Works of art have fascinated human beings since time immemorial. Now it’s the turn of finance folks.Mona Lisa, the painting of a woman with a graceful smile, fascinated art lovers, cutting across regional, language, and cultural boundaries, for centuries. It made Leonardo Da Vinci, the man who created Mona Lisa, a legend. In fact, mankind’s fascination with the works of art has made many artists and their creations literally eternal. From the days of great artists like Da Vinci and Michelangelo to the contemporary celebrity painters like MF Hussain, the craze for the works of art has only grown. This has seen the value of the works of art soaring to record highs in recent times. This has made work of art an expensive proposition and hence, buying a piece of art is almost out of reach for many art lovers. However, this has led to the creation of another billion dollar market as investment mavericks created innovative investment vehicles such as art funds, akin to mutual funds, which allow investors with relatively less investment power to invest in the work of art. Indian investors, now with the launch of Yatra Art Fund, get a chance to share a pie in the growing global market for art.
But, investors need to do their homework properly before they take the plunge. Nonetheless, investment in art presents them with the opportunity to not only participate in the growth of the market for art, but also diversify their investment portfolio. While the motive behind the investment in art may vary from investor to investor, what investors should consider before taking the plunge is that they should have enough margin of safety. They should not put all their eggs in one basket, so as not to spend sleepless nights worrying over, suggests Geeta Mehra, Director of the Mumbai-based Sakshi Art Gallery, which has promoted the Yatra Fund. It is a close-ended fund with a maturity period of four years. It aims to generate returns of about 20% per annum. While art fund looks akin to a mutual fund, however, the similarity ends there itself. A major difference is that unlike the mutual funds, which come under the purview of Sebi, there is no clarity as to who will govern them. “The Indian Contracts Act does not include artworks in the category of securities” says Nilesh Shah, Director of Edelweiss Capital, which has been mandated to raise capital from prospective investors for Yatra Fund. One needs to make a minimum investment of Rs. 2 mn in two tranches. Further, unlike mutual funds, art market is a prerogative of a select group of experts. That makes it quite challenging for an investor to take a call on a particular fund. |
