Art investment fund buys masterpieces
Castlestone Management, the asset manager which launched a retail art investment fund in May, bought works by Pablo Picasso and Andy Warhol for the lower than estimated price of £476,000 at Sotheby's and Phillips de Pury's auctions this month.
Castlestone says its fund, which has a low entry investment of £10,000, is world’s first retail art fund.
The fund bought Picasso's Adolescents for £265,000 with the buyers premium, at a Sotheby's auction, after an estimate of £150,000 to £200,000. It bought a Warhol silkscreen, Five Guns, for £211,000, with the buyers premium, below the estimate of £250,000 to £350,000.
Chief executive Angus Murray said the fund, which has $28.5m (€20.3m) under management, $25m of which is from Murray’s own pocket, will provide a good hedge against inflation.
“Whenever the value of money falls, as it is doing now, the value of real assets rises, whether it’s art or any commodity such as gold”, Murray said. “Gold and art are running in parallel, both driven by the falling real value of money”.
Since its launch the British Virgin Island-domiciled fund has not been valued but the fund tracks the art market. The AMR 100 index which tracks art prices, has been steadily falling since last October's peak of 27430, now at 20% below its peak, suggesting there may be further price falls in store.
Murray agreed that over a long period, investors can get a better return from equities. However, if inflation increases, art and other tangible assets like gold would provide a hedge.
The Picasso and the Warhol will be added to artists whose works were bought at a series of auctions in London this summer including Yves Klein, Keith Haring and Arman.
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