Emirates NBD, the Middle Eastern banking giant, is to offer art advice to high net worth clients of its private bank, through a partnership with the Fine Art Fund Group in London.

The Fine Art Fund Group, an international investment partnership offering opportunities to invest in fine art, already has long-standing partnerships with Spain’s Banco Santander, Greece’s EFG Eurobank and Italy's Banca della Svizzera Italiana.

According to an agreement signed by both entities, experts from FAFG will work closely with Emirates NBD Private Banking to provide advisory services to the bank's high net worth clients who wish to invest in art as an asset class. Clients will also gain access to art events regionally and globally.

The bank views its decision to launch art advisory services as “timely” based on the latest results from the Royal Institution of Chartered Surveyors Art and Antiques Survey, which states that in the last quarter of 2010, prices of art objects in the £50,000 (around $80,000) price bracket rose rather sharply 20 per cent on the previous quarter. The figure (the highest since the second quarter of 2008) highlights the number of wealthy buyers investing in art and antiques as a tangible asset, rather than other forms of investment, says the report.

“Art as a tangible asset continues to attract international investor attention in the post-recession world and the market for art has remained strong in 2010," said Gary Dugan, acting general manager and chief investment officer of private banking, Emirates NBD.

While the UAE might not be the first place to come to mind as a premier hub for the fine art market, the arrival of a Middle Eastern branch of the Louvre, set to open in 2012 in Abu Dhabi, may be an indicator of growing cultural interest and investor appetite in the region.

"Middle East investors are also expressing greater interest in art, and recent estimates show that last year, approximately 25 per cent by value of the 100,000 plus works of art sold went to buyers from Russia, Asia and the Middle East," said Dugan.

The firm values the international art market to be worth more than $3 trillion and to have an annual turnover of $50 billion. One of the largest art vendors in the world, Christie’s International, yesterday announced worldwide sales for 2010 of £3.3 billion (around $5 billion) up 53 per cent on last year’s figure of £2.1 billion.

"In addition to the opportunity for portfolio diversification, art has traditionally yielded high returns and shown a low correlation to other asset classes, thus proving to be a remarkable store of value,” said Philip Hoffman, CEO of The Fine Art Fund Group.

Aside from its obvious attractions as a prestigious, tangible asset, the surge in interest in art is said to be due partly to its social potential - that it is a way of encouraging bonding between banks and clients.

Nevertheless, both members of the partnership were keen to point out that the strategy would treat art as a money-making business with Dugan saying in a statement that “this is a financial opportunity… not interior decorating”, and Hoffman saying “we’re looking at it as a long-term storer of value, an inflation hedge,” according to ArabianBusiness.

And while the advisory service may be a structure that allows the super-rich to broaden their tastes and appetites, it is also a way for both bank and client to reduce risk in a market that is as much about knowledge as it is about taste.

“We bring our expertise, and they put up the capital,” said Hoffman. “Clients from the Middle East are saying, ‘we want to put money in art – we’re happy to spend $10,000 without expertise but not $10 million,'” said the report.

The Fine Art Fund Group team consists of 35 art and financial professionals with representatives in London, New York, Miami, Lugano, Athens and Dubai.