jeudi 17 janvier 2008

Hoffman raises $25 mn Indian Fine Art Fund

Economic Times, 17 Jan, 2008, 0045 hrs IST,Vivek Sinha, TNN

NEW DELHI: Indian art’s strawberry spring is now attracting the suits. With the Christie’s and Sotheby’s of the world launching India-specific auctions, professional art funds — who raise money and invest in works of art — are now entering the fray.

Philip Hoffman — the founder of one of the largest international art fund management firm, the UK-based The Fine Art Fund Group — is raising $25 million for an Indian Fine Art Fund. This will be the largest international fund till date to cater to the booming demand for Indian art. And in terms of size it would be second only to The Osian’s Art Fund that had raised Rs 102.4 crore from local investors in 2006.

The Indian Fine Art Fund, which would raise funds through both resident Indian, NRIs as well as global investors, would be a 5-year closed-ended offshore fund. The minimum investment into the fund, which has just opened for picks, has been fixed at $100,000 or about Rs 40 lakh. Art funds basically raise resources which are used for purchasing works of art.

The art assets are later sold depending on the time horizon of the fund to garner returns for its investors. In simple terms, it works like an asset management fund, more like a mutual fund picking up works of arts than stocks. The Indian Fine Art Fund will look at buying Indian art with price tags ranging between $10,000 or Rs 4 lakh to $1 million or Rs 4 crore. The fund would be eyeing contemporary as well as modern Indian art. Sources said the fund may consider miniatures as a category.

Mr Hoffman, a former deputy managing director of art auction house Christie’s, will be assisted by Indian businessman Purrshottam Bhaggeria for the Indian Fine Art Fund. Mr Bhaggeria is one of the promoters of public listed textile company Filatex apart from other businesses of his group.

Mr Hoffman told ET, “The market for Indian art globally is still in its emerging phase and the growth has been much slower compared to that of China. One difference between the two has been that as against the Chinese art market where the demand spurt came from European and American buyers, Indian art till now has largely been bought by Indians or Indians living abroad. According to estimates the size of Indian art market has grown from $2 million to $400 million over the last seven years. While the exponential growth rates may not continue I still see the demand for Indian art growing significantly from the current levels to cross $ 1 billion soon. Indian art market is by no means matured. The global art market is estimated at about $60 billion today,” he added.

On the state of prices in the Indian art market, he said, “There are three categories of artists, there are some big names whose artwork prices have shot up very quickly over a short period and there is a feeling among some investors that they have hit a ceiling, there are some artists who are just starting off and there are some for whom we see a drop in prices in the next 6-12 months.”The Fine Art Fund Group currently has three funds in operation internationally including Fine Art Fund I, Fine Art Fund II and the Chinese Fine Art Fund with total assets under management of $100 million. The London-based group is looking to raise another $100 million through its various funds this year including the Indian Fine Art Fund and the proposed Middle Eastern Fine Art Fund.

Over the last 2-3 years a number of art funds have cropped up in India. Most of these funds are started by people who have been engaged in managing some gallery or are art enthusiasts or collectors. Apart from Osian, some of the other art funds in India include India Art Fund— launched by the wealth management division of Kotak Mahindra Bank, Yatra Fund and Crayon Capital Fund. ICICI Bank is also is also in the process of raising a $25 million art fund primarily targeting Gulf-based NRIs.

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