Crayon Cap to float Rs 40 cr art fund

This seems to be the season for the launch of art funds with several players announcing their entry into the Rs 1,000-1,200 crore Indian art market.

Crayon Capital, an asset management company, which has former Indian Ambassador to the US Abid Hussain, film personality Sanjay Khan and industrialist Gautam Thapar on its advisory board, is the latest to enter the field.

The company is launching a Rs 40 crore art fund christened Crayon Capital Art Fund to invest in a well-diversified portfolio of about 50 leading artists and emerging artists, who have demonstrated a history of investor interest in their work.

The launch of the closed-ended fund opens on Wednesday and its first closing date is set for December 15, 2006.

Crayon Capital's announcement comes close on the heels of the proposed launch of the second art fund by Yatra next month (target collection Rs 100 crore) and the recent successful mobilisation of Rs 102 crore by auction house Osian's Connoisseurs of Art.

The fund's art adviser is Ella Datta, a leading art critic and author with over 30 years of experience. The Crayon Capital Art Fund will be funded through private placement and by invitation.

"Indian art has been delivering exceptional returns and because of its low correlation with other asset classes, it's also a powerful way of diversifying an investment portfolio. The Crayon Capital Art Fund presents a world-class and highly transparent investment option for high net-worth individuals in the country to invest in a new and attractive investment opportunity," said Gaurav Karan, partner, Crayon Capital.

The objective is to generate medium to high returns and capital growth from a diversified historically driven portfolio of investment in Indian art," Stressing on the need for transparency to instill confidence in investors, he added, "Our fund will pursue a transparent buying strategy. Details of artworks bought by the fund will be sent to the investor each quarter, including the name of the artist and the image, the size and medium of the work."

Amit Vadehra, partner, Crayon Capital, said, "Indian art has consistently appreciated over the last decade. Economics continues to favour growth, as demand is much higher than supply and promises to remain so. In addition to domestic and NRI interest in Indian art, considerable international interest amongst foreign investors is now beginning to evidence itself. In 2000, Christie's sold $600,000 worth of Indian art, while in September 2006 alone, the same auction house sold $17.8 million worth of Indian art. This demonstrates that the appetite for Indian art has only been growing globally and will continue to grow at a similar pace for at least the next five years."