Tag Archives: fund

Art Funds Feel A Revival As Global Economy Warms Up

More Fund Managers Eyeing Art Investments — But Will They Rely On The “Old Favorites” Or Buy Art From Emerging Art Powerhouses Like China?

 
Wang Jin, Knocking at the door, 1995 © Wang Jin

Wang Jin, Knocking at the door, 1995 © Wang Jin

The New York Times recently wrote on art funds becoming a popular option for investors looking to diversify their asset holdings as the global economic crisis eases and investors crave more diverse investment destinations. Art funds, which dipped in popularity as the crisis took hold, have actually increased in number over the years, with many focusing only on one type of art or period. As the author points out, individuals who had been burned by risky investments in the pre-recession years are again looking at art as a wise investment:

“The art market has taken in the corrections. People are confident at today’s price levels,” said Anders Petterson, founder of ArtTactic, a London-based art market research firm, in a comment posted on the company’s Web site. “We are reaching the bottom, assuming the stock market does not dip again.”

Reflecting the new hesitance to put money towards the great-risk-but-great-rewards-maybe investments of the world like real estate, art investment funds are now getting more creative. Some funds are going against the grain, putting money toward assets that are not expected to bring quick, huge returns yet are expected to appreciate over time and — perhaps most importantly — outpace inflation. Since massive global spending on stimulus packages and the like are expected to bring at least SOME measure of inflation into the picture, investors are looking at assets that will keep their money in check, and allow it to grow at a sustainable pace. Continue reading

China Merchants Bank Launches Innovative Chinese Contemporary “Art Banking” Fund

Bank Follows Lead of Art Investment Funds Like Castlestone Management, Helping Break Down Barriers of Investment In China’s Cultural Assets

Helping Chinese investors break in to the contemporary Chinese art market -- CMB's Art Banking Fund. Sculpture: Yue Minjun's "Contemporary Terracotta Warrior Series No. 6" (2005)

Helping Chinese investors break in to the contemporary Chinese art market -- CMB's Art Banking Fund. Sculpture: Yue Minjun's "Contemporary Terracotta Warrior Series No. 6" (2005)

China Merchants Bank (招商银行) has launched a new “Art Banking Fund,” an add-on feature for the bank’s private banking division focused on high-net-worth individuals who want to invest in long-term domestic assets as well as contemporary Chinese art. This innovative program is the latest in CMB’s string of unique initiatives for China’s growing investor base, and attempts to reach this traditionally skittish demographic by allowing them to get involved with assets that are both Chinese in origin and a good investment over the long term, destroying one of the barriers for these investors to “Buy [into] China.”

Programs like this, which allow Chinese investors the ability to invest in a basket of hard assets rather than simply putting their money into stocks or other securities, should be quite successful in the mainland, where most investors feel that a diversified portfolio — more weighted towards hard assets like gold, jewelry, or real estate — is crucial. After all, Chinese investors are still a new demographic, despite their country’s age, as investment of this kind took a roughly 60-year break. Now, however, we can see that Chinese banks and investment firms are developing interesting investment strategies and products meant to offer “investment with Chinese characteristics.”

Continue reading

Art Is Good As Gold In Inflation Era — Bloomberg

Fund Managers Moving Towards Art As Investment Diversifier, Will These Managers Balance Their Art Portfolio Investments With A Global Mix?

Castlestone is investing in western artists like De Kooning. By focusing only on western art, is the fund going to miss out on higher returns later?

Castlestone is investing in western artists like De Kooning. By focusing only on western art, is the fund going to miss out on higher returns later?

We have written before on Castlestone Management, a $660 million investment fund that focuses on works of art, which the fund feels is a better investment over the long term than traditional hedges like gold or other hard assets. Today, Bloomberg has an excellent profile of the fund, noting that it is designed to benefit from one of art’s great features — a resistance to the great asset de-valuer: inflation. Castlestone, and art investment funds like it are , Farah Nayeri writes, “designed as an anti-inflation shelter at a time when recession-busting stimulus packages are flooding the global economy with cash.” So with the number of these funds increasing, as investors look for inflation-defying destinations for their money, will they get with the program and look for a more global mix, made up of Chinese, Indian, and other emerging artists? Or will they stick to their Picassos and Warhols?

It looks like Castlestone may be up for anything as time goes on, but at the moment they seem to be a bit top-heavy with artists who are late in their career. However, with this sort of fund growing and becoming more popular with inflation-weary investors who aren’t up for the rollercoaster ride of investing in gold, stocks, or jewels, an art fund might be just the thing.

Continue reading

Chinese Art — The Scarcity And Valuation Connection

Parallel Between China’s Art Market And The Broader Economy

Zhang Dali, Forbidden City: 1998. MOMA Collection.

Zhang Dali, Forbidden City: 1998. MOMA Collection.

The New York Times published an interesting story yesterday about the connection between buyer trends and scarcity in recent art auctions. Technically, scarcity has always played a part in buyers’ habits, obviously, as dead artists usually sell for more than those with a pulse. But the reporter remarked that scarcity is being pushed along quite rapidly in some markets, more than in others. At a recent sale of antiquities, the popularity of Chinese works reflects the rising belief among many collectors that — from Shang Dynasty pottery to important historical contemporary artists from 1989-1999 — the Chinese market exhibits all of the hallmarks of a solid global art market: Scarcity (driven by increased domestic buying and slower output by living artists), outpacing inflation, and quality (established by more high profile acqusitions). So as the market for antiquities continues to roll along, the increased attention to contemporary pieces should ultimately benefit the whole Chinese art market.

Continue reading