Osian’s Art Fund Emerges as High Yielding Asset Class in Global Meltdown – artmarketblog.com

Osian’s Art Fund Emerges as High Yielding Asset Class in Global Meltdown – artmarketblog.com

Osian’s, today presented the 5th Six Monthly Disclosure Report (10 July 2008 – 9 January 2009) on behalf of the privately placed closed-ended Osian’s Art Fund (OAF). The Report establishes that the Osian’s Art Fund is one of the few investments providing a positive rate of return, more than 10.59% CAGR (post taxes) over the last 30 months, holding its own with relative stability, during the worse financial meltdown in global history.

In the current scenario, while Gold has emerged as the highest yielding asset class providing over 12.47% CAGR, followed by Debt Fund at 10.98% CAGR, the Osian’s Art Fund is only marginally behind (refer Attachment 1). The credibility of well managed, high quality art as an asset, for serious institutional investments, has now clearly emerged.

Mr. Neville Tuli, Founder-Chairman, Osian’s, said, “Today, we are close to achieving our first integrated global platform whereby the dual responsibilities of building great knowledge bases hand in hand with creating systematic wealth can be united on sustainable, accountable and transparent platforms. It will always be work in progress but the proximity of the bridge-building exercise is now clear for most to see.”

The Osian’s Art Fund, set up under the Indian Trusts Act, launched its first privately placed scheme Contemporary-1 on 10 July 2006, raising a corpus of Rs. 102.4 Cr. The Fund, a close-ended scheme with a lock in period of 36 months was open to investors only by private placement and the minimum investment was Rs.10 lac and then in multiples of Rs.5 lac.

The Fund attracted 656 investors from all over India. The top 10 cities from which the highest Osian’s client response was received were Delhi NCR (31.4%) followed by Mumbai (27.1), Kolkata (10.2%), Bangalore (8.8%), Chennai (7.9%), Hyderabad (3.9%), Surat (2.2%), Baroda (1.7%), Pune (0.9%) & Ahmedabad (0.8%). In totality, the Osian’s client base extended to 39 towns & cities, showing the national scale reach and interest. Out of the total number of investors about 82.72% had ventured into the area of investment in art for the very first time, though they were aware of Osian’s as an Auction House and Archive. Also, out of the total number of investors, 82.75% are individuals, 10.07 % are corporates and 7.18% are firms.

The Fund (as on 9 Jan 2009) has invested in a number of artists with a very well diversified portfolio based on their historical significance. These include the Progressive Artists Group (PAG) (20.92%), a Focus on Abstraction (17.20%), Calcutta Group & Painters (16.74%), a Figurative Focus (non PAG) (15.22%), Contemporary Art (8.33%), a Figurative Focus (Bengal) (6.17%), Cholamandal Artists (4.05%), a Figurative Focus (Delhi) (2.96%), Sculpture (2.78%), National Art Treasures (1.54%), Baroda School (1.11%) and Others (2.97%) (refer Attachment 2) V.S. Gaitonde, M.F. Husain & Akbar Padamsee are the three leading artists with the largest allocation.

High quality Indian art is more and more being seen as a credible asset, with many advantages over other assets. The Auction Sales turnover has taken a great leap from INR 133 millions in 1999 to INR 5527 millions in 2008, having achieved a growth of 51.26% CAGR.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

5 Responses

  1. Is this a reproduced press release from Osians?

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  3. Think Chinese art offers a better alternative to other countries.. and is a great new place to explore and diversify one’s collecting..The Getty is not alone, and is a good indicator of an important trend…I would predict that for the next few years Chinese Contemporary Art will become the next haven for the Chinese, .Although the storm of collecting Chinese Contemporary art started with Europe, it now has rightfully gone back to the Chinese who are now starting to collect and are beginning to understand and catch up with there own art history…..

    Its a matter of time that Chinese Contemporary art will have fully caught up to western prices…. with their collecting base outnumbering europe and the west.
    In the short term—the next 12 to 18 months—there will be good opportunities to buy works by top-tier artists in both painting and photography. By top-tier, I mean the 40 or so who have gained art-historical recognition, have been internationally exhibited, and are being acquired by museums in the West as well as Asia. Historical works by these individuals—the first generation of Chinese contemporary artists, from 1989 through early 2000s—are relatively scarce and will continue to gain value. The global downturn has yielded some attractive pricing, particularly in comparison to top contemporary artists in the West, creating smart buying opportunities. In fact, art funds focusing on Chinese contemporary art have been formed to take advantage of this moment. Museums are also acquiring for their collections.

    Chinese contemporary photography is a buying opportunity. It’s still undervalued relative to painting, which was the focus for collectors for many years. Quality works will become increasingly scarce, particularly as China develops as a consumer society with its own collector base. The Chinese audience with disposable income is growing, and a consistent percentage of those people will become art advocates and collectors.

    The Chinese economy may be slowing down, but it is not in a recession. China will remain among the world’s most attractive investment destinations, and art will continue to parallel this direction. The result is that Chinese contemporary art will weather this economic downturn and will come out as an even stronger player.

  4. I’ve been following the art markets in South East Asia for some time now. In midst of the economical meltdown, somehow the art market here has strength. In particular, the market of Kuala Lumpur , Malaysia. There is a very clever secondary market beginning in Kuala Lumpur headed by a local art entrepreneur named Clifford Richards. Wonderfully designed to bring returns to investors. He has successfully introduced art as an investment class to many. Malaysian art is wonderful, creative, new and in many ways undiscovered. Richards has in the present attracted the young working adults to begin looking into arts. Not only he has proven high and fast returns to his group of investors including my company ( we are now operating in Malaysia for 4 years now), but has a vision unlike any other. He forsee the future of art to be bright as art is not closely related to the performances of the the stock markets. Returns has been in the double digits ever since we have indulged in the arts. Some of Malaysia’s top artist are already in Christies and Sotheby. Richards has a wonderful plan too for the young and upcoming artist. ” What value has your art got if you haven’t a venue for it to be sold later?”. ..says Clifford Richards of Malaysia.

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