Funds Hub
Money managers under the microscope
Morning line-up
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
EU steered to strict hedge fund rules – Reuters
High fees, or no fees? – WSJ
Hedge fund bear throws in towel – FT
Hedge funds, brokers turn to poker – Sox First
The art of investment
A fund investing in the works of Banksy and Damien Hirst is the sort of thing you might expect to be launched at the height of a bull market, but Castlestone Management has chosen the depths of the current bear market to debut its Collection of Modern Art fund.
The fund, an 8-year investment vehicle with a minimum investment of $10,000 or 10,000 pounds, will buy up art in genres such as impressionist, post-war, contemporary, sculpture, urban art and photography, while its managers will be supported by experts from auction houses, dealers and artists.
Castlestone points to diversification, a lack of correlation with stocks and bonds, and research from Mei and Moses showing strong performance from art since 1875.
The firm backs up its investment case with rather more unusual examples than normally appear in investment literature, such as French financier Andre Level who in 1904 apparently persuaded 12 other investors to contribute 212 francs to a fund called La Peau De L’Ours (The Skin of the Bear), which bought up modern art. Selling the collection in 1914 (which probably proved good timing), he made an annualised return of 14.8 percent.
Any other reasons as to why people should put their money into modern art? Again, another I rarely see in fund literature.
“Right now, the prospects for art prices look excellent,” enthuses Castlestone. “Increasing urbanization around the world has led to a boom in museum construction globally.”
Think the Fund will need a Global Mix of art,with much less concentration on the Western Art Market http://chinaluxculturebiz.wordpress.com/
Saving Hendry? Thanks but no thanks, says Hugh
It was always unlikely that a letter of advice was going to change the mind of maverick hedge fund manager Hugh Hendry.
And in his latest letter to investors, Hendry has smartly rebuffed any attempt to ‘save’ him from his bond investments.
The letter in question – Gregor.us’s monthly note, entitled “Saving Hugh Hendry” – praises the Eclectica co-founder and CIO as a “brilliant and colourful” hedge fund manager who saw the coming storm and took cover well in advance.
But it goes on to argue that the 27-year bull market in government debt, in which Hendry is a big investor, is probably coming to an end:
There are certainly few signs of inflation at the moment. Hendry makes an interesting point that maybe we’ve already had all that inflation that investors are expecting somewhere down the line. But do you think we could be in for the deflationary slump he talks about?
