Neville Tuli looking for $ 33.5 million to invest in what is perhaps India's hottest market: Art.
Rising prices for works of contemporary India's pushing the head of Mumbai-based Osian Art lovers Ltd to launch a second art investment fund nation. Osian, with sales rooms in New Delhi and Mumbai, will start collecting money on June 5, Tuli said in an interview.
Days after the Mumbai stock exchange had its biggest weekly decline since 2001, a painting by Indian-born Francis Newton Souza sold at auction for a record $ 1.2 million. Price Indian artists such as Souza, Vasudeo S. Gaitonde, Tyeb Mehta and Maqbool Fida Husain was driven by the global increase in art investment, coupled with growth in Asia's fourth-largest economy that has swollen ranks of wealthy nations.
"The rich will come," said Pradipta K. Mohapatra, Chennai-based collector and chief executive for technology at RPG Enterprises, the Indian group with interests from software to supermarkets. "Young executives at banks and information technology is a new generation, buying art for the love."
Mohapatra, who has been buying art for three decades, said an oil painting by Yusuf Arakkal that he bought eight years ago for 45,000 rupees is now worth about 1 million rupees. Purchase new color pencil sketch of a nude woman by KCS Pannikar for 65,000 rupees.
Osian fund investors will need to put in at least 1 million rupees ($ 22,300) for a minimum of three years, said Tuli.
Souza Auction
At Sotheby's Holdings Inc. auction last week in London, Souza's "Amsterdam Landscape" sold for almost eight times from the estimates. Sales up 4.2 million pounds ($ 7.8 million), beating the target by more than a third. Souza died in 2002 in Mumbai after living mainly in the UK and the United States
Tuli bought at least four worked in the auction, which he said was for his private collection.
Christie's sold $ 15.6 million from the Indian modern and contemporary art in New York on March 30, setting records paintings by Husain and Gaitonde. Five years ago, India painting sales amounted to about $ 650,000.
India combined wealth of the richest 40 people jumped 74 percent to $ 106 billion, according to Forbes Asia's annual list announced in December. Twenty-seven members on the list are billionaires, more than double the previous number of years.
Prime Minister Manmohan Singh is trying to increase growth in the $ 775 billion economy to 10 percent per year in the next decade, from an average of 8 percent over the last three years.
"This is driven by economic growth in India and Indian artists to raise awareness."
`Sky's The Limit '
"The sky seems to be the limit for this collecting category," Yamini Mehta, specialist head of modern and contemporary Indian art at Christie's, said in a statement after the March 30 sale.
Since 2004, a dozen global fund has been trying to lure investors as art prices have soared. Among the earliest was the London-based Fine Art Fund, established in 2000 and managed by Philip Hoffman. Requires a minimum investment of $ 250,000.
Other funds, including China, run by Julian Thompson, a former chairman of Sotheby's International and a specialist in Chinese porcelain, which focuses on Chinese art, and New York's Fernwood Art Investments, founded by Bruce Taub, formerly senior director of international private client group at Merrill Lynch & Co.
In September, Mumbai-based Yatra Art Fund was set up with 107.5 million rupees. Yatra, which has a lock-in period of five years, attracted some 40 investors, said Geetha Mehra, chief operating officer of funds.
Original Work
"The general creation of wealth among Indians has sparked the market," said Mehra, who also runs the Sakshi Gallery in Mumbai, and will not reveal details about the fund or its performance. "The artists are very good. There is a strong original work done here."
Osian's was founded by the Deaf in 2000 as an art auction house, with the first sale held in February 2001, where the average lot price of 140,000 rupees and raised a total of 18:04 million rupees, Tuli said. At the last auction in March, Osian has an average lot price of 4.8 million rupees and raised a total of 417.3 million rupees, he said.
Art Fund was established by Osian's is structured as a private trust called Oseta Trustee Investment Co. The fund will be managed by Osian's experts, who will charge an annual management fee equal to 3 percent of assets, a maximum of 5 percent to cut spending and take 30 percent of profits after obstacles cleared funds at least 15 percent of annual profits.
Deaf expect funds to give investors annual returns of about 35 percent.
However, as art lovers Mohapatra prefer to buy the works they love rather than own the fund units.
"I would never invest a penny in funding the arts," said Mohapatra. "I welcome the funds, because they will provide depth to the market and there are hundreds of artists that can be done with these organized funds buying from them directly." Www.bloomberg.com
Rising prices for works of contemporary India's pushing the head of Mumbai-based Osian Art lovers Ltd to launch a second art investment fund nation. Osian, with sales rooms in New Delhi and Mumbai, will start collecting money on June 5, Tuli said in an interview.
Days after the Mumbai stock exchange had its biggest weekly decline since 2001, a painting by Indian-born Francis Newton Souza sold at auction for a record $ 1.2 million. Price Indian artists such as Souza, Vasudeo S. Gaitonde, Tyeb Mehta and Maqbool Fida Husain was driven by the global increase in art investment, coupled with growth in Asia's fourth-largest economy that has swollen ranks of wealthy nations.
"The rich will come," said Pradipta K. Mohapatra, Chennai-based collector and chief executive for technology at RPG Enterprises, the Indian group with interests from software to supermarkets. "Young executives at banks and information technology is a new generation, buying art for the love."
Mohapatra, who has been buying art for three decades, said an oil painting by Yusuf Arakkal that he bought eight years ago for 45,000 rupees is now worth about 1 million rupees. Purchase new color pencil sketch of a nude woman by KCS Pannikar for 65,000 rupees.
Osian fund investors will need to put in at least 1 million rupees ($ 22,300) for a minimum of three years, said Tuli.
Souza Auction
At Sotheby's Holdings Inc. auction last week in London, Souza's "Amsterdam Landscape" sold for almost eight times from the estimates. Sales up 4.2 million pounds ($ 7.8 million), beating the target by more than a third. Souza died in 2002 in Mumbai after living mainly in the UK and the United States
Tuli bought at least four worked in the auction, which he said was for his private collection.
Christie's sold $ 15.6 million from the Indian modern and contemporary art in New York on March 30, setting records paintings by Husain and Gaitonde. Five years ago, India painting sales amounted to about $ 650,000.
India combined wealth of the richest 40 people jumped 74 percent to $ 106 billion, according to Forbes Asia's annual list announced in December. Twenty-seven members on the list are billionaires, more than double the previous number of years.
Prime Minister Manmohan Singh is trying to increase growth in the $ 775 billion economy to 10 percent per year in the next decade, from an average of 8 percent over the last three years.
"This is driven by economic growth in India and Indian artists to raise awareness."
`Sky's The Limit '
"The sky seems to be the limit for this collecting category," Yamini Mehta, specialist head of modern and contemporary Indian art at Christie's, said in a statement after the March 30 sale.
Since 2004, a dozen global fund has been trying to lure investors as art prices have soared. Among the earliest was the London-based Fine Art Fund, established in 2000 and managed by Philip Hoffman. Requires a minimum investment of $ 250,000.
Other funds, including China, run by Julian Thompson, a former chairman of Sotheby's International and a specialist in Chinese porcelain, which focuses on Chinese art, and New York's Fernwood Art Investments, founded by Bruce Taub, formerly senior director of international private client group at Merrill Lynch & Co.
In September, Mumbai-based Yatra Art Fund was set up with 107.5 million rupees. Yatra, which has a lock-in period of five years, attracted some 40 investors, said Geetha Mehra, chief operating officer of funds.
Original Work
"The general creation of wealth among Indians has sparked the market," said Mehra, who also runs the Sakshi Gallery in Mumbai, and will not reveal details about the fund or its performance. "The artists are very good. There is a strong original work done here."
Osian's was founded by the Deaf in 2000 as an art auction house, with the first sale held in February 2001, where the average lot price of 140,000 rupees and raised a total of 18:04 million rupees, Tuli said. At the last auction in March, Osian has an average lot price of 4.8 million rupees and raised a total of 417.3 million rupees, he said.
Art Fund was established by Osian's is structured as a private trust called Oseta Trustee Investment Co. The fund will be managed by Osian's experts, who will charge an annual management fee equal to 3 percent of assets, a maximum of 5 percent to cut spending and take 30 percent of profits after obstacles cleared funds at least 15 percent of annual profits.
Deaf expect funds to give investors annual returns of about 35 percent.
However, as art lovers Mohapatra prefer to buy the works they love rather than own the fund units.
"I would never invest a penny in funding the arts," said Mohapatra. "I welcome the funds, because they will provide depth to the market and there are hundreds of artists that can be done with these organized funds buying from them directly." Www.bloomberg.com
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