Forbes India is looking at places where India’s new class of millionaires and billionaires can put their money. Even though India has one of the least developed infrastructures for a serious, long-lasting and high value art market, it has the most developed art-as-an-alternative asset industries. The bulk of art funds in the world are in India:
For those who like to take risk on liquidity and are fully invested, there is another avenue for investment in the alternative asset class–art. (Though the best wealth managers dissuade their clients from getting into this asset class due to the lack of transparency or liquidity.)
Art is certainly not a retirement plan, unless, of course, the purpose is to gaze at a Hussain or Raza with a sundowner in hand in the twilight years. In that sense, it certainly would be an asset. Incidentally, good art also gains in value as the years advance. Old money has been buying art for decades, quietly, as is its wont. But as individual wealth spreads, it becomes almost de rigueur. The fast-growing economy spawns hundreds of millionaires and a relatively smaller number of billionaires every year. The numbers are not important. It is that heap of money that is.
“The whole concept of patronage is just beginning to take root in India,” says Deepak Shahdadpuri, founder and managing director of BCP Advisors Private Ltd., a Mumbai-based alternative-asset advisory firm. Although Shahdadpuri agrees that art can generate positive returns, this is usually over very long holding periods, often decades. He does not consider art as an alternative asset class that can be packaged and sold per se and argues it is something for people who have a genuine interest and understanding of art and art history. Otherwise, they may be misled into buying what is intrinsically a very illiquid product. “It is certainly not for the masses,” says Shahdadpuri, a collector who owns works of many contemporary Indian artists, apart from holdings of the masters.
An Asset Called Self Preservation (Forbes India)