Shenzhen Artvip Launches China's First Publicly Traded Contemporary Art Portfolio

    Home-grown Chinese art funds catering to the growing number of middle-class Chinese investors who'd like to get involved in the country's art market are making rapid progress.
    Jing DailyAuthor
      Published   in Finance

    Corporation Sells Out Of 1,000 Shares, Netting $354,480, On First Day Of Trading#

    Earlier this summer, Jing Daily looked at the somewhat uneven performance of art funds, noting that many art funds that chose to stock up on Western artists have underperformed, as they've missed out on the rising prices of top artists from emerging markets like China. At that time, we pointed out that home-grown Chinese art funds were likely to appear to fill this gap and cater to the growing number of middle-class Chinese investors who'd like to get involved in the country's art market in some way but don't have the money to purchase individual works themselves.

    Recently, a Shenzhen-based corporation, Shenzhen Artvip Cultural Corporation, took the Chinese art fund idea in a similar but slightly different direction, offering shares in China's first openly traded art portfolio on the Shenzhen Cultural Assets and Equity Exchange (SZCAEE).

    From Artinfo:

    [T]he art portfolio comprises 12 paintings by contemporary artist Yang Peijiang in the form of 1,000 shares, which sold out on the first day of trading, netting $354,480. As the artworks are traded by Artvip, which is managing the 12 works, profits are dispersed to shareholders.

    Established in 2009 by the Chinese government, SZCAEE functions as an alternative platform for the trading of a wide range of cultural assets — including artworks, luxury goods, and films — as part of the Chinese government's attempt to commercialize, diversify, and regulate the public exchange of such cultural properties. SZCAEE plans to offer a second 1000-share portfolio, featuring 40 works by Yang Peijiang, sometime in the future.

    We'd project that this sort of art portfolio will become more common in coming years, but it's important that these portfolios (or larger Chinese art funds) incorporate more of China's established "blue-chip" artists. From what we've seen so far (which, admittedly, isn't much) from Artvip, they seem to have the right idea, but we're interested to see if they'll diversify away from Yang Peijiang and into artists like Zeng Fanzhi or Liu Ye who are currently very popular with mainland Chinese collectors.

    At the moment, it appears that the company doesn't have any plans to offer portfolios that include these million-plus-dollar artists, but that could change depending on the performance of future funds. From the Global Times's coverage of Artvip's portfolio model:

    Although there are no detailed schedules for the issue of more portfolios, Artvip has already prepared several for the future, also featuring calligraphic works and paintings by contemporary artists, such as those from the China Central Academy of Fine Arts and promising artists Li Aiguo and Peng Youshan, [Ye Qiang, Artvip's board chairman] said.

    The division of a portfolio's ownership and profits means that investors can own part of a work and reap profits according to the shares they buy, Ye explained, adding that the benefits include both short and long term gains.

    "Investors of our first artwork portfolio are upbeat about the market and its future," Ye commented. "The buyers who are keen on the artistic value of Yang's works regard the portfolio as a new model in which to invest in his works. They are happy to own even part of a work. For sheer investors, they are also very interested in the model and investing."
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