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Art Investment Fund

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Zhentong Chen

on 28 May 2014

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Transcript of Art Investment Fund

One way to manage your wealth -
art investment fund

Art investment
In the western countries, art investment has become the
third largest field
of investment, just less than equity and real estate.

What is art investment fund?(definition)
Art investment funds are investment funds dedicated to investing in artworks.

The art fund team and Fee Structure
The Art Team
-qualified art dealers
-specialists in different kinds of art.

Management Team
-Global Marketing & Investor Relations
-Art Investment
-Art Advisory
-Marketing & Business Development 

Fee Structure of art fund
-1.5%-5% of net asset value managed and
20% of profits

Investment Type

High return

In the last 50 years, the average annual return rate of artworks is 10%
The average annual growth rate of S&P500 index is 10.4%

From 2000-2011, annual rate of return in Chinese art market was 22.0%。
The annual rate of return of the real estate in mainland was 18.59% in the last 10 years.

Low or negative correlations of art to other asset

Because of low or negative correlations of art to other asset, art investment can lower the risk of your portfolio.

Tax Benefit
In many countries, the appreciation of artworks does not need to pay related tax.

In some countries, in order to protect art, the money used to buy artworks can reduce the taxable income.

Aesthetic appreciation
Advantages of art investment

Methods of Art Investment
Purchase dircectly

Art Investment Fund

Art Option

Art securitization

Art Bank

Bank Financial Products

Art Investment
Art Investment Fund
Proposals to create art investment vehicles

In the 1990s, Citibank, SBC, JP Morgan and Deutsche Bank established art investment departments for their VIPs

In 2012, 44 art investment funds are issued in the world, 21 in China

Principal amount is expected more than 10 billion in art investment fund in next 10 years.

1904, Paris, La peau de l‘ours

1974,the British Rail Pension Fund (the “BRPF”)

Economies of scale

Unlike purchasing artworks directly, art investment funds have economies of scale, which reduces average transaction costs.


Individual investors can only buy small number of artworks.
Investment funds can hold different kinds of art works.


Art investment fund managers can select qualified investments and continuously monitor portfolios with their art knowledge and investment knowledge.

Art Investment Funds vs. Purchase directly
Passive investment

The fund diversifies its assets into different kinds of artworks.
A example--AGF

Active investment
Art hedge Investment

-purchase the valuable art works,
-hedge the investment risk with option

A example--art trading fund
-buys artworks and the put option of large companies in art market, like Sotheby and Christie's

Performance of Art investment Fund
Average annualized return of 17 Chinese art investment funds launched in 2012

10% ~ 20%
Average annualized return of foreign art investment funds
Full transcript