Bailout

Don?t invest in art funds

By Felix Salmon

File this one under “you could see that one coming a mile off. The Art Trading Fund, which was doomed before it launched, doomed at launch, and even more doomed a year later, has finally failed: its liquidators are holding a creditors’ meeting in January.  

Art is simply not an asset class which lends itself to hedge-fund strategies. If you’re ever approached by a former financial-markets professional who has bright plans for some kind of an art fund, run, don’t walk, in the opposite direction. The art market will happily take full advantage of cocky newcomers like that: it chews such people up and spits them out for breakfast.

All the same, it’s really quite impressive that this fund managed to go from launch to liquidation in less than 18 months. Even I didn’t think they were that incompetent.

(Thanks to Teri Buhl for the heads-up.)

Full post as published by Macroprudential on December 17, 2009 (boomark / email).