News-Antique.com - Oct 07,2010 - Art Market Hedge Trends – artmarketblog.com
Although investing in fine art is considered to be a hedge more mainstream investment markets, a new trend has emerged that has seen numerous attempts to launch projects that aim to introduce alternative methods of investing in art as a hedge against the traditional method of investing in art – purchasing a work of art and taking physical ownership. One such project is the collaboration between artist Tom Saunders and art collective Idefix Bloc which with an exhibition of Saunders’ work titled SHOP + OFFICE held at murmurART gallery East London. What makes the SHOP + OFFICE exhibition so unique is that Saunders was not offering his work for sale in the traditional sense. Instead of collectors and investors purchasing physical ownership of an art object that Saunders had produced, as would normally be the case, Saunders offered potential clients the opportunity to purchase the right to buy his art in 10 years’ time for £1 for an immediately payable fee of £2000 pounds, the price that Ferguson Solicitors, the UK law firm, believes is the correct price for an “option” contract, which is essentially what Saunders is offering. Basically, you can pay £2000 now for the right to purchase any piece of the artist’s work in 10 years time for only £1. The lure for investors is the potential to earn huge profits if Saunders becomes a highly successful artist whose work sells for large sums of money, or at least significantly more than the £2000 investment. Saunders’ work could, of course, turn out to be worth less than the £2000, but that is the risk investors take. There are, however, contract provisions that cover premature death or non-production.
Over in India, another innovative art investment project has been started by an Indian entrepreneur. Indian investor Arun Rangachari, chairman of venture capital firm DAR Capital, has purchased the rights to the entire life’s work of a reclusive Italian artist by the name of Montanari, who has lived in seclusion for the past 18 years. Rangachari is building up an art collection, of which the work of Montanari will play a significant part, with the intention of setting up an art fund in the future. Before selling any of the paintings, Rangachari plans to increase the value of Montanari’s work by holding exhibitions and building a foundation dedicated to the artist’s work. According to artnewspaper.com ‘His (Rangachari’s) first art investment consists of 40 paintings by the Italian artist Americo Montanari, with the option to buy many more……..When asked why his art fund would succeed when other ventures, including Indian-based funds, had recently failed he said: “Our entry level will be affordable, we’ll be focusing on artists who have not yet built a reputation and we will have no hidden costs, everything will be up front, so we’ll be quite different from everyone else.”’
The Chinese are also getting in on the act with Chinese financial corporation Shenzhen Artvip Cultural Corporation recently going public with
