Art Investment Firms

This post is meant to bring some clarity into the art investment firm business. What is it exactly?
When investing in a portfolio, it's important to have a certain amount of diversity, you know, in case things don't work out with one of your investments so you haven't put all your eggs in one basket. Investing in art serves that purpose when diversifying your portfolio of investment, it provides another alternative for returns on assets. It seems like those investors from Wall Street want something new, high risk, high status, exciting, and hopefully beautiful- if they ever get to see the art they invest in.

The New Yorker wrote an article on the subject, which explains it well . Click here for full article.

"In 1904, André Level, a French financier, persuaded twelve other investors to contribute two hundred and twelve francs apiece to a new investment fund called La Peau de l’Ours (“the skin of the bear”), which was targeted at an unusual market: modern art. Over the next ten years, the fund bought more than a hundred paintings and drawings, including major works by Picasso and Matisse, before selling off its entire collection in a giant auction, at the Hôtel Drouot, in Paris, on March 2, 1914. The sale was more lucrative than even Level could have hoped: some paintings went for ten times the original price. When it was over, the partners found that they had quadrupled their initial investments."

A trick to making something valuable, is keeping it scarce, unique, and one of a kind. This type of investment brought high returns, however, can this still be the case with so many of these firms popping up in recent years?

Here's some of the names coming to mind:
Fine Art Wealth Management (UK)
Aurora Fine Art Investment Fund (Moscow, NYC)
Fine Art Fund (UK)
The Artist Pension Trust (Global)
The Art Trading Fund (UK)