What would you like us to do with the funds you've selected
Angus Murray, the manager of the Collection of Modern Art fund, knows about the art of portfolio diversification.
By Fund Strategy Tuesday August 18, 2009
His fund was launched in April by Castlestone Management, a boutique London and New York asset manager, and invests in irreplaceable and unique art pieces.
Murray’s investment philosophy focuses on building a diversified portfolio of artists including Jean Michel Basquiat, Lucio Fontana, Jasper Johns and Willem de Kooning.
Having recently added pieces from Pablo Picasso, Andy Warhol, Keith Haring, Yves Klein and Arman, he says that portfolio composition is key to ensure that the returns of the fund are line with the art market. When this is achieved, Murray says, the fund can act as a real asset. Its value appreciates as money supply and inflation rates increase.
“Art is an unleveraged, irreplaceable real asset, which behaves very much like gold over the longer-term,” Murray says.
More gold is being mined, yet Andy Warhol is not producing any more. “We buy post-war art from deceased or non-producing artists with established reputation,” Murray says.
The Collection of Modern Art fund owns a diversified collection of museum quality art works, owned by the Art Market Research Post-War Art 50 Index. The index focuses on 50 key artists of the post-war period, whose most important work was produced between 1950 and 1980.
Contemporary cutting-edge art is often subject to speculative buying. But Murray says he is not trying to determine the next big artist. His fund seeks medium- to long-term appreciation based on research and the proven strength of the market for these artists.
Most of Murray’s investors are retail investors that want to invest in paintings that have been valued at $300,000-$600,000 (£182,000-£363,000) by Art Market Research. The most expensive piece is valued at $1.2m.
“When we buy a Pablo Picasso, we know that we can sell it,” Murray says. Although liquidity is clearly one of the risks when investing in art.
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