The news that Emirates National Bank of Dubai had announced a partnership with the Fine Art Fund got the Financial Times curious about the efflorescence of art funds:
The Fine Art Fund Group already has similar relationships with Banco Santander, EFG Eurobank Private Banking and Banca della Svizzera Italiana.
The company, started by Philip Hoffman, a former finance director at Christie’s, said 2010 was its busiest year to date. “What we’re seeing is a huge number of individuals allocating money to art that have never touched art before,” he says.
Last year, the Fine Art Fund Group launched a managed art portfolio service targeted at private families that want to build up an art collection for investment. Since July, it has set up 10 individual accounts, varying in size from $2m to $150m. The minimum investment for this type of fund is $1m over three years.
The firm is also raising money for a five-year $100m Fine Art Fund that invests in western art from Old Master paintings, to Modern, Impressionist and Contemporary art. It has a minimum investment of $250,000, charging a 2 per cent management fee and a 20 per cent performance fee.
Some private banks are now considering launching their own art funds to meet client demand. A spokeswoman for Deutsche Bank says it is an area of the art market currently being researched by the bank.
Banks Move to Keep Their Top Clients in the Picture (Financial Times)