Art Funds in India Review

Art is the ancient asset class of India and rich people used to invest in Indian art since centuries. But well, Art funds is the entirely new concept in India.

What are the Art Funds and how they generate returns?

Well, Art funds are exactly same like the traditional mutual funds. But the only difference is that, here the underlying asset is Art rather than stocks, bonds and gold.

The art fund collects money from Investors and the fund manager of the art fund is expert in the valuations and analyzing the art. And they invest your money to buy art at very low price on behalf of you. The Art funds build and maintain an art portfolio for you and keep that portfolio for 5 years and later on sell that portfolio for huge capital gains and distributes this profit among the investors.

The funds sell units like any other mutual funds and can be bought with transactions which are the same as the transactions for stocks and shares. On buying, the units get listed as part of your portfolio and on selling them your account is debited of these units. However, some of these funds have a lock-in period during which you cannot trade the units. The net asset values (NAVs) of these funds can be monitored on any NSE terminal in India.

Advantages of the Art Funds

The main trouble in investing art is – lack of proper valuation methods of this asset class. For someone, one art may be worth of Rs.5 lakhs while for the other it may be just worth of Rs.10,000. And that’s why it requires a high level of expertise to choose an art to invest in.

Art funds have their own experts who are expert in buying valuable art at lower price.

Which are the Art Funds in India?

Following institutes of India have launched their own art funds.

01) Copal Art

02) Edelweiss Securities

03) Crayon Capital

04) Osian’s Connoisseurs Art

The above are the most successful art funds of India.

Most of these funds have attracted investments in the range of 2.5 billion USD. Examples of successful art funds in US which invested in Indian Art are the ones launched by Arts India, which have attracted investments ranging from USD 9.5 Million to USD 15 million, respectively.

What is the Unit price for Art Funds?

Consider the example of the “contemporary scheme 1” of the art fund launched by Osian’s Connoisseurs of Art in June, 2006. One unit of the fund was priced at USD 2.5 and the minimum investment limit was pegged at USD 24,400. The funds attracted investment worth USD 3 billion, which was utilized to buy art created by 112 artists. The list included names, such as Akbar Padamsee, V.S. Gaitonde, F.N. Souza, M.F. Hussain, Bikash Bhattacharjee, Tyeb Mehta, and Ramkumar amongst others.

What is the Minimum amount of Investment in Art?

It’s roughly between Rs.10-15 lakhs which is really attractive entry price to invest in Art funds.