Found Fine Art Fund

Betting on BRIC Speculation, Brazil Launches Its First Art Investment Fund

Courtesy Phillips de Pury & Company

Beatriz Milhazes's "Eu só queria entender por que ele fez isso

 (I just wanted to understand why he did that)" 

sold for $585,000 at Phillips de Pury last month.

Plural Capital, an investment firm based in Rio de Janeiro and São Paulo,has launched BGA Private Equity Investment Fund, a new art-fueled market 

venture worth $24 million. Its strategy? Buy contemporary works, 

mainly from Brazil, for three years, and then spend two years selling off 

the art it has purchased.

With the novel investment vehicle, Brazil now follows the London-based 

Fine Art Fund and Moscow-based Sobranie.Photoeffectinto the dubious 

business of encouraging private investors to use the contemporary art market 

as a financial instrument. 

(Other countries have recently explored other models, with companies 

inChina and France selling shares in groups of paintings 

or individual artworks on the stock market.)

The Brazilian art market recorded a 38 percent increase from 2008 to 2009,

even as markets elsewhere were reeling from the financial crisis, 

according to a report by Bloomberg that draws on market analysis by ArtTactic.

 "There's a deep group of Brazilian collectors and there's been 

less speculation in that particular market," Philip Hoffman, 

head of the Fine Art Fund, told Bloomberg.

 "We do have investors interested in Brazil."

At its BRIC sale in London last month, Phillips de Pury sold 

eight of 10 Brazilian works, with the top Brazilian lot,

an abstract 1989 work by Beatriz Milhazes, fetchig $585,000. 

Other big-name Brazilian artists include sculptor Lygia Clark, 

whose 1967 aluminum "Bicho" sculpture sold at Phillips de Pury

last year for $565,400. In February, a painting by Adriana Varejao

attained a price of £1.1 million ($1.77 million) 

at Christie's London sale in February.

Yet thus far the Brazilian market has been narrow, 

with only four or five artists driving prices upwards, 

ArtTactic states in in the Bloomberg report. 

"We believe the recent auction performance by Varejao 

and Milhazes will increase confidence among consignors 

and buyers, and we are likely to see a broader range of 

Brazilian artists coming to the auction market," ArtTactic added.

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