Art as an Investment. What are Art Funds?

Explore Art Investment Options and Discover the Path to Wealth and Beauty

In the fascinating realm of art, beyond its profound ability to express emotions, transmit cultures, and stimulate creativity, there has emerged a facet that attracts bold investors seeking diversified and profitable opportunities. Art, in all its forms, has proven to be an appealing asset class for those looking to expand their investment portfolios. In recent years, we have witnessed significant growth in investment funds exclusively focused on art pieces, known as Art Funds or Art Investment Funds. These investment vehicles have captured the attention of those seeking not only aesthetic appreciation but also solid financial returns. In this article, we will explore how art not only fulfills emotional and cultural functions but also how visionary investors have found in it a means of safe and efficient diversification, marking the evolution of the financial market into creative and artistic territories.

As the art market continues to evolve, an increasing number of individuals are considering it as an investment, seeking both appreciation in value and aesthetic pleasure. Two notable cases exemplify the investment potential in art: Jean Dubuffet's painting "Célébration du Sol" (1957) and Camille Pissarro's "Les Coteaux de Gisors, Temps Gris" (1885). "Célébration du Sol," purchased for €360,750 in 2011, saw its value rise to €1,449,000 in 2017, yielding a net CAGR of 22%. Meanwhile, "Les Coteaux de Gisors, Temps Gris," which failed to sell in 2009 at a $600,000 estimate, was sold for $398,500 in 2012 and reached $531,000 in 2017, preserving its value despite unfavorable market conditions. These cases highlight the resilience of certain high-quality artworks to market volatility and underscore the investment potential in art. In this exploration, we will compare two main approaches: investing through art funds and direct investment in artworks for personal collections.

Art Investment Funds: Exploring Options

Art Investment Funds have gained popularity as an accessible investment option for those entering the art world without the need to invest large sums in a single piece. Three prominent names in this field are Masterworks, Artemundi and The Fine Art Group.

Pros and Cons of Art Funds

Pros:

• Diversification: Investing in an art fund means buying a stake in a diversified portfolio, reducing the risk associated with investing in a single piece.
• Professional Management: Funds are typically managed by art experts who make informed decisions on which artworks to acquire and when to sell them.
• Accessibility: Investing in funds does not require purchasing an entire artwork, making it more accessible for all budgets.

Cons:

• Less Control: Investing in a fund means relinquishing some control over investment decisions.
• Fees: Art funds often charge fees for management and administration, potentially reducing potential gains.
• Lack of Direct Enjoyment: Not physically owning the artworks means missing the opportunity to enjoy them in person.

Direct Investment: A More Intimate Approach

Investing directly in artworks for personal collections also has its unique advantages.

Pros and Cons of Direct Investment

Pros:

• Aesthetic Pleasure: Enjoying the visual appeal of the artworks in your home or personal space.
• Lower Indirect Costs: Avoiding commissions and fees associated with art funds can maximize long-term gains.
• Greater Control: You make all decisions related to the artworks you acquire and when to sell them.

Cons:

• Higher Risk: Investing in a single piece or a limited number of artworks carries a higher risk of loss.
• Required Research: Solid knowledge is necessary to make informed decisions on which artworks to purchase.

At 32 Reales, we believe that art and antiques offer unique investment opportunities and aesthetic pleasure. If you're ready to venture into art investment, we encourage you to explore the options we have available. Whether through our exclusive selection of unique pieces or considering Art Investment Funds, we are here to guide you at every step.

Remember, both fund and direct investments have their own advantages and challenges. The choice depends on your goals and personal preferences! Regardless of the path you choose, art investment can be a rewarding and lucrative experience.

Artworks that can generate interesting returns