Art Investment Vehicles and the Challenges of the Alternative Investment Fund Manager Directive (AIFMD)

Abstract

As interest in art as an alternative asset class has grown in recent years so has the emergence of art investment vehicles. These vehicles seek to capitalize on the inherent inefficiencies of the art market and provide the potential to identify, create and execute transactions in works of art at highly attractive terms. Art fund managers seek to approach art investment in the same manner as any collective portfolio manager such as UCITSD management companies or AIFMs. Proven techniques and disciplines common to the management of every asset class are employed and modern portfolio theory, sophisticated risk management tools, and quantitative and qualitative analysis forms the basis for investment strategy and process. This paper briefly discusses challenges for art fund managers under the AIFMD.

Keywords: art market, art funds, art fund managers, art investment vehicles, art investments, fine art, family office, managed accounts, UCITS Directive, AIFM Directive

JEL Classification: G24, K20, K22, K23, K33, L82