Have You Considered Art Investment Funds?
Have You Considered Art Investment Funds?
What makes a piece of art truly great? Is it the art itself, or is it the artist who created it? Is art great because of its culturally iconic status, or because of what it represents? Art, after all is very subjective and what one person feels is worthy to be called a masterpiece, another person might find rather bland and unexciting. Some pieces of art are extremely valuable, like the Mona Lisa for example, while others are only worth a few dollars. In any case, there seems to be a growing number of art fans these days, especially among the wealthy. According to the CEO of one very successful investment management company, Larry Fink of BlackRock Inc., art is becoming a serious asset class. Recent record sales and big upside potential would seem to concur as more and more wealthy art fans are getting into the business of collecting art.
Looking to Make a Profit
So who are these players in the world of art investment funds? Many of the people who manage these funds are financial industry professionals who often have the experience, or at least a strong interest, in the art world. These art investment fund managers offer several types of services, including investor relations, fundraising, market monitoring, strategy development, and managing the disposition of a fund’s assets. In most cases, those who invest in the art are looking for an opportunity to diversify or hedge their investment.
Must Meet Qualifications
There are certain qualifications that investors have to meet. First and foremost, they have to be “accredited investors” according to SEC regulations. That means they have to be financially sophisticated institutions or individuals that don’t require as much protection as unsophisticated investors. Common examples of institutional investors include:
•Sovereign wealth funds
If an individual wants to gain “accredited investor” status they have to meet at least one of three criteria: 1) have a net worth individually or with a spouse of at least $1 million; 2) must earn more than $200,000 a year individually; or 3) have a combined income of at least $300,000 for the last two years with a reasonable expectation of the same income level going forward.
Pros and Cons
As with most investment opportunities, there are both pluses and minuses to art investment funds. One advantage they offer is that they are not subject to the volatility of traditional investment markets like stocks and bonds, which means they give you another option to diversify your portfolio and build some strength in other areas. This can help counter losses you might take during periods of inflation and downturn. Art also usually holds its value well, which means you don’t have to worry about losing money on your investment. One downside for some investors is that artwork does not tend to follow traditional financial modeling. Art funds also usually require experienced professionals that can help advise on the purchase and sale of the art assets. Investing in art is not for everyone, but with a little knowledge and some expert advice art as an investment can be a lucrative endeavor, as well as a nice way to offset one’s investment portfolio.
We hope you found this article about “Have You Considered Art Investment Funds?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Insights Into Venture Capital Investing From Seminar 1 of 6 (To register for seminar 2 of 6 FREE, click here.) “In an era where financial landscapes are constantly being reshaped, it’s crucial for investors to stay ahead of the curve. The Venture Vision Webinar, a joint initiative by GROCO and Impact Venture Capital, recently hosted…
Introduction: In this interview, Alan Olsen, CPA and featured guest Micah Fink discuss how Horses and Heroes use horses to aid veteran care and much more. Transcript: Alan Olsen Welcome to American Dreams. My guest today is Micah Fink, CEO and founder of Heroes and Horses. Micah, welcome to today’s show. Micah Fink Alan, thank…
Introduction: Two dad’s discussing life balance in the hectic world of IPOs with featured guest, Travis Combs, Managing Director at the Effectus Group. In this interview, Alan Olsen, CPA, MBA and Travis address family, faith, career, client’s best interest, and trying to strike a balance. Transcript: Alan Olsen Welcome to American Dreams. My guest today is…
Introduction: A candid discussion about investment banking and philanthropy with Mike Bennett, Managing Partner of Crewe Capital. In this interview, Alan Olsen, CPA, MBA and Mr. Bennett open a window into his Crewe Capital‘s early beginnings the connection between investment banking and philanthropy. Transcript: Alan Olsen 0:01 Welcome to American Dreams. My guest today is…