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.