Art Market Blog – How Artists Can Invest in Themselves
One of the biggest problems that artists face is not having the security of a regular wage and the benefits that go along with regular employment such as a pension. A group of investors and art collectors have taken a major step towards greater financial security for artists by starting the Artist Pension Trust (http://www.aptglobal.org). What the Artist Pension Trust allows the participating artists to do is basically invest in their own future and the future of other artists. Each artist deposits a number of artworks into the trust along with 249 other artists in return for a percentage of the collective profits of all the artists in the trust. The trust works on the assumption that if you purchase artworks from a certain number of artists, chances are that at least one of those artists will find fame and the value of their work will increase enough to compensate for the artists that didn’t find fame, with money left over.
To give a clearer idea of how the trust works I have broken up the process into seven steps:
1. Participating artists are chosen by a curatorial committee
2. Each year for five years 50 artists will be chosen to take part
3. The chosen artists are then invited to deposit their own works of art into the fund
4. Over a period of 20 years each artist deposits a total of 20 works of art along with another 249 artists. Each artist deposits two works each year for the first five years, one for the following five years and one every two years for the remaining ten years.
5. During the period that the works are in the trust they are made available for loan to museums and galleries as well as for exhibitions organised by the trust which helps increase the value of the works in the trust.
6. After the five years when all 250 artists have been chosen the sale of the works in the fund will begin. A team of analysts and consultants decides when each artwork is sold in order to maximise profitability with the aim of selling as many works as possible within a 20 year period.
7. Each artist whose work is sold receives 40% of the net proceeds derived from the sale. Thirty-two percent (32%) of that sale goes to the pool to be distributed to the other artists in the fund with the remaining 28% being used to cover costs and provide a return to the funds financial backers. Each of the other 249 artists will benefit from the 32% contribution based pro rata on the number of artworks they have deposited with APT.
The Artist Pension Trust currently has eight funds each of which will include the work of 250 artists eventually resulting in a total of 40,000 artworks by 2000 artists. Each of these artists will benefit financially from the distributed funds as well as from the active promotion of each artist’s work by the trust. With such a large pool of artists chances are that the financiers of the trust, who receive a small portion of the funds, will profit from the venture even though their motives for investing in such a venture are unlikely to be purely financial. Seems like a win-win situation to me.
The Artist Pension Trust currently has trusts set up in New York, Los Angeles, London, Berlin, Mexico, Beijing, Mumbai and Dubai. If you are an artist and are interested in being part of the Artist Pension Trust (which you definitely should be) you can apply here
**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.