Financial firms cash in on art boom

visionsart — Fri, 10 Oct 2008 16:04:00 +0000

Madhumita Mookerji

Offer advisory services and portfolio management for art investors

KOLKATA: The canvas is significant though not particularly large at present. But, especially at a time when stock prices across the world are falling sharply, many strongly feel art is not just for art’s sake but a sound alternate investment option.
Several players — Edelweiss Securities, Bajaj Capital Art House (BCAH) and Art Vibes — are homing in on this potential by offering what is being regarded as art advisory services and portfolio management.

Edelweiss Securities, for instance, introduced an art fund through Yatra Funds and since January 2008, has tied up with Copal Arts to design portfolios in which art lovers and collectors can acquire quality works of artists.

Similarly, Bajaj Capital Art House, launched in August, offers art investment advisory, evaluation of art pieces, authentication certificates, fine art insurance, art restoration and art resale services.

Art Vibes has a strategy to provide portfolio management services for the private and corporate collector. “A wide variety of opportunities would include art collection advisory, valuation and appraisal, documentation and storage, auction representation, cataloguing, restoration and conservation, education and outreach programmes and sponsorships,” said Aashu Maheshwari, head of Art Vibes.

BCAH also provides services in branding requirement of visual artists through promotions, branding and representations etc.

Anurag Mehrotra, head of wealth management, Edelweiss Securities, said, “The Indian art market, though at a very nascent stage, finds connoisseurs worldwide and the numbers are increasing. The valuations are fairly low compared with international art pieces. In terms of market size, the Indian art market is only about 0.1% of the international market. So, the potential for growth is huge.”

In the mid-90s’ Indian art auctions were held in London and New York. Slowly but steadily, art is enlarging its canvas in India, with new galleries being set up in Bangalore and other cities. “Art was viewed as a status symbol. But post 2000, it has emerged as an investment option. Now, it is being considered as a separate asset class,” said Anu Bajaj, chief executive officer, BCAH.

The Indian art market is today valued at about Rs 1,500 crore growing at 30-35% annually. But what are the pitfalls? “The art market here is not regulated. Though Sebi and the government have taken some steps to improve efficiencies like introducing ban on collective investment schemes in art works, the market needs to mature like equity markets,” said Mehrotra.

“We don’t see any big risks yet but yes there are concerns like liquidity, transparency mechanisms, fake art works.”

The post Financial firms cash in on art boom first appeared on Indian Art News.

Stocks-hit investors cosy up to art

visionsart — Fri, 04 Jul 2008 17:10:00 +0000

Stocks-hit investors cosy up to art
4 Jul, 2008, 0146 hrs IST,Shailesh Menon, ET Bureau

MUMBAI: Investors may not be willing to touch equities with a barge pole, but they still appear to be open to art as an alternative asset class.

Contrary to popular belief, the ongoing bearish phase in the stock market has not impacted the sentiment for art. Thanks to corrected prices, prospective art collectors and investors are queuing up to buy quality works of art at “realistic” prices, say art advisors.

The ET Art index has only tripped 8% over the past six months, in sharp contrast to equities, which have fallen nearly 40% from their peaks at the start of this year. According to art advisors, post the deep correction in contemporary art segment in mid-2007, investors (predominantly ultra-high net worth individuals — UHNIs) are thronging auctions and galleries to buy or invest in quality works of both masters and amateur artists.

Record price-tags for the paintings of FN Souza, Tyeb Mehta and Subodh Gupta — at Christie’s and Sotheby’s — are testimonies to the fact that Indian art has fast gained a foothold in the international art market.

“For sure, even in these times of bad stock markets, art is still holding on as a good investment option. People are still buying quality art (work of masters) even though prices are trending up,” said Osian Art Advisory manager Lynn Sivanand.

Echoing Ms Sivanand, Ajay Seth of Copal Art said: “Even amateur artists with good probability of an upside in prices are getting good quotes in the art market.”

Art emerged as an exotic asset class in the four-year bull run in the equities market. Viewing it as an opportunity to corner more high net worth individuals, several equity broking houses began advising clients on investments in art.

Dawnay Day AV, HSBC, Edelweiss Capital, DSP Merrill Lynch, Kotak, Citibank, ABN Amro and ASK Wealth Advisors are some of the financial majors vying for the top spot in this segment.

“If you look on client-to-client basis, there is a small shift of investments from art to equities. Currently, investors are moving surplus funds to equities market. But then, that is not causing a crisis (like a sell-off) as there is great interest from genuine art aficionados to collect quality works at corrected prices,” said Dawnay Day AV executive director Surabhi Gupta.

“Moreover, equities market do not directly impact art market as the profile of players here are different. The art market is not going through a slowdown,” said Edelweiss Capital alternative investment head Anurag Mehrotra.

However, none of the brokerages (or galleries) have any plans to raise art funds in the near term. According to investment advisors, the Sebi diktat, restraining unregistered entities from pooling in money to float art funds, is coming in the way of these entities to raise fresh funds. As per Sebi, an art fund is a ‘collective investment scheme’ — wherein money is collected from public — and therefore, it is mandatory for them to have a certificate of registration as a ‘collective investment management company.’

The post Stocks-hit investors cosy up to art first appeared on Indian Art News.

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Financial firms cash in on art boom

Stocks-hit investors cosy up to art