From the reading it seems that Art Investment Funds are definitely a risky way to invest. The funds have rarely been successful with the exception of the British Rail Pension Fund created in the 1970's 1970’s which really was not even as successful as it appeared. While in theory investing in art may seem like a sure way to make money, the uncertain and volatile nature of art value has shown it to be much less straightforward. The continued interest in this type of investment is curious given its history of failure.
I find the idea of Art Investment Funds disturbing in its lack of regard for art's art’s intrinsic value. Even more than anything we have seen thus far, the Art Investment Fund is concerned with nothing more than art's art’s monetary value. The comparison between real estate and art investment was also concerning. How can we guarantee that a bubble is not being created that will eventually pop? I also noticed that some of the funds allow their members to display the art from the funds in their homes. This seems like another significant risk, what if a piece is not cared for properly or accidentally destroyed? What if a member has a piece of art and the fund fails, does the member get to keep the art? What if they refuse to return it in order to regain at least some of what they invested? While I'm I’m certain that the works are insured and the members have signed contracts that stipulate how everything will function, it still seems like there is a high potential for problems.
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A work by an established non-living artist:
Diego Rivera's "Mujer Bañandose" Rivera’s “Mujer Bañandose” which recently sold for $116,500 at Sotheby's Sotheby’s but I think has the potential for a higher value in the future.
A work by an emerging artist:
Adam Pendleton's "System Pendleton’s “System of Display, E (ETERNAL/Against/Jean-Luc Godard, Le Grand Escroc, episode from Les Plus Belles Escroqueries du Monde, 1964)" ” which was displayed at Art Basel 42 in the Art Statements section.