Manager Update - Q1 2014

01.04.2014

This quarter I took time to reflect on our achievements in the past 3 years and turned my attention to the next steps necessary to achieve our long term goals.

Vik Muniz, Pictures of Garbage, 2008-2011, on loan to the Tel Aviv Museum of Art

Our objective has always been to introduce new standards in collecting practices, transparency, ethics and fiduciary responsibility as fund managers. Our goal is to become the undisputed leader in the art investment industry. I am confident we are making strides in the right direction.

Where we are:

  • Collection: Our brand is slowly gaining recognition amongst collectors, curators and artists.
  • Infrastucture: We have laid a robust foundation and are ready to grow our activity substantially.
  • Performance: 29.1% net investor returns in just over 3 years, based on valuations proven conservative by our realizations - see Factsheet. Above average returns, low volatility and practically no correlation to other asset classes are the cornerstones that make art investing a true alternative to traditional hedge fund and private equity strategies. So far we are demonstrating it works on all three fronts.
  • Distribution: Still very limited. Our fund size is only circa 17 million USD. Our goal is to reach a minimum of 50 million USD by the end of our investment period in 3 years.

What next:

  • Advisory Board: We are excited to share the formation of our new Advisory Board. We have invited distinguished friends and supporters from diverse geographies and industries - all with valuable multi-disciplinary experience in either art or finance - to serve as ambassadors of the fund, to provide depth of knowledge in their respective fields, to generate ideas and opportunities for growth and to serve as a critical sounding board to the executive team.
  • Increased visibility: We have had good press coverage, appearing in a few articles, and have made numerous museum loans. We are considering strategic partnerships for the website to increase traffic as well as using PR agencies.
  • Distribution agreements: Under discussion with a couple of potential partners.
  • Strategic investors: Discussions are ubnderway with a few parties keen to invest in the prospects of this nascent asset class. 
  • New initiatives: We are developing a new residency program for artists that will bring structure and visibility to some of the artist promotion work we do, while at the same time supporting our business objectives.

Art Market

Reports released in the first quarter by various sources including TEFAF’s annual art market report continue to support our long-term thesis that the contemporary art market is experiencing a golden age where new collectors/investors, particularly from the developing world, are responsible for unprecedented price levels for top quality works and overall growth in the collecting category.

Market constituents continue to be very optimistic about 2014 in general, although there is an increasing sentiment that certain names, particularly a few US based artists, have achieved bubble status with auction prices dwarfing primary market prices for any available work…. resulting in upward price pressure in the primary market, which some believe unjustifiable and unsustainable in the long term.

Travel

Tapay's solo exhibition at Ateneo Art Museum, PhilippinesIn January I took a long trip in South Asia. In Singapore I spent a few days at Art Stage and the Biennale and then travelled on for a fascinating 5 day trip to explore the art scene in the Philippines, instigated by Rodel Tapaya's solo exhibition which opened at the Ateneo Art Museum. In March I visited Art14 in London, the Armory fair and Whitney Biennial in NY and some artist studios and galleries in Berlin. This all culminated in a number of new acquisitions detailed in the newsletter and on the website, as well as in the addition of several members to our Advisory Board. 

Please view Q1 2014 travel album.

Sales and Loans

Suzanne Landau & Serge Tiroche at the opening of Vik Muniz's TAMA exhibitionWe made no sales in the first quarter but have placed 3 works which will be auctioned during the second quarter in Hong-Kong, Shanghai and New York.

We secured several loans to the Tel-Aviv Museum, the Museum of Arts & Design in NY, Des Moines Art Center in Iowa as well as the 10th Gwangju Biennale in Korea.

Read more about our Global Lending Program.

Artist Spotlights

This quarter we turn East and post artist spotlights on two of China's most exciting emerging artists, Liu Wei and Zhao Zhao, both braodly represented in our collection.

Team

Our TeamWe reshuffled roles in order to provide new challenges and growth opportunities to our team. Yaron Haramati, who has been responsible for setting up the technology and logistics infrastructure for the past 3 years, has assumed additional business development and sales oriented responsibilities.  Daniel Lev-er has taken over Yaron’s responsibilities as logistics and collection manager. Tali Kayam, our research analyst, is leaving to focus on her studies and has passed most of her responsibilities on to our multi-tasked Investor Relations Officer, Rachel Samuel. We are currently interviewing for a new reasearch analyst and online content manager. 

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