The Art Collection Fund seduces new investors with promise of 12% return from $80,000,000 investment in art
Investors are to be invited to invest in a European investment group with plans to purchase $80 million worth of modern and contemporary art for a predicted annual return of 12 % over four years. ‘The [Art Collection] Fund is aimed at people who want to invest in art and who haven’t time to be collectors’, explained the fund’s founder and chief executive, Stanislas Gokelaere, and this initiative comes at the opportune moment when art looks to be a better investment than stocks. With declining returns from financial markets and real estate, investors are looking to diversify, and the relative buoyancy of the art market potentially makes it an ideal choice. However, ‘the opaque and unregulated nature of the art market discourages many investors’, while ‘buying art for investment purposes requires different skills and knowledge than traditional stocks’: this is where the Art Collection Fund comes in.
‘We’ll be buying blue-chip works priced between 100,000 euros ($130,400) and 3.5 million euros,’ explained Gokelaere: ‘We won’t acquire cutting-edge pieces and we’ll be concentrating on slightly lesser-known names that appreciate in a slower, stronger way. We want to avoid bubbles.’
About 65 % of the collection will be devoted to modern and contemporary art, with investors being given the privilege of being able to borrow the purchased works in line with the value of their commitments. Investment in the fund will start at 500,000 euros, with the group levying 2 % per annum management fees and 20 % of the net proceeds. At this moment, the fund has raised half the investment targeted for the first round, attracting initial commitments of about 10,000,000 euros from investors in Belgium, Switzerland, Luxembourg, Italy and the U.K
According to the founder of ArtTactic – an art investment research group – ‘The sense that art is an asset class is gaining momentum. The funds are now being tuned to be part of the ecosystem rather than a parasite. They give wealthy people the opportunity to be part of the lifestyle.’
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