Art Investment Plan
Review of Solo Arte Managed Art Fund For Corporate and Individual Collectors: How to Invest in Irish Art Market: Returns/Profits.
Encyclopedia of Irish and World Art - HOMEPAGE

Investing in Irish Fine Art

The Commercial Value of Art

There's no doubt that over the last few years the growth in the value of Irish art has left many investors pondering the economic benefits of buying a painting, instead of simply spending more on property and shares. True, art investments don't provide dividends, but then neither do shares in Ryanair. Besides, who cares about dividends if the annual appreciation is in double-digits, as it has been for many works of art over the past decade. Indeed, auction prices for some of the top 25 Irish artists have risen over 1,750 per cent in the last 30 years, rising to 2,356 per cent for the most successful.

A Growing Need to Diversify

Furthermore, the recent volatility in share prices, coming on top of the collapse of the property market, has given added weight to the idea of diversifying into new investment areas such as fine art.

However, before you beat a path to the nearest auction or art gallery, one should emphasize that investing in a painting or piece of sculpture is not a guaranteed way of making money. Like many investments, it has its own unique learning curve. In particular, you need to develop an understanding of which artists are most financially promising, and what constitutes a good price for their work. It's fair to say that these issues have, until now, deterred all but the most knowledgable investors from entering the Irish Art market.

Waiting Patiently. Arthur K Maderson.

The Solo Arte Art Investment Fund

Fortunately, thanks to a new managed art fund, designed to cater for both corporate and individual investors, investing in art has suddenly become a lot simpler.

The fund is the brainchild of art dealers Pat and Claire Keegan, owners of Solo Arte, a Waterford gallery noted for its expertise in European as well as Irish paintings and sculptures. The idea of creating a fund specifically for art collectors stemmed from Pat Keegan's 12-year stint as a Bank Manager with TSB, during which he sold a number of paintings to clients who availed of the Wear and Tear Allowance under Section 284 of the 1997 Finance Act. This banking experience, together with his expertise as an art dealer, led him to conclude that there was an opening for a dedicated Art Fund which simplified the whole process of investing in fine art.

Advantages of the Managed Fund

The two main benefits, according to Keegan, are: (1) access to the expertise of the fund manager in acquiring works of art with a solid market value; and (2) the purchasing power of the fund to purchase such works at attractive prices.

The fund focuses on Irish paintings with a proven track record in major auction houses in Ireland and the UK - that is, works by artists who have delivered an average growth of 10 percent a year, such as Arthur K Maderson, Mark O'Neill, Pauline Bewick, Kenneth Webb and Martin Finnan.

[Note: Corporate investors can benefit from the 12.5 percent Wear & Tear Allowance in s.284 of the TCA 1997, which applies to works of art that are used to create a certain ambience in a business premises for the purposes of trade. Both corporate and individual investors in the art fund also benefit from a guaranteed cash rebate, paid after 12 months.]

The Costelloe Jug and Bottles.
Mark O'Neill.

TOP PRICED IRISH ART
For details of auction records
set by artists from Ireland, see:
Most Expensive Irish Paintings

TOP PRICED WORLD ART
For details of the world's most
highly priced works of art, see:
Top 10 Most Expensive Paintings
Top 20 Most Expensive Paintings

IRISH PAINTING
For details of plein-air work,
see: Plein Air Painting Ireland.
For details of realistic works, see
Representational Painting Ireland.
For a review of genre-works,
see: Irish Genre Painters.
For a summary of landscapes,
see: Irish Landscape Artists.
For details of portraiture,
see: Irish Portrait Artists.
For the historical story, see:
History of Irish Art.

IRISH SCULPTURE
For a review of 3-D art,
see: Irish Sculpture.

ART IN IRELAND
For details of exhibitions & shows
in galleries across Ireland, see:
Irish Art Exhibitions.
For latest news & developments,
see: Irish Art News.

How It Works

The fund is open to both companies and individuals. Minimum investment is set at 25,000. Investors take personal possession of the agreed art works, and are advised on insurance and other safety matters.

According to Keegan, investors are offered lots on an artist by artist basis, and may, subject to availability, have a combination of artists' works in their investment portfolio. As to exit strategy, he says that investors are offered free advice on disposal of paintings via established auction houses. In addition, Solo Arte offers investors its own selling service based on profit achieved on the sale, rather than the 'hammer price'.

Estimated Returns

According to Keegan, individual art investors (not registered for VAT) can expect potential gross returns of up to 30 percent over 3 years, and 259 percent over 8 years. Company investors (VAT registered) can expect potential pre-tax returns of 49.5 percent (3 years) and 142 percent (8 years). These figures are based on 7 percent annual growth in value of the paintings acquired.

If this sounds in the least bit optimistic, an annual growth rate of only 4 percent still provides 8-year gross profits of 93 percent (company), and 186 percent (individual).

Take Advice

Solo Arte recommends that all investors wishing to participate in their managed art fund seek independent advice from a tax consultant, and can arrange such a consultation, should this be required.

Our Verdict

This type of art investment plan is certain to be a godsend for any investor who wants to invest in quality paintings by established artists, but who up to now has been deterred by the esoteric image of the art market. And let's face it, an average return of 7 percent in today's economic climate is exceptional value for any investment, never mind the other benefits of the plan. That said, the adverse impact of the current recession on current prices may throw a spanner into the works for a while.

Personally, I think this type of plan is long overdue and I wish Solo Arte every success.

More Details

For more information about the Solo Arte Managed Art Fund, contact:

Solo Arte Ltd
Coolgower, Tramore Road, Waterford.
Telephone: +353 51355758; or +353 861719096
Website: www.soloarte.ie

Review written by Neil Collins MA LLB (Editor) (Sept 2008)

• For details of other painters and sculptors from Ireland, see: Irish Artists.

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