ABN AMRO announces the creation of an art investment advisory group, which will provide the private banking sector with a wide range of art investment services that can be offered to theirclients.
Working with Seymour Management (Seymour’s), the independent fine art advisors and valuers, ABN AMRO will offer investment advice on the wide variety of art funds available in the market, as well as creating a fund of funds and, over time, its own ABN AMRO art fund. The bank will also provide bespoke advice for those putting together or managing private collections and make available the full range of services to its own private banking clients.
Ariel Salama, global head of private banks at ABN AMRO’s wholesale clients business, will head the group. “High net worth individuals are increasingly looking to their banks for alternative investments such as art,” he said. “However, for private banks to offer a comprehensive portfolio of art investment services requires a significant and ongoing financial commitment. Through ABN AMRO’s Art Investment Advisory group, private banks will be able to offer these services, either on a white-labelled or syndicated basis.”
Art is a maturing asset class; for many years it has been used as an anti-inflationary tool, offering long-term returns that compare favourably with those from equity and bond markets. Since 1950 art has returned between 11.5 and 12.5% on a compound annual basis.
The bear market in equities and increasing uncertainty across global financial markets has led to a renewed focus upon art as a strong medium and even short-term investment. There are now around 20 art funds covering a wide spectrum of fields, with varying structures and degrees of liquidity. Returns are primarily made from the increasing value of the underlying assets held. Spencer Ewen, managing director of Seymour Management, said, “ABN AMRO’s global scale and investment knowledge, combined with Seymour Management’s broad expertise and independence as art advisors will provide a compelling range of services in this exciting, growth area.”
As with all investments, understanding the various complexities involved is vital. Due diligence would typically include considerations such as fund size, the expertise, reputation and access to the market of managers, the types and values of purchases, investment horizon and exit strategies. Salama explained, “The importance of independence as well as expertise in the art market is crucial. Seymour’s has a well-established reputation for providing impartial and objective advice and, with no links to dealerships or auction houses, makes an ideal partner for ABN AMRO in this area.”
Part of the Bank’s Financial Institutions and Public Sector (FIPS) coverage group, ABN AMRO’s private banks team was created in September 2003 to provide a comprehensive range of products and services to private banks, including financial structures, equity and equity-related products. The group is already working with more than 80 clients globally.
ABN AMRO’s FIPS coverage group provides an integrated wholesale banking product platform across Corporate Finance, Equities, Financial Markets and Working Capital, focused on banks, public sector, insurance, asset manager, hedge fund, central bank and financial sponsor clients.