Investing art is a practice that is poorly understood largely due to its controversial nature3. Art investment is looked upon as a mechanism that strips art of its cultural and creative meaning and transforms art into a purely money making strategy. It was interesting to learn about the development and occurrence of different art investment funds and strategies and see the different factors that were considered during the development of certain investment plans. During certain time periods, there were unique threats to the success of some art investment funds and it was very interesting to see how certain investment managers and investment strategies were created to counteract possible failure of their investment portfolio.
If I were to create my own investment fund, I would employ a variety of strategies and utilize multiple investment vehicles2. I would use a “showcasing” strategy, which would seek to increase the funds in my art investment portfolio by placing my works in important museum shows2. The exposure of the art can help to attract more money to my fund. In addition to that method I would use a “distressed art” strategy in which I would acquire art at significant discounts from collectors who are selling due to the likelihood of bankruptcy or insolvency2. I would also try to make sure that within my collection of fine older art, I would include new artists as well. In doing so I would adopt the “emerging artists” strategy and center my investments on new artists in the art world who are not yet established and therefore have the potential for rapid price appreciation. Because art investments are typically long term, I would possibly try the “buy and hold” strategy and hold on to artworks hoping that with time and a consistently good market, I can earn some return. If this strategy becomes unsuccessful within a few years, I may forgo it and adopt another one. The same goes for if any of the other strategies mentioned fails quickly. Using these four strategies would hopefully garner some success and money within my investment portfolio. Also, I would have a US based investment vehicle and one located abroad (likely in the British Virgin Islands because it’s a common offshore fund region and investor-friendly region2, 3). This would allow me to take in monies from both domestic and foreign sources. My art investment fund, like most others today, would likely resemble a private equity fund or hedge fund in terms of its structure and operation.
If feasible, the artwork collection in my investment portfolio would consist works from classic artists like Pablo Picasso, Henri Matisse, Salvador Dalí, and Rafael. In terms of contemporary art, I would look to include artworks from Damien Hirst, Jeff Koons, Horace Pippin, and Henry Ossawa Tanner, for their thought provoking pieces. Emerging artists like William Wray and Caroline Marine, would inspire how I approach and include emerging artists in my pieces. My collection would consist of paintings mostly, but there would be sculptures, photography, and other forms of art from these artists and those similar to them. I would definitely want attention to my pieces, to garner more funds on investments.
Sample Painting by Caroline Marine:
Sample Painting by William Wray:
References:
2http://www.artfundassociation.com/_what_are_art_funds/basic_af.html
http://www.artfundassociation.com/_what_are_art_funds/basic_af.html3Horowitz, Noah. Art of the Deal: Contemporary Art in a Global Financial Market. Princeton, NJ: Princeton UP, 2011. Print.