Art Gains Ground As An "Alternative" Asset Class On The Private Equity Model
- Created: Sunday, 20 February 2011 20:21
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.
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