Roman Kräussl and Ulf von Lilienfeld-Toal of the University's Luxembourg School of Finance will hold their joint inaugural lecture on the value of art, and finance research in real estate.

The True Value of Art (Prof. Roman Kräussl)

Since the turn of the millennium, investing in fine art has garnered increasing interest among alternative asset investors. Fuelled by a strong rise in global wealth and the search for yield in an environment of low interest rates and stock returns, the global art market has expanded exponentially in recent decades — auction sales have grown from $43 million in 1970 to $9.3 billion in 2015. The role of art in investments is still a hotly debated topic among practitioners and academics. However, the most recent research in the field of art-finance indicates that returns have been over-exaggerated. The general finding is that investors should buy paintings if they like looking at them, but not to make money. They can hope that their children will sell one or more of them later for a gain — but paintings are primarily aesthetic investments, not financial ones. Still, can we identify art investment strategies that are able to beat the market? Or is the art market a playing field only for insiders? And what is the future role of art investment funds?

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What finance research can do for society? Real estate and evidence-based policy advice (Prof. Ulf von Lilienfeld-Toal)

For a typical household, real estate is the single most important investment. Furthermore, policies fostering homeownership enjoy broad support across the political spectrum, offering a rare instance of policy agreement. Yet, little is known about the impact of homeownership on household behaviour. Are homeowners more careful regarding their personal finances and does homeownership serve as a commitment device to build up personal wealth? What are appropriate instruments to foster homeownership and to keep our cities affordable? We provide answers to these questions using a unique wave of social reforms in Sweden. The analysis heavily builds on the use of high quality data available in Sweden. Lessons for Luxembourg will be discussed. This research programme serves as an example of how finance research can help policymakers to improve the well-being of society. It highlights two major obstacles that hinder the advancement of knowledge in finance and which are solved in this research programme: access to data and useful variation in the data. Naturally, finance research in Luxembourg can also overcome these hindrances, thereby extending the frontier of knowledge and improving the decision-making by the government or private actors.

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Introduction by Prof. Stefan Braum, Dean of the Faculty of Law, Economics and Finance. The lecture will be followed by a reception.

Advance registration required by 13 June: lsf-events@uni.lu