A painting by Orazio Gentileschi  dated 1621 and representing the myth of Danae was sold last January 28th at Sotheby’s auction in in New York for $35mln. We report an article whee the lawyer Pierpaolo Carbone (Lemme avvocati e Associati) describes the connection between art as safe heaven and real asset, factually intended as part of the investors financial assets.

The Art of Finance
by Pier Paolo Carbone – Lemme Avvocati associati

At this historic moment when traditional investments are not reaching satisfactory performance and are subject to strict restrictions, the art market, by now global and without boundaries, confirms itself  as one of the most popular and effective safe heaven asset in which we can allocate extra liquidity, assuring in the long-period capital-gain, against the stock exchange uncertainties.
As we know, the “market of beauty” has a late reaction to the economic and political changes, experiencing minor reductions than other markets performance.
It is no coincidence that in the last years the Art founds are representing a great alternative for whom are willing to speculate in the art sector, in order to diversify their financial, but also cultural heritage.
Concerning their structure, Art funds have a similar functioning as the one of other investments funds, from which they differ just for their specific object (art): investors money are assigned to management companies, in this case with a special technical consulting of Art advisors , and then they employ those money to buy art ( directly from artist, private collectors or art galleries and auction house)

The minimum share to have the access to funds are around 10.000 euros. There are 2 kind of funds : long term funds (8-10years) with a 3/5 years lock-up which diversifies the acquisitions among all art history works; or we can have short-term funds (5 years) , more speculative ones, which focus more on contemporary art where the trading is now more easy.

As we said, the investor who subscribe a share doesn’t need any knowledge of art history or art market, as it will be managers and specialists duty to create a collection of works, buying them at the most cost-effective price, verifying their authenticity, all on the basis of the investment return, risk diversification, liquidity and market conditions, in order to re-sell them conveniently on the right moment.

Therefore, just under the right circumstances and with proper precautions, to subscribe to a Art fund turn into an effective and tangible alternative investment, characterized by less uncertainty and lower costs (as they’re cut down by the number of transactions) as well as subtle tax benefits , if compared now to other financial products.

 

Provenience: news-art.it (Italian language article)

 



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