The Renewed Interest in Art Investment Funds
Art investment funds have been around for quite a while now with the most notable example being the British Rail fund. Because of the boom in the art market recently there has been renewed interest in the idea of art investment funds.
Many previous attempts to get these funds off the ground have not been successful due to a lack of investor confidence and knowledge of the art market. There was also some justified concern in the lack of art market knowledge that the people setting up these funds had, which also contributed too many failures. There is already a lack of confidence in the art market as it is so by not arming themselves with people who had this knowledge was a poor decision. It should not be a financial institution that starts an art fund but an arts institution which is where these companies went wrong.
With countries such as China and India experiencing an economic boom there has been a large increase in the number of affluent individuals looking for something to invest their money in. Although it may not have seemed plausible a few years ago, China and India are proving to be major players in the world art market especially in the area of art investment funds. The Indian company Osian recently started an art investment fund for Indian investors which is one of two art investment funds to be started in India. The chairman of Osian, Neville Tuli explained how the art fund would work in an exclusive interview conducted by CNBC-TV18, an expert of which is included below:
“Basically it is an art fund. We have an intention that over the next 3-4 years, we will be able to create a mutual fund industry, bring in the middle classes, 300 – 400 million Indians to take a stake in the cultural heritage of our country. Given the legal framework today, the fund under the Indian Trust Act is the most efficient institutional platform we can create. It is a private placed fund and we reach out to around 1500 of the top buyers around the world.
This fund is specifically for Indian residents. Hopefully it will show the country that art is not just an aesthetic and historical object, but it also has a financial and developmental role. It is one of the greatest sustainable, credible assets of every country across time and now this institutionalisation process has taken it a step forward.”
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.