The artists who invest in themselves
The Artist Pension Trust could provide a nest egg for an uncertain future. If it works…APT member Roger Hiorns with his work Seizure, 2008-09
presto, pennsylvania. Turner prize-winner Richard Wright and nominees Roger Hiorns and Mike Nelson, Britain’s representative at the 2011 Venice Biennale, share a common bond beyond their recent honours—both are participating artists in the Artist Pension Trust (APT).
APT is an art investment fund with a twist—the artists contribute the works themselves, and the trust is structured to provide future income for the artists. Now in its seventh year, it has a global portfolio of 1,100 artists and a collection of more than 4,500 works, which it values at $45m. This year, its lending and exhibition division, APT curatorial services, will mount five exhibitions in Bahrain, Beijing, Berlin, Cairo and at Bard College in upstate New York.
Around 110 individual investors support the fund. Shareholders in APT’s parent company MutualArt, they each gave an eight-year commitment to fund APT’s operations, and have contributed $10m to date.
Since 2004, APT has established eight regional hubs. The first four were launched between 2004 and 2005: the New York hub has 250 artists, and closed in 2009, while Los Angeles, London, and Berlin are expected to close this year with between 200 and 225 artists each. The newer four hubs, Mexico City, Dubai, Beijing and Mumbai, were set up between 2005 and 2007, and are on track to fill their complement of artists, according to APT chief executive Pamela Auchincloss, although, she added: “Dubai and Mumbai will be smaller due to a smaller talent pool and APT’s desire to maintain quality.”
Each hub has a curatorial committee to recruit artistic talent: the committee screens and invites select emerging and mid-career artists to participate, and APT says that around 75% accept the invitation.
The artist selects works for contribution—20 works over 20 years—under certain guidelines; each work must have a minimum market value of $5,000. As the artist’s career progresses, the work is expected to reflect average price levels. Work valuation is decided on the basis of the artist’s current gallery prices. If an artist is unrepresented, APT’s curatorial staff will decide work value. The fund finances the storage, insurance and transportation of the collection at an annual cost of around $525,000.
Once a hub is closed, sales proceeds will be disbursed annually with 40% going direct to the artist, 32% to a pooled account shared by the participating artists in that trust, and 28% returning to the investors. “This represents a very different fee structure from typical funds and is much more akin to that of a dealer-based model,” said Michael Plummer and Jeff Rabin of Artvest Partners. Auchincloss said the investor fee was higher than usual because APT holds the works for a longer period than typical funds and is more involved in the artists’ careers.
Galleries don’t seem to object. “Galleries are understandably protective of their artists but those that understand how APT functions are supportive of their artists’ participation and don’t see it as a conflict,” according to Gagosian’s Kay Pallister.
The payment structure means APT artists can share in the value of other artists’ work as a hedge against the price of their own. While this might be an attractive prospect for an emerging artist, is it so appealing for more established artists? Dan Holdsworth, a member of APT London, said: “I thought the concept was brilliant; an artist lives a fragile existence so to be in a structure where you can build up the value of your work, and have APT keep it safe till they later sell it for a return is fantastic.” In reality, however, APT is an untested novelty and one artist, who did not want to be named, said she was “sceptical” about how the venture will pan out.
Auchincloss said APT does not plan to sell via the auction houses, except in the case of a work with “phenomenal” appreciation.
Critics point out that the first-to-go pieces are by more established artists, at higher values than those in other hubs which pose a greater risk to investors. “While emerging artists need to be supported to ensure a vital and vibrant market, in investment terms it is the riskiest sector of the art market as it is impossible to know which artists are going to hit and have a lasting career,” said Artvest’s Plummer and Rabin. APT will ultimately face the same demand of all art funds—to maximise selling opportunities and produce a return to its investors.
