Phillip Hoffman has been plumping his art fund with Reuters lately:
“I don’t collect art myself,” he said. “I am not passionate about art. I just regard it as a business. … My view is that being passionate about art hinders the decision about when to buy and when to sell.” For example, he said his group bought a painting by British artist Frank Auerbach. The asking price was $1.7 million.
“We negotiated the asking price down to $1.1 million and we then sold it 15 months later for $2.6 million. We just took a dispassionate view and said this artist is rare, important and on the up and that’s why we made a lot of money on it.” […] On average, the annualized return of everything the group has sold has paid out a 30 percent internal rate of return per annum, said Hoffman. In the last few years it has sold about $35 million of art for which it had paid $25 million. […] Fine Art Fund Group’s Hoffman said he recommends his clients, who need to put up a minimum investment of $100,000, put around 5 percent of their wealth into the group’s funds.
