The resurrected Portfolio.com has a nice story about a Kansas-based art fund created by Sandy Kemper. Appealing to accredited investors (that means folks with liquid assets above $1m), the fund has done well over the last two years as the rest of the art market has taken it in the teeth:
Currently valued at $17 million, it holds pieces such as a massive, vibrantly painted aluminum structure by Frank Stella, The Mat Maker, and serene pastel drawing, Four Cakes, by Wayne Thiebaud. The approximately 125 investing entities, typically couples, don’t have to rely on brochures to view the fund’s more than 130-work collection—the pieces are stored in their homes on a rotating basis, another part of the fund’s diversification strategy.
Fund founder and executive chairman Sandy Kemper attributes the fund’s performance to its emphasis on bringing efficiencies to an inefficient market. The fund uses experts to shy away from price-inflating fads and puts connections to work to buy roughly a third of its pieces from private collectors, avoiding fees from galleries or auction houses. It focuses on pieces priced in the middle third of the fine art market, which Kemper believes is the most liquid and historically best performing.
Inflation worries have attracted the latest influx of members, said Kemper. “People are beginning to worry about the declining of the dollar,” says Kemper. “Art also runs very well against inflation.”
Now is a particularly good time to buy because many private collectors want to sell, Kemper said.
The fund, expected to close to new members by the end of the year, buys works typically ranging from $50,000 to $500,000. In a given year, the fund may part with none to as much as 10 percent of the collection, depending on offers and opportunities.
The Collectors Fund
Base: The majority of the 260 or so members are in Kansas City, though pockets of members have formed in New York, Los Angeles, Dallas, St. Louis, and other cities.
Founders: Executive Chairman Sandy Kemper; his wife, Christine; and COO Will Conner.
Details: The Collectors Fund, the management company, oversees the first fund/collection, American Masters Collection I, which will last a total of 10 years and includes about 130 works. The management company runs off an annual fee of 2 percent of capital invested and handles all acquisitions, transfers, and installations of art, care of the art, insurance, and other logistics.
Members: All are accredited investors who put in a minimum of $120,000. The fund is expected to close to new members by the end of the year, with 300 to 400 members and $20 million to $30 million invested.
Art for Investment’s Sake (Portfolio.com)