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The Fine Art Fund’s “Moderate Success” Explained

June 7, 2013 by Marion Maneker

Peter Doig, Iron Hill
Peter Doig, Iron Hill
Barron’s talked to Philip Hoffman of the Fine Art Fund and got his rundown on what the firm does right. Hoffman demurs slightly, calling his firm a “moderate success,” but did bother go detail some of the fund’s wins and even explain some of its losses. A full scorecard on the fund awaits the winding up. In the meantime,

Fine Art purchased Frank Auerbach’s Mornington Crescent in 2005 after Hoffman’s experts studied the figurative painter for a decade. Auerbach, who ran in the same “London School” circuit as Francis Bacon and Lucien Freud, kept a low profile. The reclusive artist’s works, which were then selling at $500,000-$800,000, about a tenth the price of Bacon’s. So when the right Auerbach came along, the firm bought it for $1.1 million and a year later, sold it for $2.3 million.

In 2007, Hoffman’s group also purchased for $1.1 million, Glenn Brown’s Dalí-Christ 1992, previously in the Saatchi Collection. The group sold it in mid-2010 for 60% more, setting an artist record at $1.76 million. The group did better with Peter Doig’s Iron Hill, which sold for $1.8 million in 2006, a 107% profit just one year after its purchase. Doig’s contemporary landscape evokes a sort of Hopper-like nostalgia tinged with a hint of despair.
With the group’s first fund set to mature in two to five years, it is impossible to get a clear picture of its total returns. Hoffman claims that for every work the firm has lost money on, 19 works have produced profits. They did take a hit on a work by a Chinese contemporary artist, for example; the firm bought it for $220,000 and sold it last year for $200,000. The loss, Hoffman says, was because the artist overproduced and saturated the market after the fund made its original purchase.

 The Hedge Funds of the Art World (Barron’s)

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Filed Under: Art Funds

About Marion Maneker

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