Yatra to launch second art fund

Buoyed by the success of its first art fund, which saw an appreciation of 38 per cent in value terms in about an year’s time, Yatra Art Fund is launching its second art fund next month.

The fund size of Yatra-2 would be bigger at Rs 75-100 crore compared with Yatra-1’s Rs 11 crore, raised in September 2005. The investment objective of the second fund also varies slightly from the first fund.

While the first fund invested in the works of masters, the mandate of Yatra-2 art fund is to invest in the works of established contemporary artists, said V Sanjay Kumar, trustee of Yatra Art Fund.

“We are looking at the next level of artists. But, we will buy only those works that have an established re-sale market,” he said.

There are only 3-4 art funds in the country, the most recent one being the Osian’s Art Fund, promoted by auction house Osian’s Connoisseurs of Art Pvt Ltd. Osian’s Art Fund had raised Rs 102 crore in August this year, becoming the largest Asian art fund.

The Yatra-2 fund, which would raise funds through invitation from high networth individuals (HNIs), would also look at select investment opportunities in Chinese art.

Sanjay Kumar, who is also the co-owner of Sakshi Gallery and Synergy Art Foundation, said Yatra-2 will be a four-year close ended fund. In the West, where art funds are very well established, the tenure is higher at 10 years.

Nipun Mehta, co-founder and CEO of Unitis Tower Wealth Advisors Pvt Ltd, which will find the prospective investors for the fund, said the minimum investment amount for the Yatra-2 is pegged at Rs 10 lakh. This is lower compared with its first fund, where the minimum investment by investors was set at Rs 20 lakh.

“We are trying to attract more investors. We are asking HNIs to allocate 2-5 per cent of their investible allocation into art,” Mehta said.

Though the 38 per cent returns given by the first fund in the 12-month period matched the returns in the stock markets, there would be periods in the future when the returns may become more conservative.

“Art as an asset class tend to grow along with the Indian economic growth. There was similar interest for Chinese art (coinciding with the Chinese economic growth),” he said, explaining the current boom.

According to him the organised art auction market in India is estimated at Rs 1,000 crore while the private auction industry would be similar in size if not bigger.