Art as an asset class

Art as an asset class

[http://moneyscience.org/tiki/tiki-view_blog_post.php?blogId=4&postId=200|Last week at Hedge Fund Focus], I was inspired to aggregate some material on art and fund managers by a BBC Radio program called ''Alvin Hall's Art World'' which was focusing on [http://sendercollection.com|the collection of Adam Sender], the founder of New York's Exis Capital Management. Unfortunately that broadcast is no longer available but this week was pretty interesting too and featured Jeremy Eckstein,a financial consultant and statistician who lectures at [http://www.iesa.edu/uk/articlePG.php3?id_article=13|The Institut d?Etudes Supérieures des Arts], and Christina Delgado, an Art Advisor from Brooklyn, US. If you have RealPlayer installed, you can listen to this week's program [http://www.bbc.co.uk/radio/aod/radio4_aod.shtml?radio4/alvinhallsartworld|here]. Here are a few more articles: [http://www.safehaven.com/article-2310.htm|ART: The New Asset Class?] ''safehaven.com'' Just when you thought that no pair could be more mismatched than the Virgin Mary and a grilled cheese sandwich, the cultural world brings us the marriage of finance and... fine art. Try and picture it: Wall Street and wall... paintings? Business statistics and... brush strokes? Stock portfolios and... palettes? Economic earnings and... easels? [http://w4.stern.nyu.edu/news/news.cfm?doc_id=4380|Aesthetic Assets: Investment funds offer a new twist on art appreciation] ''By Suzanne McGee, Barron's'' Art can be a terrific investment -- just ask anyone who has made a bundle after buying a lithograph by, say Austrian artist Martin Kippenberger, whose works have soared in value to 0,000 or so from a mere ,000 a year ago. Art can even be an asset -- holding its value over long periods and appreciating steadily. But is it an asset class? Or, to be more precise, an investable asset class? [http://www.artnet.com/magazineus/features/laplaca/laplaca10-14-05.asp|Inside the London Art Market] ''Joe La Place at Artnet'' London has become the most dynamic city in today?s art market. Although New York has dominated overall turnover since WWII, when it comes to market performance, London is putting the Big Apple to shame. [http://www.panachemag.com/1_06/TheGoodLife/Wealth_Managamanet/Wealth_Management.asp|Art for the Venture?s Sake] ''Panache Magazine Online'' Until very recently, a major impediment to investing in art has been the lack of a reliable benchmark to gauge market performance. Although art indices have been around for years, their performance has been crudely calculated. The return was arrived at by simply tallying up yearly sales, and then dividing the sum by the total number of sales. The major drawback is that this method fails to take into account an artwork?s repeated sales ? hence revaluation ? over time. [http://www.blonnet.com/life/2003/11/03/stories/2003110300060100.htm|Investing in art] ''The Hindu Times'' Twentieth-century Indian art has witnessed steadily rising prices over the last 50 years; this price trend, combined with some structural shifts, has prompted a closer look at the industry, and its investment potential as an asset class. [http://s107117993.onlinehome.us/login.cgi|The Mei Moses Art Indices] ''Jianping Mei and Michael Moses'' Art as an investment is analyzed by the introduction of a family of fine art indexes that have been created from a proprietary database of prices for art objects that have sold at auction more than once. These indices are compared to the S&P500 to measure relative performance. This information is also used to provide a portfolio of services for individuals and institutions that are interested in participating in the art market. Register to learn more about this research. [http://www.cox.smu.edu/article/research/research.do/57|The Collateral Value of Fine Art] By Rex Thompson and Clare Andrew, forthcoming in Journal of Banking and Finance. The names Renoir, Manet, Monet, and Degas conjure up images of some of the world?s favorite and most widely recognized works of French Impressionist art. But as an investment, the market for these works is often viewed as intractable and risky. Is it possible to use the tools of finance to understand the investment quality of fine art? Professor Rex Thompson of SMU Cox and Clare McAndrew of Trinity College, Dublin, attempt to quantify the investment risk of fine art and determine its collateral value in a forthcoming Journal of Banking and Finance paper. [http://www.fdewb.unimaas.nl/finance/faculty/Campbell/images/Art%20Investment.pdf#search=%22art%20market%20finance%20paper%22|The Art of Portfolio Diversification] (PDF) ''Rachel Campbell, Maastricht University'' Diversification benefits have decreased over recent years and there is a fight to find alternative investment vehicles to boost returns whilst minimising risk. Recently available data has enabled the construction of an annual art index dating back to 18752 and the potential for investors to invest in Art as an additional asset class. Art indices tend to have high volatility whilst not gaining significantly greater gains than the stock market. At first glance it would appear that Art is a highly risky investment strategy. In this paper we take a closer look at the benefits from investing in Art. The extremely low (and even negative) correlation with other asset classes results in a highly beneficial investment vehicle for an investors? portfolio. {content id=220}{content id=35}

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