ARTvest

frequently asked questions

Will pooled funds become an increasingly common phenomenon?

What are the management costs of each syndicate likely to be each year and how are they determined?

How will the purchased work be rotated around the members’ homes?

What happens if a member decides to withdraw from their syndicate before the end of the three year period?

What happens, if a member decides to move to another city or country, during the three year period?

Why haven’t similar schemes been set up in the UK before?

What happens, if work is damaged while in a member’s home?

Why must each syndicate have 15 members before it can start purchasing work?

Why is each syndicate limited to 25 members?

How is the work distributed when the syndicate is wound up?

How are members’ financial interests protected?

Will pooled funds become an increasingly common phenomenon?

ARTvest believes pooled funds or syndicates will become an increasingly common phenomenon in the art world. Prices for contemporary art have risen exponentially in recent years and it is becoming increasingly difficult for novice collectors to buy high quality work at reasonable prices. Moreover, the steady blurring of traditional definitions of what is and isn't art, means that the risks associated with making poor purchasing decisions, have also risen exponentially.

ARTvest strongly believes that the most effective way to tackle these issues is by pooling collectors’ funds and making sure that all purchasing decisions are made in conjunction with a panel of experts.

What are the management costs of each syndicate likely to be each year and how are they determined?

All the running costs of the syndicate are capped at 20% of total funds per annum. This means that 80% of members’ funds will be used to purchase work. Any additional costs must be approved by the executive committee of the syndicate.

How will the purchased work be rotated around the members’ homes?

A random rota will be created for the syndicate. Each piece of work is numbered when it is acquired. In the first year, each member will receive two separate pieces on loan, each piece for a period of three months. In the following two years, each member will receive, on average five different pieces each year, each on loan for a period of three months.

What happens if a member decides to withdraw from the syndicate before the end of the three year period?

In order to maximise the benefits of pooled funds, it is critical that there are always a minimum of 15 members in any one syndicate. It is therefore important that members do not leave their syndicate prematurely, thereby penalising the other members.
Therefore, if a member leaves in year one, they will not be entitled to any compensation or any share in any of the work when the fund is wound up. However, if a member leaves in year two (after paying one of the installments), they will be entitled to one piece of work or the cash equivalent when the fund is wound up.

All members are bound and subject to the terms and conditions set out in ARTvest’s charter document.

What happens, if a member decides to move to another city or country, during the three year period?

If a member decides to move city they can continue to actively participate in the syndicate. They can vote by proxy (e.g. by email) and can arrange for the work to be shipped to them, if they wish. They will, however, be responsible for any additional fees incurred in shipping the work to and from their new homes. If they decide not to loan any work, while they are away, the work will be rotated around the other members’ homes or kept in storage.

What happens, if work is damaged while in a member’s home?

Each member is responsible for the work while it is being shown in their home. All members must have an appropriate insurance policy in place before being allowed to loan work from the syndicate. ARTvest will check all members’ insurance policies cover the syndicate against potential loss and / or damage before any works will be lent out. However, if a member’s insurance company refuses to pay for the loss / damage to a piece of the syndicate’s work while in their possession, the member is required (under the terms of ARTvest’s charter) to indemnify the other members in the syndicate against any loss or damage to work while in their possession.

Why haven’t similar schemes been set up in the UK before?

People are always reluctant to try out new ways of doing things. Previously individual collectors have been able to build their own collections, but with rising prices and the blurring boundaries of what constitutes art, new ways of collecting are required. A number of art investment funds have recently been set up in the UK, but they involve very large amounts of money and individuals are required to invest £50,000 upwards into such schemes. ARTvest is the first project, which allows the ordinary man in the street to build their own collections of contemporary work.

Why is each syndicate limited to 25 members?

In order to avoid heavy financial regulation in the UK each syndicate must have 25 members or less. If a syndicate had more than 25 members it would be regarded as a collective investment scheme under UK legislation and would be subject to heavy regulations and very high additional costs.

Why must each syndicate have a minimum of 15 members before it can start purchasing work?

ARTvest has carefully calculated the annual running costs of each syndicate, including all management and advisory costs. Having 25 members in each syndicate ensures that total syndicate costs can be kept below 20%. If the number of members were to drop below 20, then costs would start to increase disproportionately. 15 members ensure that operating costs are still lower than the comparable costs of buying the same work through the traditional gallery structure.

How is the work distributed when the syndicate is wound up?

The syndicate is structured to ensure that each member can take away at least two pieces of work at the end of the three year period. The winding up process is governed by the Charter Document. Upon winding up, members are requested to rank their top 20 pieces of work in descending order of preference. The work is then distributed randomly according to each member’s expressed preference. So, if for example, you selected Lot 2 as your No. 1 choice, along with 4 other members, there would be a random lottery between you and the other four members to determine who took away Lot 2. This would continue until all the work was distributed. This method of distribution ensures the fairest redistribution of work and avoids the sales costs associated with external auctions or sales.

How are members’ financial interests protected?

The syndicate is committed to ensuring there are appropriate and effective controls safeguarding all members’ funds, as well as the safety and condition of the artwork they invest in.

Strict financial controls and procedures have been put in place to govern ALL transactions and purchases made by the syndicate. Similar controls have been put in place around all purchased art work to ensure that work is adequately maintained and insured during the life of the fund.

No debit / credit cards will be issued on the syndicate’s account to minimize the risk of theft or other fraudulent activity. All cheques will require two signatures from the syndicate’s Executive Committee.

ARTvest Supporting a new generation of collectors and artists