The art market: Tough times for art funds

Art funds were among the biggest victims of the art market downturn. According to Randall Willette of Fine Art Wealth Management, most have put their plans on hold for now. Among the casualties was the Art Trading Fund, the world’s first, and so far last, art hedge fund, which went into liquidation at the end of last year.

Willette, in the March edition of his Art Fund Tracker, says: “The woes of the art fund industry are not over as the search for fresh capital continues in the fallout from the financial crisis.” He does talk, though, of a “glimmer of hope ... as investor interest begins to revive and a number of new art and collectable funds emerge”.

Among these hopefuls is the Zurich-based Anthea Fund, run by former structured finance specialist Massimiliano Subba in association with the Swiss contemporary art adviser Nicolai Frahm. It is looking to raise €80m to buy contemporary art for an eight-year, closed-end fund, due to launch in May. “We are not targeting art collectors, but rather people who see art as a good investment but want someone else to do the job for them,” says Subba. Asked why the fund is focused on contemporary art, the most fickle part of the market, he says: “There are virtually no provenance issues with today’s art. It appeals to younger, more unconventional investors, and it is more cost-effective to concentrate on just one field.”

Also entering the market is the Cayman Islands-based Artemundi Global Fund, the brainchild of Spanish collector Javier Lumbreras. This is a five-year, closed-end fund that hopes to raise up to $225m to buy 150-200 works of art across the board, from Old Masters to contemporary art. Investors will get to take the works of art home with them, unlike in other funds. But these funds, like the existing Fine Art Fund, all seem to be targeting the same works of art: “Iconic pieces by established masters” (Anthea); “universally recognised artists” (Artemundi). In a market where supply, not demand, is the eternal problem, the danger is that all the funds will chase the same works of art, along with dealers and collectors, so forcing prices beyond the point where they can turn a profit on them.

Sara Rahbar’s ‘Flag #38’ (2009), at Art Dubai

When Art Dubai was launched in 2007, the world was a very different place. Dubai was the poster boy of the Gulf boom and, reasoned art dealers, the ideal location for selling international brand name art to wealthy Middle Eastern buyers.

But it soon became clear that Indian and Middle Eastern art was the most successful commercially in the region. And over the following years the international profile of artists from the region has been greatly boosted through a host of exhibitions, biennials and conferences.

Art Dubai unveils its fourth edition on March 18, with a roster of 70 exhibitors. While some hail from Europe and a few from America and Australia, the line-up is strongly representative of the Menasa region (Middle East, north Africa, south Asia) and the fair should be a good place to discover new talents or see existing ones, such as the Iranian Sara Rahbar, being shown by the Dubai-based Carbon 12 gallery.

Martin Kippenberger’s ‘Dinosaurierei’ (1996), from the Stuyvesant collection

The auction of art from the Peter Stuyvesant collection in Amsterdam this week was a rip-roaring success, raising €13.6m – double pre-sale expectations – with all but four of the 161 works on offer finding buyers. Frantic bidding pushed prices well above targets: for example, François Morellet’s minimalist “2 Trames de Tirets 0°-90°” (1972) shattered its €20,000-€30,000 estimate to make €432,750 while the top lot, Martin Kippenberger’s “Dinosaurierei” (1996), from his Egg series and painted a year before the artist’s death, made almost €1.1m, well above its €200,000-€300,000 estimate.

The collection, started more than 50 years ago, was initially bought to brighten the environment of a Dutch cigarette factory and grew to more than 1,000 works. The current owner, British American Tobacco (BAT), had sent a small selection for sale at Sotheby’s to test the waters. Now, according to BAT spokesman Cees Foet, the remaining 840 works will be sold. “We are still discussing how to do this – perhaps we will make another big sale next year,” he said, adding: “I did suspect this sale would do well, but it’s great that it was so spectacular.”

Sex sells. This not very original thought is driving Phillips de Pury’s latest sale, being held on March 19 in London. The catalogue, wrapped in blood red and sealed with a “sexually explicit” sticker, features a potpourri of art, from homoerotic drawings by Tom of Finland (from £6,000) to a much tamer Matisse lithograph of a sleeping nude (£7,000-£9,000). Carla Bruni, France’s première dame, figures partly unclothed in a 1992 Helmut Newton photograph (£3,000-£5,000). There are some bizarre inclusions, notably a 1970 bed by Luciano Bertoncini (£5,000-£7,000), while a Willy Camden photo spells out “Sex” on three curvaceous buttocks (£1,000-£1,500). You have to be aged over 18 to attend the sale.

The battle of the June fairs in London is hotting up. Brian and Anna Haughton, whose Art Antiques London will be held from June 9-16 in a tent in Kensington Gardens, recently held a reception at the upscale Dorchester Hotel to announce a tie-in with Waddesdon Manor during the fair. Not to be outdone, the organisers of Masterpiece, being held in a tent in Chelsea Barracks from June 24-29, have signed a joint venture with the Caprice group, which includes hot-ticket restaurants the Ivy, Le Caprice, Scott’s and Harry’s Bar. Masterpiece will feature scaled-down implants of these restaurants dotted around the fair.

“The idea,” says Thomas Woodham-Smith of Mallett, one of the founders of the venture, “is to keep people at the fair. They come, have a good lunch, then hopefully will be in a good mood to buy.”

Georgina Adam is editor-at-large of The Art Newspaper