reported that each year there may be changes in the group of artists represented, with the integration of new names and the disconnection from others. Most report to have added, on average, 3.9 new names to their stable of artists, and galleries ceased to represent, on average, 1.5 artists in 2013, which indicates good stability in the group of artists represented.

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SECTORIAL STUDY

RECRUITMENT OF NEW ARTISTS IN THE MARKET This finding speaks to the galleries’ ability to commercially launch new artists, which involves some risk. However it is essential for the renewal and expansion of the sector, and contributes to the professional development of artists, benefiting the arts system as a whole.

The galleries reported that 15% of the represented artists entered the market for the first time in 2013. This percentage has increased since the 2nd edition of the survey, in which the galleries reported that 10% of the represented artists were entering the market for the first time.

FORMALIZATION 26% of the artists represented have formalized and signed contracts with the gallery. This rate has increased since the 2nd edition of the Sectorial Study, where the average was 19%.

PARTNERSHIPS AND COLLABORATIONS More than half of the galleries (65%) have partnerships with other galleries in Brazil and abroad. That figure increased compared to 2012 when 54% of the galleries reported having partnerships. The main objective is to promote artists elsewhere. This increase in the rate of partnerships announces a strategy of professionalization and internationalization of galleries, even the newest, create business opportunities and windows for visibility for their artists beyond the city where they are based.

Regarding partnerships for commercial purposes only, the galleries work in collaboration with architects, interior designers and art consultants. As a rule, these professionals receive 10% commission on the sale value when making intermediation.

SECONDARY MARKET 24% of the galleries operate to some extent also on the secondary market, that represents, for this group, approximately 23% of total revenue.

2014 23

SECTORIAL STUDY

OBSTACLES The main obstacles pointed out by galleries in relation to the development of the sector were, in order of importance: • HIGH TAXES; • BUREAUCRACY; • DIFFICULTY OF ACCESS TO INSTITUTIONAL COLLECTORS; • DIFFICULTIES IN MANAGEMENT AND PLANNING; • DIFFICULTY IN ACCESS TO PRIVATE COLLECTORS; • LACK OF SKILLED LABOR; • ECONOMIC INSTABILITY. As can be seen, the tax issue is not the only bottleneck, as the research also refers to the perception of international collectors on the Brazilian market, presented in chapter International perception.

Indeed, apart from the review of the legal framework related to taxation and international circulation of works of art - a discussion that is already underway between the industry and governmental agencies other aspects, such as administrative and financial management; distinct strategic planning for internal and external markets; the construction, development and management of a solid customer base; the correct and formal management of relations with employees, artists, and suppliers; the development of partnerships and the development of efficient communication and marketing tools and the use of new technologies should be improved, aiming at the growth of the sector in the medium and long term.

OPERATING EXPENSES The expense that weighs the most on gallery budgets is participation in fairs, followed by organizing exhibitions, payroll, infrastructure spending, and production of works. Other reported costs that impact a gallery’s budget are travel, logistics, promotional and communication activities, and taxes.

2014 24

sector growth and dynamics

SECTORIAL STUDY

GROWTH INDICATORS Since data on the sector began to be monitored in 2010, the average annual growth rate among the surveyed galleries was 22.5%. In 2013, growth was more significant: 90% of the galleries reported having increased their revenue, against 81% in 2012 and average growth among all surveyed galleries stood at 27.5%.

Major contributing factors given by the galleries explaining this growth are the Brazilian market’s good current situation, better positioning by the galleries in the national and international markets, and an increase the number of collectors The labor market in the sector also continues to grow, 70% of the galleries reported having increased their teams in 2012 and 60% of those surveyed in 2013 also reported to have increased the number of employees in the period.

SALES, WORKS, AND PRICES The galleries surveyed sold about 6,500 objects in 2013, very close to the number reported in 2012 of 6,700.

Among the surveyed galleries, 65% raised the prices of works for sale, and the average increase, considering the whole group studied, was 9%.

In 2013, the galleries showed a greater variation in the prices of works: from R$ 200 for the least expensive works up to R$ 10 million for the most expensive. In last year’s study, the reported range was from R$ 2,000 to just over R$ 8 million.

Of course, the price and quantity of works sold vary according to the profile and size of the galleries. This indicator fluctuates strongly considering the groups at the extremes of the price ranges, i.e., the galleries that had gross revenues under R$ 1 million and the galleries that had revenues of over R$ 5 million.

AVERAGE PRICE The average price of works sold in the primary market was R$ 24,500, whereas in 2012 the average was R$ 22,000. This average value shows a significant change if we consider the groups are at extreme ends in terms of budget. For galleries that had revenues up to R$ 1 million in 2013, the average price of a work was R$ 11,700.

In the galleries that had revenue over R$ 10 million, the average price per work was R$ 47,000.

2014 26

SECTORIAL STUDY

DISTRIBUTION OF THE TYPE OF WORKS SOLD IN RELATION TO TOTAL WORKS SOLD 2% 11%

1%

24%

19%

OBJECTS SOLD The galleries that had up to R$ 1 million in revenue in 2013 sold on average 80 works, and those galleries with revenues of more than R$ 10 million sold, on average, 200 works. There are also extremes, with galleries that sold only 20 objects, while others sold around 300 objects in 2013.

TYPE OF WORKS SOLD A new addition to this edition of the Sectorial Study is detailing the type of work sold in relation to the total number of works sold through the galleries. Painting, photography and sculpture are the preferred types of works among collectors, and video is still very unrepresentative in sales volume for the galleries. The category ‘others’ appears for a significant portion of works sold, and in it, there are mixed media, collages, assemblages, textile work, prints and various objects.

23% 20% PAINTING PHOTOGRAPHY OTHERS SCULPTURE DRAWING INSTALLATION VIDEO

PLATFORM FOR CONDUCTING BUSINESS IN 2013 1% 10%

30%

58%

BUSINESS PLATFORM The premier location for doing business remains the headquarters of the gallery, where 58% of transactions occur. The fairs are also important, which contribute to 40% of sales. A small revenue stream occurs in other situations, such as customer visits, the gallery website, and partnerships with other commercial locations.

THE IMPORTANCE OF ART FAIRS • 40% of sales are made in national and international art fairs.

• SP-Arte was the fair in which 56% of the galleries had the highest revenue in 2013.

• ArtRio was the most important fair in this respect for 14% of the galleries.

• Art Basel Miami Beach generated the best revenue for 11% of the galleries.

GALLERY NATIONAL FAIRS INTERNATIONAL FAIRS OTHERS 2014 27

SECTORIAL STUDY

PARTICIPATION OF DIFFERENT COLLECTORS ACCORDING TO THE VOLUME OF SALES IN 2013 3% 4%

2% 1%

2%

NACIONAL MARKET X INTERNACIONAL MARKET • 15% of sales were made abroad; • 85% of sales were made to the national market.

The shares of domestic market and international market revenue remained the same for galleries in 2013 when compared to 2012, but the volume of sales to both markets is rising.

12% 76%

PRIVATE BRAZILIAN COLLECTORS PRIVATE FOREIGN COLLECTORS BRAZILIAN INSTITUTIONS FOREIGN INSTITUTIONS BRAZILIAN CORPORATE COLLECTIONS FOREIGN CORPORATE COLLECTIONS OTHERS IN OR OUT OF BRAZIL

PROFILE OF COLLECTORS Sales are driven mainly by private Brazilian collectors, which account for 76% of the revenue for the galleries, a little above the level of 2012 when they were responsible for 71% of sales.

2014 28

SECTORIAL STUDY

PARTICIPATION OF DIFFERENT COLLECTORS ACCORDING TO THE NUMBER OF WORKS SOLD IN 2013 2% 4%

Private foreign collectors are the second largest customer for galleries, and the weight of Brazilian and foreign institutions is almost the same, with Brazilian institutions accounting for 4% of sales. These numbers sadly point, as we have stated on other occasions3, to the contrast that exists between the strength of private collecting and the fragility of institutional collecting in Brazil. It is evident that in addition to lacking resources, institutional collecting, with rare exceptions, also lacks clear and consistent curatorial lines that are in harmony with the vocation of institutions. This explains why Brazilian contemporary production is better represented in private collections in Brazil and in private and institutional collections abroad than in Brazilian public institutions. The national institutional circuit, which should be a pillar of the contemporary art system and an example of promotion and visibility for emerging production, do not have the financial and managerial resources to exercise this role4. In this sense, would be necessary to create convergent initiatives between the public and private spheres so that institutional collecting could develop5.

1% 1%

1%

13% 78%

This year’s study also allowed us to measure the importance of these collectors in relation to the number of works sold because gallerists have hypothesized that there might be a difference in sales volume and number of works sold according to the profile of collectors, but the data shows distribution that follows the same logic:

PRIVATE BRAZILIAN COLLECTORS PRIVATE FOREIGN COLLECTORS BRAZILIAN INSTITUTIONS FOREIGN INSTITUTIONS BRAZILIAN CORPORATE COLLECTIONS FOREIGN CORPORATE COLLECTIONS OTHERS IN OR OUT OF BRAZIL

3

Fialho, Ana Letícia. Arte, um negócio sustentável? Revista SeLecT, ano 2, ed. 07, agostosetembro, 2012.

4

About the subject, see: FIALHO, Ana Letícia; GOLDSTEIN, Ilana.

“Economias” das exposições de arte contemporânea no Brasil: notas de uma pesquisa. In CALABRE, Lia (org.). Políticas culturais: pesquisa e formação. São Paulo: Itaú Cultural/Rio de Janeiro: Fundação Casa de Rui Barbosa, 2012. Available at: http:// d3nv1jy4u7zmsc.cloudfront.net/ wp-content/uploads/2013/01/ Politica-Culturais-Pesquisa-eForma%C3%A7%C3%A3o.pdf

5

FIALHO, Ana Letícia. O Ibram, o mercado de arte, os desacertos das políticas públicas e a salvaguarda do patrimônio cultural nacional. Fórum Permanente, janeiro de 2014. Available at: http://www.forumpermanente. org/imprensa/instituto-brasileirode-museus-ibram/ibram-mercado-de-arte-politicas-publicassalvaguarda-patrimonio-cultural

2014 29

international insertion

SECTORIAL STUDY

The internationalization of the Brazilian market is part of a broader process of internationalization of the arts system as a whole and its growing international visibility – a phenomenon that merits a separate analysis. In relation to the market, this process should not be assessed only by reference to the volume of sales and exports. There are other key factors that speak of insertion and international visibility gained by Brazilian galleries. Among them, the international team of artists represented, the inclusion of artists in international collections, the incentive for artists to participate in international events, the portfolio of customers and partners abroad, and participation in fairs. We will review some of them in detail in order to assess the international insertion of Brazilian galleries in the primary market.

INTERNATIONALIZATION OF THE PRIMARY MARKET FOR CONTEMPORARY ART INTERNATIONALIZATION FOR THE TEAM OF ARTISTS Among the surveyed galleries, 75% work with artists from other countries, and have, on average, 20% of their artists of foreign origin, slightly less than the 22.5% observed in 2012. There are galleries that have no international artists and those that have more than 50% of the represented artists being of foreign origin. As noted in the previous report, bureaucratic and tax barriers to import works of art do not prevent Brazilian galleries from working with foreign artists, but this is certainly an aspect that hinders a greater presence of foreign artists on the national market.

INTERNATIONALIZATION STRATEGIES OF GALLERIES Participating in fairs, establishing relationships with international institutions, establishing partnerships with galleries abroad, and representing international artists are all seen as the main strategies for the internationalization of galleries.

The galleries also highlighted the importance of biennales and institutional exhibits in the development of their business. While recognizing the importance of supporting the participation of their artists in international institutional events, 42% of the galleries can actually offer this kind of support, in general, financially and logistically, such as travel expenses for artists, transportation, and support for the production of works.

• 42% of the galleries have partnerships with foreign galleries, a rate 12% higher than in 2012.

• 75% of the galleries participated in international art fairs - 25% above the average of 2012 a record since such data started being tracked.

2014 31

SECTORIAL STUDY

INTERNACIONAL SALES The Brazilian market made up about 85% of total sales, and the international market was responsible for 15% of sales in 2013, just as in 2012. One must consider, however, that the revenue for the galleries rose, so both national and international sales increased.

As noted earlier, internationalization is important to the business of the galleries by the very nature of contemporary art, whose process of recognition and appreciation goes necessarily through the international circuit. Therefore, though sales and financial returns from participation in international trade fairs, for example, are less significant than in the domestic market, international promotional activities are important because they impact the symbolic recognition and appreciation of artists and the gallery’s own reputation, which thus impacts their business.

SALES VOLUME At least 71% of surveyed galleries sold works abroad in 2013, 11% more than in 2012.

A comparative analysis of sales in 2011, 2012, and 2013 shows that the number of galleries as well as the volume of sales abroad both increased. In 2011, 21 galleries reported foreign sales, in 2012 there were 25, and in 2013, 32 reported having made sales ​​ overseas. Most reported sales of over US$ 100,000, while in 2012, most had been below this amount.

The number of galleries that did not report any sales abroad increased, but the number of galleries who did not respond significantly decreased, so in this edition of the study, we have more information about this topic than in previous editions.

A significant finding is that the number of galleries whose sales are in the groups with higher annual revenue is increasing.

2014 32

SECTORIAL STUDY

NUMBER OF GALLERIES ACCORDING TO SALES ABROAD 2011-2013 NO FOREIGN SALES

Nยบ GALERIES 2011 Nยบ GALERIES 2012 Nยบ GALERIES 2013

8

4 5

DID NOT RESPOND

2

US$ 10,000,001 20,000,000

1

US$ 5,000,001 10,000,000

2

US$ 500,001 5,000,000

3

US$ 100,001 500,000

3

US$ 50,001 100,000

3

2

10 8

7

4

1

0

2

12

5

US$ 10,001 - 50,000 US$ 1-10,000

14

11

4

6

13

8

10

12

14

16

DESTINATIONS OF SALES The trend towards diversification of sales destinations continues.

Sales were made to 29 countries in 2013, while in 2012 the galleries had reported sales to 25 countries.

The U.S., UK, Switzerland, and France are seen as major destinations. Colombia, which had already appeared in previous research, now stands as one of the main destinations mentioned by the galleries.

2014 33

SECTORIAL STUDY

ALL DESTINATIONS GIVEN

Argentina Austria Belgium Canada Chile China Colombia Denmark France

Greece Hong Kong Italy Mexico Monaco Morocco

Netherlands Norway Oman Peru Portugal Saudi Arabia Singapore Spain Switzerland Turkey

United Arab Emirates United Kingdom United States Venezuela

PROFILE OF INTERNATIONAL COLLECTORS IN SALES: • 12% international collectors; • 3% international institutions; • 1% international corporate collections.

IN NUMBER OF WORKS: • 12% international collectors; • 1% international institutions; • 1% international corporate collections.

The percentages were virtually unchanged from 2012. The only interesting point to note, in this new edition, is the breakdown between weight in the volume of sales and the number of works sold. With this, we can see that international institutions invest more in value than in the number of works: 3% in revenue and 1% in the number of works sold, a percentage offset by Brazilian private collectors who have greater weight in the volume of works sold: 78%, compared to sales volume: 76%.

2014 34

SECTORIAL STUDY

INCREASING INSTITUTIONAL INSERTION Private collectors have greater weight in relation to revenue, but the international institutions, representing only 3% of revenue, are a priority for the galleries who work internationally because of the high visibility and power of legitimization they have.

Previous editions of the study had already pointed out that the artists represented by the Brazilian galleries surveyed are inserted in more than 130 institutions around the world. In this edition, we seek to refine this information in order to identify which institutions, which artists, and how many works enter international institutional collections each year.

Among the galleries surveyed, 24% reported that in 2013 made ​​the sale of 126 works to 24 international institutions. It is evident that the institutional are concentrated in Europe and the United States, the main destinations of international sales since we began tracking the data. Not all galleries answered this question, we believe that the expansion and diversification of institutions that collect the artists represented by galleries Brazilian is an ongoing process and certainly more comprehensive than the map that we present below:

INSTITUTIONS THAT HAVE ACQUIRED WORKS OF SURVEYED GALLERIES

20 4

2 21

13 8

24

7 15

6

11

10

24

9

1

3

1.1 Art Gallery of York, Toronto, Canadá 2.2 Astrup Fearnley Museum, Oslo, Norway 3.3 Carnegie Museum of Art, United States 4.4 Centre Georges Pompidou, Paris, France 5.5 Colección DAROS-Latinamerica, Zurich, Switzerland 6.6 Cisneros Fontanals Art Foundation (CIFO), Miami, United States 7.7 Deutsche Bank, New York, United States 8.8 Fondation Cartier, Paris, France 9.9 Fonds National d’Art Contemporain, Paris, France 10 Fundación Cisneros, Colección 10.

Patricia Phelps de Cisneros, New York, United States 11 JP Morgan Chase Art Collection, 11.

New York, United States 12 Museo de Arte Latinoamericano 12. de Buenos Aires, Argentina 13 Middlesbrough Institute of 13.

Modern Art, Middlesbrough, England 14 Migros Museum, 14.

Zurich, Switzerland 15 MoMA, New York, United States 15.

16 Museo Banco de La Republica, 16.

Bogota, Colombia 17 Museo de Arte de Lima (MALI), 17.

Lima, Peru 18 National Museum of Athens, 18.

Athens, Greece 19 Palm Springs Desert Museum, 19.

Palm Springs, United States 20 Saatchi Collection, 20.

London, England 21 Tate Modern, London, England 21.

22 Televisa Foundation, 22.

Madrid, Spain 23 Guggenheim Museum, 23.

New York, United States 24 Thyssen Bornemisza, 24.

Vienna, Austria

24

22 5

14

18

19 16

17

12

2014 35

SECTORIAL STUDY

EXPORTS The volume of exports for the sector as a whole more than doubled in 2013. Exports by the galleries belonging to Latitude Project also increased significantly, but did not double.

EVOLUTION OF EXPORTS FOR THE ART MARKET AND LATITUDE PROJECT IN 2011, 2012 AND 2013

6

YEAR

AMOUNT EXPORTED ART MARKET (TOTAL)

NUMBER OF EXPORTING COMPANIES (TOTAL)

AMOUNT EXPORTED LATITUDE PROJECT

NUMBER OF EXPORTING COMPANIES LATITUDE PROJECT

2011

$ 60,144,054

198

$ 18,609,624

22

2012

$ 51,170,357

160

$ 27,130,165

19

2013

$ 127,439,480

192

$ 51,314,577

23

In 2012, the Latitude Project galleries were responsible for 53% of total exports for the sector; in 2013, that percentage dropped to 40%.

That difference between the Latitude Project galleries total export volume from 2012 to 2013 might be understood in the context of high visibility and consecration of historic names of Brazilian art in international auctions and retrospective exhibitions, such as those highlighted by Petterson, in chapter International perception below, which leads to an appreciation of modern and historical contemporary art.

This phenomenon may have boosted export growth in the secondary market, which works with already established artists, more so than in the primary market, which is represented by galleries in the Latitude Project. Nevertheless, the sector’s exports, considered as a whole and also the corresponding part to the Latitude Project galleries, reached record levels in 2013.

6

Source: Latitude Project Commercial Intelligence/ Planning and Budget Unit Apex-Brasil.

Amounts in US Dollars, FOB. 7

It is worth noting that the number of exporting companies in the Latitude Project (23) differs from the number of companies reporting have any sales abroad (32).

This difference may indicate that some galleries do not export directly, using intermediaries such as trading companies for the export of works sold abroad.

One should also consider that the Latitude Project galleries represent only 12% of the universe of exporters in the sector as a whole, considering the total number of exporting companies in 2013.

That is to say, the proportional weight of contemporary art galleries in the primary market and belonging to the Latitude Project is much 7 higher than the others in total exports . Such importance on contemporary art galleries in primary market exports relates to the insertion and international visibility of this market segment, which was also highlighted by ArtTactic research, as we shall see in the next chapter.

The galleries’ increased participation in international fairs is undoubtedly a determinant of export growth. In 2013, 34 of 45 respondent galleries participated in international fairs, totaling 106 participations.

2014 36

SECTORIAL STUDY

MAIN EXPORT DESTINATIONS EXPORT DESTINATIONS IN 2011, 2012 E 2013 RANKING BY COUNTRY

2011

AMOUNT EXPORTED LATITUDE PROJECT

MARKET SHARE

N0

RANKING BY COUNTRY

2012

8

NUMBER OF EXPORTING COMPANIES LATITUDE PROJECT

AMOUNT EXPORTED LATITUDE PROJECT

MARKET SHARE

N0

1 USA

$ 7,035,014

37.8%

19

1 USA

$ 10,036,044

36.91%

13

2 FRANCE

$ 5,424,671

29%

6

2 REINO UNIDO

$ 6,383,607

23.50%

8

3 SWITZERLAND

$ 3,153,642

17%

5

3 SWITZERLAND

$ 5,635,888

20.80%

4

4 UNITED KINGDOM

$ 1,392,207

5.14%

5

$ 988,500

3.65%

3

$ 2,693,919

10%

$ 1,952,387

10.5%

8

4 UNITED KINGDOM

5 UAE

$ 318,000

1.7%

1

5 HONG KONG

OTHERS

$ 725,910

4%

RANKING BY COUNTRY 2013

AMOUNT EXPORTED LATITUDE PROJECT

OTHERS

MARKET SHARE

NUMBER OF EXPORTING COMPANIES LATITUDE PROJECT

1 USA

$ 30,703,244

60%

19

2 UNITED KINGDOM

$ 7,370,009

14%

12

3 SWITZERLAND

$ 5,115,053

10%

6

4 FRANÇA

$ 2,073,128

4%

10

5 SPAIN

$ 1,293,185

2.5%

6

OTHERS

$ 4,759,958

9.5%

• The 5 main export destinations in 2013 were: the United States, United Kingdom, Switzerland, France and Spain.

• The 4 main destinations remained the same over the past 3 years, while the 5th position has fluctuated, showing that galleries are searching for new markets.

8

Data referes only to galleries in the Latitude Project, based on total exports in 2013: $51,314,577. Source: Latitude Project Commercial Intelligence/ Planning and Budget Unit Apex-Brasil. Amounts in US Dollars, FOB.

The United States is the main destination of sales and exports, since the industry began to be monitored. Its importance speaks to total revenue and also to the number of galleries that export to that destination: 19 in 2013. Exports shown are related to, but not exclusive to, Brazilian participation in the fair, Art Basel Miami Beach, which has broken records in recent years. Today some Brazilian galleries also participate in other fairs in the country, such as the Armory Show and Frieze New York. In 2013, there were gallery reports of 27 participations in American fairs. Qualitative research reports that outside of American fairs, sales in the U.S. also occur. The share of exports to the United States increased significantly relative to exports to other markets; however, there was an increase in the volume also for the United Kingdom and France, as well as the rise of Spain, which ranked fifth in 2013. The exception is Switzerland, which fell slightly from 2012 to 2013, but remains in third place, as in 2012. The number of exporting galleries to each of these destinations also increased compared to 2012.

2014 37

SECTORIAL STUDY

The UK strengthened in 2013 and remains in the second position as the most important destination. Exports to the country and the number of exporting galleries increased compared to 2012. The increase in exports to the UK is related to the increasing participation of Brazilian galleries at Frieze London and Frieze Masters, but, as in other countries, exports may occur outside the fairs. In 2013, 10 Latitude Project galleries from different generations attended these fairs: A Gentil Carioca, Galeria Berenice Arvani, Galeria Fortes Vilaça, Galeria Jaqueline Martins, Galeria Luisa Strina, Galeria Millan, Galeria Nara Roesler, Mendes Wood DM, and Vermelho. The total number of exporting galleries, 12, is slightly larger than the number of galleries participating in fairs.

Switzerland ranks third in 2012 and 2013. The volume exported to the country is high, but the number of galleries from the Project that exported to the country is less than the number of galleries from the Project that exported to other major destinations. Again, the export volume is related, no doubt, to the participation of important galleries from the Brazilian market, traditionally found in the Art Basel fair, as Galeria Fortes Vilaça and Galeria Luisa Strina. However, the number of galleries from the Project exporting to Switzerland is a little larger than Brazilian participation in the fair. In 2013, 6 Latitude Project galleries exported to Switzerland, while 3 attended the Art Basel fair: Galeria Fortes Vilaça, Galeria Luisa Strina and Mendes Wood DM. France follows at number 4, and the volume of exports and the number of Project galleries that exported to the country increased from 2012 to 2013. There was a renewed interest in the Project galleries to participate in the French fair, FIAC, a total of 5 in 2013.

Spain emerges as a major target for the first time since the economic crisis was spread in that country. Traditionally, however, Spain, since the late 90s, is an important market for Brazilian galleries, many of which made their ​​ international debut in ARCOmadrid and consider the country to be a gateway to Europe. This renewal of Spain as a destination is also related to the presence of the galleries at the fair: in 2013 there were 12 participations, including beginner galleries on the international market, such as Galeria Marcelo Guarnieri and Galeria Pilar.9

9

These galleries were part of a Latitude Project action called the Incubator Project, which focused on consulting for galleries that were starting to participate in European fairs.

2014 38

SECTORIAL STUDY

In 2012, Hong Kong was in 5th place in the ranking of exports, a fact related to the presence of Brazilian galleries at Art Basel Hong Kong. In 2012 and 2013, 3 Project galleries participated in the fair: Casa Triângulo, Mendes Wood DM e Galeria Nara Roesler. In 2013, however, the country has ceased to be the 5th destination of exports, falling to the 7th position. The 6th position is occupied by Colombia, a market that is growing in Latin America and was also named in qualitative research as an important sales destination for Brazilian galleries. In 2013, the fair ArtBo, held in Bogotå, had record Brazilian participation, with a total of 10 galleries, second only to galleries from Colombia itself.

Interestingly, 5th place in exports has fluctuated, while the first 4 positions remain the same from 2011. The U.S., UK, Switzerland and France are more mature markets, and Spain, which had been an important market, reappears, certainly due to the importance of ARCOmadrid as a platform for Brazilian galleries. The presence of the United Arab Emirates and Hong Kong, in 5th position in 2011 and 2012, indicates that there is also a part of the galleries in search of new, but not yet mature, destinations for their business. This search for diversification of destinations was also pointed to in the responses of the galleries regarding the destinations of international sales, which reached 29 countries in 2013.

2014 39

international perception

SECTORIAL STUDY

The Latitude Project and ArtTactic have created a partnership whose goal is to bring in a point of view from outside of the art market in Brazil, which contributes reflection on its development and internationalization.

The next chapter presents the result of this partnership, which translates into a unique survey, coordinated by Anders Petterson, about the perception of international collectors on the Brazilian market and on its modern and contemporary art. Such collectors are, after Brazilian private collectors, the main customers of the galleries included in the Latitude Sectorial Study, which is why we defined this focus for this first collaboration. Petterson also presents recent data on the performance of Brazilian works at international auctions, in an interesting analysis that gives clues about how the Brazilian secondary market functions, about which we still have little information.

INTERNATIONAL COLLECTORS’ PERCEPTION ON BRAZILIAN ART MARKET A RESEARCH BY ANDERS PETTERSON, ArtTactic9

9

Methodological note about the Sample Structure: Total number of collectors: 105. Female: 48.5%, Male: 51.5%. Geographical breakdown: US 29%, UK 23%, rest of Europe 20%, Asia 11%, rest of the World 17%. Online survey conducted by ArtTactic in February 2014

2014 41

SECTORIAL STUDY

HOW DO YOU FEEL ABOUT THE BRAZILIAN MODERN AND CONTEMPORARY ART MARKET IN THE NEXT 12 MONTHS 3%

ART MARKET CONFIDENCE Positive short-term outlook among international collectors: 54% of international collectors surveyed by ArtTactic are positive to the Brazilian Modern and Contemporary art market in the next 12 months, 43% are neutral and only 3% are negative to the short-term outlook for this market.

High long-term confidence in the Modern and Brazilian art market: 66% of the international collectors feel confident about the Brazilian art market for the next 5 years, only 2% are negative and 32% remain neutral.

Increased international presence of Brazilian artists and galleries were mentioned as important factors supporting the Brazilian art market in the next 12 months. Particularly Lygia Clark’s upcoming solo show at MoMA in New York in May 2014; high expectations for the Bienal de São Paulo this year; the SP-Arte fair has a record number of international participants and key Brazilian artists are being represented by important galleries abroad. 33% of the collectors said that the Brazilian art market’s international presence was its main strength compared to other Latin American art markets.

43% 54%

POSITIVE NEUTRAL NEGATIVE

HOW DO YOU FEEL ABOUT THE BRAZILIAN MODERN AND CONTEMPORARY ART MARKET IN THE NEXT 5 YEARS

Major sports events could give the Brazilian art market a boost in the next two years: More attention and focus on Brazil in the near term due to FIFA World Cup and the Olympic Games 2016 is also likely to benefit the Brazilian art market.

2%

32% 66%

POSITIVE NEUTRAL NEGATIVE

Sample size: 105

2014 42

SECTORIAL STUDY

KEY STRENGTHS OF THE BRAZILIAN ART MARKET Strong perception of quality in Brazilian art: 88% of the collectors said that the quality of Brazilian artists and their art were the main strength of the Brazilian art market.

Sophisticated collector base: 55% of the collectors surveyed believed that the sophistication and quality of the collectors involved in the Brazilian art market is one of its main strengths. Several collectors mentioned that there were fewer speculators involved in this market compared to other new growth art markets, such as Asia.

Mature gallery and public art infrastructure: 46% of the survey respondents said that the gallery sector in Brazil was the most important strength for the Brazilian art market, and a major catalyst for bringing Brazilian artists and art to the attention of international collectors. 28% of the collectors said that the art fairs and biennials in Brazil was the market’s key strengths, followed by 21% who said that Brazil’s art museum sector was a key factor in the development of the Brazilian art market.

WHAT DO YOU SEE AS THE CURRENT STRENGHS OF THE BRAZILIAN ART MARKET ARTISTS COLLECTOR BASE GALLERY SECTOR INTERNATIONAL PRESENCE ART FAIRS BIENNALES MUSEUM SECTOR AUCTIONS GOVERNMENT SUPPORT ART SCHOOLS

0

20%

40%

60%

80%

100%

Sample size: 105

2014 43

SECTORIAL STUDY

KEY CHALLENGES TO FURTHER DEVELOPMENT OF THE BRAZILIAN ART MARKET Art export bureaucracy remains a major hurdle in the market: 79% of the international collectors said that the ‘bureaucracy of the Brazilian export system’ is a major impediment to the development of the Brazilian art market, this was followed by 65%, who said ‘high logistic costs’ are an impediment and 43.5% said that ‘high taxes’ was preventing them from engaging more with this market.

WHICH OF THE FOLLOWING FACTORS DO YOU FEEL ARE THE BIGGEST HURDLES FOR THE BRAZILIAN ART MARKET? BUREAUCRACY OF THE BRAZILIAN EXPORT SYSTEM HIGH LOGISTIC COST HIGH TAXES

0

20%

40%

60%

80%

100%

Sample size: 105

2014 44

SECTORIAL STUDY

HAVE YOU EVER BOUGHT AN ART WORK FROM A CONTEMPORARY BRAZILIAN ARTIST?

58%

42%

NO YES

IF YES, HOW MANY TIMES HAVE YOU BOUGHT BRAZILIAN ART? 14%

43%

COLLECTOR BUYING TRENDS More than 40% of the collectors surveyed have bought Brazilian art: 42% of the international collectors surveyed have bought Brazilian modern and contemporary art. Among these collectors, 78% are repeat buyers, where 21% have bought between 2-5 times, 43% have bought Brazilian art between 5 and 10 times and 14% have bought more than 10 times.

More collectors are likely to start buying Brazilian art in the next 5 years: 74% among the collectors who stated that they hadn’t yet bought any Brazilian art, said they were very likely to do so in the future.

Art fairs abroad are the most important channel for finding and buying Brazilian art: 62.5% of the collectors surveyed have bought Brazilian art through art fairs outside Brazil. 25% have bought from a gallery abroad, 19% have bought from a gallery in Brazil, 12.5% have bought from an auction outside Brazil and 12.5% have bought from an art fair in Brazil.

Online buying: Only 6% of the collectors have bought Brazilian art through an online art gallery or auction. With 38% of art collectors having bought art directly online (click-and-buy), according to a recent ArtTactic survey, the online art market could become an important channel for Brazilian artists to reach international collectors in the next 5 years.

22% 21%

5 - 10 TIMES ONCE 2 - 5 TIMES 10 OR MORE TIMES

WHICH BRAZILIAN GALLERIES HAVE YOU BOUGHT FROM? Vermelho, Galeria Nara Roesler, Mendes Wood DM, A Gentil Carioca, Baró Galeria, Galeria Millan, Galeria Luisa Strina, Galeria Fortes Vilaça, Zipper Galeria, Galeria Almeida & Dale.

IF YOU HAVE BOUGHT BRAZILIAN MODERN OR CONTEMPORARY ART, WHERE DID THIS TAKE PLACE? ART FAIR OUTSIDE BRAZIL GALLERY OUTSIDE BRAZIL GALLERY IN BRAZIL ART FAIR IN BRAZIL AUCTION OUTSIDE BRAZIL AUCTION IN BRAZIL ONLINE

0

10%

20%

30%

40%

50%

60%

70%

Sample size: 105

2014 45

SECTORIAL STUDY

IF YOU HAVEN’T YET BOUGHT BRAZILIAN ART, ARE YOU LIKELY TO DO SO IN THE FUTURE?

26% 74%

NO YES

AUCTION TRENDS BRAZILIAN MODERN AND CONTEMPORARY ART AUCTION MARKET 2014 The auction sales of Brazilian art is up 92% between 2012 and 2013 driven by increasing demand for Brazilian Modern art: In 2013, Brazilian Modern art sales were up 111%, from $8,339,100 to $17,605,300 compared to 2012. This sharp increase was especially due to high value consignments from Lygia Clark and Sergio Camargo, who had 4 lots in the top ten of of last year’s modern and contemporary Latin American Art sales. These lots sold for a combined value of $6,300,000, which essentially represents 35.8% of the total Brazilian modern art sales revenues in 2013.

Contemporary Brazilian art auction market cools in 2013: Despite the increase in auction sales of Modern Brazilian art, Contemporary Brazilian art saw a 28% decrease between 2012 and 2013.

Part of this drop in sales have been triggered by a fall in auction sales among Brazil’s two leading contemporary stars; Beatriz Milhazes and Adriana Varejão. Milhazes auction sales of paintings fell from $5,726,000 in 2012 to $850,000 in 2013 (85% decrease) and auction sales of Adriana Varejão’s paintings fell from $1,168,000 in 2012 to $1,000,000 in 2013 (14.3% decrease).

Significant increase in market share for Brazilian art in 2013: Market share of the Brazilian Modern art auction market is up from 10% in 2012 to 29% in 2013 of the overall Latin American Modern art auction market at Sotheby’s, Christie’s and Phillips. When looking at the trendline of Brazilian art sales from 2003 to 2013, we note an exponential growth, which contrasts with the stable sale figures of the overall Latin American modern and contemporary art sales.

Market share of Brazilian contemporary art in the Latin American art sales fell from 60.8% to 20.7% between 2012 and 2013. A large part of this drop was caused by a slowdown in auction sales by its two main artists: Varejão and Milhazes.

The average auction price for modern Brazilian art has increased by 88% from $104,835 up to $197,474 between 2012 to 2013. This is a record average price for Modern Brazilian art.

The average auction price for contemporary Brazilian art has decreased by 27% from $33,706 to $24,714 between 2012 and 2013.

DATA SOURCE: Christie’s, Sotheby’s and Phillips Latin American sales in New York

The top contemporary Brazilian auction performer of 2013 was Vik Muniz, who had six of his works among the top 10 sales of Brazilian Contemporary art last year, and accounted for 40.6% of the total Brazilian Contemporary art sales achieved in Sotheby’s, Christie’s and Phillips Latin American sales in 2013.

2014 46

SECTORIAL STUDY

LATIN AMERICAN AUCTION SALES (CHRISTIE’S, SOTHEBY’S AND PHILLIPS) 35%

5%

$0

0% MAY-12

MAY-11

MAY-09

MAY-08

MAY-07

MODERN LATIN AMERICAN

NOV-13

$ 10,000,000

MAY-13

10%

NOV-12

$ 20,000,000

NOV-11

15%

NOV-10

$ 30,000,000

MAY-10

20%

NOV-09

$ 40,000,000

NOV-08

25%

NOV-07

$ 50,000,000

NOV-06

30%

MAY-06

$ 60,000,000

CONTEMPORARY LATIN AMERICAN BRASILIAN MARKET SHARE (%)

BRAZILIAN MODERN & CONTEMPORARY AUCTION SALES (CHRISTIE’S, SOTHEBY’S AND PHILLIPS)

$ 12.000.000 $ 10.000.000 $ 8.000.000 $ 6.000.000 $ 4.000.000 $ 2.000.000

BRASILIAN MODERN ART

2ND HALF 2013

HALF 2012

1ST HALF 2013

2

ND

1ST HALF 2012

2ND HALF 2011

HALF 2011 1

HALF 2010

ST

2

ND

1ST HALF 2010

2ND HALF 2009

1ST HALF 2009

2ND HALF 2008

1ST HALF 2008

2ND HALF 2007

HALF 2006

1ST HALF 2007

2

ND

1ST HALF 2006

2ND HALF 2005

HALF 2005 1

HALF 2004

ST

2

ND

1ST HALF 2004

2ND HALF 2003

1ST HALF 2003

$0

BRASILIAN CONTEMPORARY ART

2014 47

SECTORIAL STUDY

PREÇOS MÉDIOS EM LEILÕES DE ARTE LATINO-AMERICANA DE ARTE MODERNA & CONTEMPORÂNEA BRASILEIRAS (CHRISTIE’S, SOTHEBY’S AND PHILLIPS)

ARTE MODERNA BRASILEIRA ARTE CONTEMPORÂNEA BRASILEIRA

$ 250.000 $ 200.000 $ 150.000 $ 100.000 $ 50.000

2ND HALF 2013

1ST HALF 2013

2ND HALF 2012

1ST HALF 2012

2ND HALF 2011

1ST HALF 2011

2ND HALF 2010

1ST HALF 2010

2ND HALF 2009

1ST HALF 2009

2ND HALF 2008

1ST HALF 2008

2ND HALF 2007

1ST HALF 2007

2ND HALF 2006

1ST HALF 2006

2ND HALF 2005

1ST HALF 2005

2ND HALF 2004

1ST HALF 2004

2ND HALF 2003

1ST HALF 2003

$0

LATIN AMERICAN ART AUCTIONS IN 2013 MODERN ARTIST (CHRISTIE’S, SOTHEBY’S AND PHILLIPS) MODERN ARTIST

LOT’S NAME

LYGIA CLARK SÉRGIO CAMARGO LYGIA CLARK CÂNDIDO PORTINARI SÉRGIO CAMARGO ALFREDO VOLPI ABRAHAM PALATNIK SÉRGIO CAMARGO SÉRGIO CAMARGO ALFREDO VOLPI

Contra Relevo 5 Objeto N.7 Untitled (Relief No 21/52) Bicho invertebrado Meninos soltando pipas Untitled Fachada Sequencia Visual S-51 Untitled (Relief No. 347), 1971 Relief No. 285 Bandeirinhas horizontais com mastro

HAMMER PRICE IN $

$1,850,000.00 $1,800,000.00 $1,550,000.00 $1,200,000.00 $700,000.00 $650,000.00 $650,000.00 $650,000.00 $620,000.00 $540,000.00

AUCTION HOUSE

DATE OF SALE

PHILLIPS SOTHEBY'S PHILLIPS CHRISTIE'S SOTHEBY'S CHRISTIE'S CHRISTIE'S PHILLIPS CHRISTIE'S CHRISITIE'S

MAIO-13 NOV-13 NOV-13 MAI-13 MAI-13 MAI-13 NOV-13 NOV-13 NOV-13 MAI-13

LATIN AMERICAN ART AUCTIONS IN 2013 CONTEMPORARY ARTIST (CHRISTIE’S, SOTHEBY’S AND PHILLIPS) ARTISTA CONTEMPORÂNEO

BEATRIZ MILHAZEZ VIK MUNIZ OS GÊMEOS VIK MUNIZ VIK MUNIZ VIK MUNIZ JAC LEIRNER VIK MUNIZ TUNGA VIK MUNIZ

LOT’S NAME

O Casamento Jackie O (from pictures of Diamonds) Glass House Weeping woman after Picasso Bust of a Woman Napolean Names Promotheus, after Titian Dark Table with Light The Icebergs, after Frederic E. Church

HAMMER PRICE IN $

$850,000.00 $130,000.00 $120,000.00 $60,000.00 $55,000.00 $55,000.00 $42,000.00 $40,000.00 $32,000.00 $32,000.00

AUCTION HOUSE

DATE OF SALE

CHRISTIE'S PHILLIPS PHILLIPS CHRISTIE'S CHRISTIE'S SOTHEBY'S PHILLIPS PHILLIPS SOTHEBY'S PHILLIPS

NOV-13 NOV-13 MAI-13 MAI-13 MAI-13 MAI-13 MAI-13 NOV-13 MAI-13 NOV-13

2014 48

SECTORIAL STUDY

CONCLUSIONS The 3rd edition of Latitude Sectorial Study about the Market for Contemporary Art in Brazil gains strength based on three years of systematic collection of information. Now we can say not only that there is a growing trend, as indicated in earlier editions, but also that the Brazilian primary market of contemporary art does live in an extremely dynamic period, reflected in the steady increase in revenue, the participation of new galleries, artists and collectors, the professionalization and renewal of existing business models, and the increasing international participation and recognition of its agents.

The perception that the Brazilian market is experiencing a very positive period is confirmed by research conducted by ArtTacticts, as presented by Petterson in chapter International perception. Among international collectors surveyed, 66% said they had confidence in the growth of the sector over the next five years, and 74% of them said they intended to acquire works from the Brazilian market in the same period. This research also points out that one of the strengths of the Brazilian market is the growing international presence of artists and galleries, which is seen as a competitive advantage for Brazil in relation to other Latin American markets.

More than international visibility, the Brazilian contemporary art market and its agents are living an effective and rapid process of internationalization, and the Latitude Project certainly has an important role in this regard. Today the Project operates in 7 areas: International Fairs, Prospective Missions, Art Immersion Trips, International Promotion, Communication, Training and Business Intelligence10.

The growth and international insertion of the sector translate into numbers: the average annual increase in revenue was approximately 22% from 2010 to 2012 and rose to 27.5% in 2013, even though Brazil’s economic growth has slowed. International insertion can be demonstrated by the increasing participation of galleries surveyed in national and international art fairs – from 167 in 2012 to 202 in 2013 – and especially by an increase in exports by almost 90% from 2012 to 2013, as well as the diversification of destinations of international sales, which reached 29 countries in the period.11

10

More information on each can be found at: latitudebrasil.org.

11

Both the Latitude Study and ArtTactic point to international art fairs as the main platform for the addition of international collectors. The growing participation in international fairs by galleries, with the support of Latitude Project, is therefore essential to increase the base of international collectors.

2014 50

SECTORIAL STUDY

12

It may be relevant in the next report, to expand the intersection of data and conduct analysis by gallery segments, with a look at both the company age and annual gross revenue, showing in more detail the differences between galleries in relation to the scale and generation.

13

While the discussion on the review of the tax regime applied to the art market progresses slowly, a different normative stirred the market recently. Decree 8,124, published in October 2013, which regulates the creation of the Brazilian Institute of Museums (IBRAM) and defines the guidelines for the implementation of a sectorial policy for museums, also provides a kind of interference in the administration and marketing of artistic works considered to be in the ‘public interest’, even if they are privately owned, unsettling gallerists, art dealers, collectors, and artists.

The controversy is the possibility of private property to be declared of public interest and therefore subject to state control. The decree also gives the right of first choise to IBRAM and museums in its network for the acquisition of works of this nature that are offered for sale at auction, and proposes a national register of public works. The concept of ‘public interest’ is left open, and any interested person has the right to ask the president of IBRAM to declare a work to be of public interest. Such points were questioned, rightly, by market agents and lawyers. Since the controversy started, the current president of IBRAM, Angelo Oswaldo de Araújo Santos, has been meeting with stakeholders in the arts system in order to renew dialogue and seek a solution to the impasse. Such openness has allowed the entry of an agenda of issues that go beyond the controversial points of the decree, which ultimately may lead to a significant advancement of the visual arts country’s public policies.

On this subject see: Ana Letícia.

O IBRAM, o mercado de arte, os desacertos das políticas públicas e a salvaguarda do patrimônio cultural nacional. Fórum Permanente, fevereiro de 2014. Available at: http://www.forumpermanente.org/ imprensa/instituto-brasileiro-demuseus-ibram/ibram-mercadode-arte-politicas-publicas-salvaguarda-patrimonio-cultural

The strength of newer galleries draws attention in this scenario.

Among the surveyed galleries, 33% have been established since 2010. The new generation of galleries contributes significantly to the expansion and renewal of the sector. They introduce more new artists to the market and go through a process of professionalization, internationalization and growth that is faster than the galleries that are working for more than a decade12.

These factors, taken together, indicate that we are seeing consistent growth, a result of the maturing of the sector and the international recognition of the contemporary production represented. Although growth rates may eventually decline in coming years, the sector as a whole should consolidate.

But there are still challenges to be faced. Some of the major obstacles to market development, already mentioned in previous editions of the Sectorial Study, pertain to high taxes and customs barriers for international circulation works. Such barriers have been discussed

by ABACT and the government, but it is still early to know if we are actually heading towards a better adaptation of existing legislation and public policies considering the specificities of the sector and the art system in general13. Still, a large mismatch was observed between the strength of artistic production and the market on one side, and the fragility of Brazilian public institutions on the other. This imbalance threatens the art system as a whole.

Therefore, appropriate public policies are necessary to urgently encourage both public and private initiatives, as well as in partnership, aimed at strengthening, professionalization, internationalization and expansion not only for the market, but for other parts of the system: training, production, criticism, curating and research, institutions, and independent spaces.

With regards to the art market, specifically, besides reviewing the legal framework relating to the taxation and international circulation of works of art, whose discussion is already underway between industry and government agencies, other aspects are administrative and financial management, distinct strategic planning for both internal and external markets, construction, development and management of a solid customer base, correct management and formal relationships with employees, suppliers and artists, developing partnerships, development of communication and marketing tools, and efficient use of new technologies that all should be improved for growth of the sector in the medium and long term.

2014 51

AFTERWORD The 3rd edition of Latitude Sectorial Study is the consolidation of a shared effort between ABACT, Apex-Brasil, Latitude and the galleries to produce objective and reliable data on the sector in which they operate. In addition to guiding the activities of the Latitude Project and ABACT and assisting galleries in the management and development of their business, the Sectorial Study has become the most reliable source of data on the Brazilian market for contemporary art and an important tool for monitoring it.

Certainly, there are still gaps to be filled, but in this edition, we managed not only to update the data on the Brazilian market, but also, thanks to the contribution of ArtTactic, bring a relevant analysis of the international perception of our market and the performance of Brazilian artists in international auctions.

We hope, in future editions, to expand and enhance the information on the art market in Brazil and on its place in an international context, in order to continue contributing to its development over the medium and long term.

ABOUT THE AUTHORS Ana Letícia Fialho is a lawyer, cultural manager and art market researcher. She is Research Coordinator and Commercial Intelligence Consultant for Latitude – Platform for Brazilian Galleries Abroad, a partnership between the Brazilian Association of Contemporary Art (ABACT) and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil).

With over ten year of experience in the cultural sector and the art market, she has collaborated with institutions such as Cinema do Brasil, Fórum Permanente, Fundação Bienal do Mercosul, Ministério da Cultura, Museo Nacional Reina Sofia, among others. She holds a Law degree from Universidade Federal do Rio Grande do Sul, Brazil, 1997; a Masters degree in Gestion et Développement de Projets Culturels (Cultural Management and Project Development) from Université de Lyon II, France, 1999; and a PhD in Sciences de l’Art et du Langage (Sciences of Art and Language) from École des Hautes Etudes en Sciences Sociales (EHESS), France, 2001/2006.

She is also a guest professor in the specialization of Economia da Cultura (Economics of Culture) at Faculdade de Economia, Universidade Federal do Rio Grande do Sul and has recently joined the activities of Núcleo de Estudos de Arte e Poder no Brasil (Research group on Art and Power in Brazil), at Instituto de Estudos Brasileiros, Universidade de São Paulo (IEB/USP).

Anders Petterson is a leading authority on the art market, with particular focus on the modern and contemporary emerging art markets. He is the Founder and Managing Director of ArtTactic Ltd, a London-based art market research and advisory company set up in 2001. He previously worked at JP Morgan in the Investment Banking division, responsible for debt capital market and structured products for banks and corporates. He worked as an independent Research & Evaluation consultant for Arts & Business in London between 20022007, and has been involved in a number of large research and evaluation projects in the cultural sector. Anders Petterson is lecturing on the topic of ‘Art as an asset class’ for CASS Business School and Sotheby’s Institute in London. Anders Petterson is a Board Member of Professional Advisors to the International Art Market (PAIAM).

ArtTactic is a progressive art market analysis firm that offers dynamic and responsive research and commentary on the fast-paced and ever-changing art world. As new markets emerge and tastes shift, ArtTactic has the expertise and network to ensure your current and future art investments stay ahead of the curve and are supported by up to the minute information from all corners of the globe.

ArtTactic was founded in 2001 by Anders Petterson. ArtTactic has developed methodologies and analytical frameworks for the art market often used by economists and people in the financial markets. ArtTactic provides a new dimension to art market analysis by combining both qualitative and quantitative research tools with an in-depth knowledge of how the art market works.

LATITUDE SECTORIAL STUDY 3 rd EDITION | APRIL, 2014 HEAD RESEARCHER Dra. Ana Letícia Fialho EDITORIAL COORDINATOR Mônica Novaes Esmanhotto INFORMATION MANAGER Leonardo Assis STATISTICAL DATA ANALYSIS Maurício Tombini LATITUDE VISUAL IDENTITY Estúdio Campo GRAPHIC DESIGN Lucia de Menezes © 3RD EDITION Latitude – Platform For Brazilian Art Galleries Abroad © WORDING Ana Letícia Fialho © GRAPHS AND TABLES Latitude – Platform for Brazilian Art Galleries Abroad ACKNOWLEDGEMENTS Responding galleries, Alessandra d’Aloia, Frederico Miranda Silva, Daniel Rubim