First Art Hedge Fund Calls It Quits

Dec 17 2009 | 10:08am ET

The first art hedge fund has become the latest hedge fund to close its doors.

Artistic Investment Advisers plans to liquidate the £10.2 million Art Trading Fund this month, the Financial Times reports. The two-and-a-half-year-old fund launched to great fanfare in the summer of 2007, boasting advertising kingpin and contemporary art collector Charles Saatchi as an adviser and targeting 30% annual returns. It is unclear whether its strategy of buying middle-market artworks while shorting securities that its managers believed had close correlation with the art market actually produced anything like those returns.

It’s certainly not alone among art hedge funds closing their doors. Fine Art Wealth Management said the number of art hedge funds has dropped by about 60%, from more than 50 to about 20.

A meeting of AIA’s creditors is scheduled for next month.


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