The incomparable Jori Finkel tells the story of the original, and possibly only truly successful, art fund in The Art Newspaper. In 1904, André Level created an art fund that liquidated 10 years later for nearly four times the initial outlay. Although this early fund is often referred to, Finkel gives us great detail that reveals the fund to be more of a buying club than an art fund.

It also seems to have pioneered a form of artist’s guarantee whereby Picasso was paid a 300 franc deposit on his Family of Saltimbanques, the fund’s most successful purchase, and given the opportunity to improve upon the 1000 franc purchase price by finding another buyer.

Here Finkel lays out the terms:

Level laid out the basic principles in a contract signed in February 1904. Each investor would contribute FF250 a year towards art purchases for the collection, to be dissolved after ten years. Should the enterprise prove profitable, they would receive their money back, plus 3.5% interest. Any further profits would be distributed to Level (20%) and the artists (20%) before going to the investors. In the meantime, investors would have access to the works to decorate their homes. Level would serve as the director and would decide on each acquisition, with the help of a two-person advisory committee that had the power of veto. The group was young (most members were under the age of 30), and most were bankers and businessmen who played cards together.

The story of the original and greatest art fund  (The Art Newspaper)