Investors make 70pc gain as banks stay leery of new market
Acting on a hunch that Chinese contemporary art would be the next big thing, collector Paul Serfaty set up a private art fund last year even when some investment banks were steering clear of this non-traditional asset class.
'I believed prices would increase sharply, so I talked to some private banks such as BNP Paribas and UBS two years ago,' said the art lover. 'But banks are very careful. I'd say conservative.'
So Mr Serfaty, 51, who has been a collector for 25 years, and about 10 of his friends - including art collectors and some investors - last year established a private fund and started acquiring contemporary Chinese artworks. The group currently has 50 works in its expanding portfolio.
'The fund is a life-long [investment] and we've set our first target at five to seven years [after the fund's establishment],' said Mr Serfaty, who declined to disclose the initial and current value of the fund.
The group hopes the fund will grow to US$20 million at an appreciation rate of 15 per cent a year. Mr Serfaty, who also manages the fund, said he contributed about 15 per cent of the initial capital. On average, the value of the artworks surged 70 per cent in a year, he said.