Kolkata is emerging as a hot spot for global art management funds with most of such funds betting on lesser-known artists. Although artists with high net worth like MF Hussain, Jatin Das, Jogen Chowdhury and others are prompting banks to look into art as an alternative asset class, the increasing number of art funds, investing on next generation artitsts, have been able to drive the Indian art market as the fourth most buoyant art market in the world.
Anurag Mehrotra, head of wealth management of Edelweiss Securities Ltd told FE that although the Securities & Exchange Board of India (Sebi) is yet to come out with regulations for the Indian art market, it has raised more than Rs 600 crore in the last three years.
However, regulations by the Sebi will be a welcome step as the art market will be ratified and given credibility by the government. Art funds are eager to cooperate with the Sebi, Mehrotra said.
He said the investors’ profile has now extended beyond art collectors and high net worth individuals to young entrepreneurs and non-resident Indians, who seek quick returns through rapid sale by speculators. But art, as an asset class, has low liquidity and involves medium risk. Investments in art funds should be made for long term gains.
However, managers of art funds across the globe are trying to ride on the Indian art boom, which has grown 485% since the last decade and many of them are tying up with the art galleries in Kolkata.
The funds are identifying upcoming artists and their undervalued arts to sell their works at gallery shows and auctions in India, Europe and the US.
Edelweiss Securities, which markets art funds values the Indian art market at more than $350 million, up from $200 million in 2005.