|Art Gains Ground As An "Alternative" Asset Class On The Private Equity Model|
|Sunday, February 20, 2011 20:21|
Wealthy people have always been patrons of the arts, but once again the idea of investing in fine art is gaining popularity among those looking for new ways to generate market-beating performance.
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Art funds built on the private equity fund model -- accredited investors only, "2 plus 20" fees, closed-end partnership structure -- have outperformed the broad market over most recent time periods.
In theory, the ability to offer these products provides a differentiating edge for advisors as far as art-loving clients are concerned.
But in practice, let's face it: truly "art-loving" clients are probably more interested in collecting their own treasure than in owning a securitized piece of a fund that buys and sells the treasure without anyone ever enjoying it.
And for clients who actually don't care about art, this asset class requires specialist expertise to manage effectively -- and as yet, the funds don't really have much of a track record.