Investors looking to diversify portfolios turn to art investment fund

Global Business

Chinese investors looking to diversify beyond stocks and bonds are turning to a new way to make money: the art investment fund.

For people that have dreamed of owning a Picasso or a Rembrandt, there might be no better chance than now.

CGTN’s Martina Fuchs reports.

Investors looking to diversify portfolios turn to art investment fund

Investors looking to diversify portfolios turn to art investment fund

Chinese investors looking to diversify beyond stocks and bonds are turning to a new way to make money: the art investment fund. For people that have dreamed of owning a Picasso or a Rembrandt, there might be no better chance than now. CGTN’s Martina Fuchs reports.
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Turning a passion into investment, China’s love for art is spreading online.

Beijing’s Hihey.com, an art trading website founded in 2011, has spotted the opportunity.

Online art marketplaces have grown with the Internet, offering art enthusiasts and investors an alternative to traditional auction houses.

Art funds are structured like hedge funds and generate returns through the acquisition and disposition of art work.

They are managed by an investment manager or advisory firm that receives a management fee and a portion of the returns.

Although still a tiny fraction of the overall fund market, the sector has been gaining attention by the well-heeled all over the world, including China.

Online art funds show a growing appeal for ultra-high net worth individuals and investors looking for ways to diversify their portfolios, especially in new growth markets in the Middle East, Latin America or Asia, and especially here in China.
But, they are a bit like the Wild West. They’re unpredictable, largely unregulated and dominated by speculators.

In 2015, 20 art funds existed in Europe and the United States, and 20 in China.

The overall art fund market reached some $1.2 billion in 2015, down from $1.27 billion in 2014 and a bit over 2.1 billion at its 2012 peak.

The artists themselves have mixed opinions, but most agree that there’s no way around it.