1. 16_facts_neu_RZ 02.04.2008 14:48 Uhr Seite 16
NEWS | STATEMENTS
E m e rg i n g M a r k e ts i n F o c u s
The search for the right recipe for an art fund continues. Two former employees of the auction house Phillips de Pury &
Company, Andrew Littlejohn and Pamela Johnson, seem certain to have found the solution. With their company, Meridian, they
have set out in search of investors and aim to have 25 million dollars ready to invest in contemporary art by the end of June.
The minimum stake is 250,000 dollars.
Interview UTE KREPLER
Andrew F. Littlejohn
ARTINVESTOR: Mr. Littlejohn, what art entirety of their capital in a British Virgin ed.], who embezzled money from company
will you be investing in with your fund? Islands Limited Partnership which, effectively, investors. Many Western investors are quite
Andrew F. Littlejohn: The focus of our is the Fund. Given the financial partnerships interested in the investment opportunities
investments will be on contemporary art from we have in Asia and the Middle East, we are associated with art—at least this is the re-
emerging art markets throughout the world. seeing many of our early investors coming action we have gotten—especially given the
These markets include, but are not limited to, from these regions. This being said, we present volatility of the global equity markets
countries in Africa, the Middle East, Asia, believe potential investors from each of and economy in general. Art is historically
Latin America, as well as India, Russia, and the emerging art market regions will find our non-correlated with the global equity mar-
Eastern Europe. We also will allocate a small investment strategy particularly interesting. kets and has hard-asset backing. The residual
portion of our portfolio to contemporary art value of high-quality, well-selected art is
from established Western markets. Are investors in Asia and the Middle East effectively certain. There is very little down-
more willing to take risks regarding alter- side risk and quite a bit of upside potential.
Can you give some examples? native investment strategies? We are fairly confident our model can gener-
Artists we find interesting at the present time Based on early investor reactions, we have ate internal returns of 20–30% per annum.
are Yinka Shonibare, Malick Sidibe, Yto Barra- found that, yes, investors from Asia and the We have put together a team whose com-
da, Ahmed Moustafa, Farhad Moshiri, AES + Middle East in particular have expressed bined expertise is uncoupled in this nascent
F Group, Komar and Melamid, Ilya Kabokov, strong interest in our Fund. I am not sure this market.
Carlos Amorales, Gabriel Orozco, Ling Jian, is a matter of them willing to take more risk.
Zhang Lin Hai, Cao Fei, Kim Dong-Yoo, Bae Rather, in many cases, it is a matter of relative Will it be possible to follow the fund’s
Bien-U, Subodh Gupta, Atul Dodiya, George wealth. The investors we have encountered in performance?
Condo, Alice Neel, John Chamberlain, and these regions have a long-standing record With an art fund, it is impossible to mark-to-
Jo Baer. of participating in alternative investments. market and to publish quarterly returns.
We will be holding assets for a longer term,
Why are you focusing on investors in Asia Do you think Western investors have lost between 3 to 7 years. We will provide fund
and Middle East? confidence in such funds following the investors with annual reports based on third-
In an earlier interview I was somewhat mis- collapse of earlier projects? party appraisals.
quoted. We actually do not target investors in I think this generalization is incorrect. The
these regions specifically. Our fund is open to few funds that collapsed did so because they Have you already found a bank to join the
sophisticated investors worldwide through were improperly structured. In the case of fund and distribute it?
two entities: a Delaware Limited Partnership one prominent US-based fund company that There are several private banks and boutique
for US-based investors and a British Virgin collapsed [Fernwood Art Investments, ed.], wealth managers with whom we are working. ‡
Islands Limited Company for non-US-based their failure was based solely on the impro-
investors. Both of these entities invest the prieties of their Chief Executive [Bruce Taub,
16

2. Bloomberg Printer-Friendly Page Page 1 of 2
Art Funds Expand in Middle East, Asia as Hedge Against Slowdown
By Scott Reyburn
March 20 (Bloomberg) -- Art investment funds are expanding in emerging markets such as the Middle
East, India and Asia in an attempt to weather an economic slowdown.
New funds are being set up outside the U.S. and Europe with the dollar this month at its weakest since
the euro's debut in 1999 and U.S. stocks touching their lowest level since 2006. About 60 percent of
contemporary-art lots failed to achieve expected prices in London sales last month, research company
ArtTactic said. Traders at the Tefaf art fair in Maastricht, Netherlands, said demand fell from U.S.
buyers.
``We see the Middle East as the next major market to take off,'' said Andrew Littlejohn, of New York-
based Meridian Art Partners LLC. He is starting a fund ``also focused on contemporary art in India,
Asia, Russia and Africa.'' The Fine Art Fund, based in London and started in 2004, is investing in Chinese
and Indian works too.
Over the last five years, managers of art investment funds, which buy and sell a pool of works for a set
management fee and a share of any profit made, have been keen to promote art as an alternative asset
class. So far, the Fine Art Fund, started in 2004, is the only one of these vehicles that has remained
conspicuously active in the West.
Collectors of western contemporary art have been buying selectively after an 11-year period of price
appreciation ranging from 2.5 times to as much as five times, according to index-maker Art Market
Research.
``New markets have the best opportunities and we want to offer them to sophisticated investors,'' said
Littlejohn, a former Phillips de Pury manager who worked in New York, London and Asia.
Chinese Art
More than 10 billionaires are among those to have invested up to $110 million in the Fine Art Fund, its
chief executive Philip Hoffman said. In 2006, he launched a Chinese Fine Art Fund with an initial target
size of $10 million.
``We stopped buying Chinese contemporary art for that fund nine months ago,'' said Hoffman, a trained
accountant who formerly worked for Christie's International. ``We're now looking at other areas. I've
just bought a piece of 18th-century Chinese Imperial porcelain for $1.5 million.''
This January, he opened an Indian fund, projected at $25 million. He said the fund was registered in
Delaware, so it wouldn't be affected by the Security and Exchange Board of India's recently issued
guidelines on art funds.
``The Middle East has a big potential upside, but I'm nervous about it,'' said Hoffman. ``We don't like
to enter a speculator's market. That's why we never buy Damien Hirst.'' He plans a Middle Eastern
fund that he hopes will attract investment of $10 million.
Brothers in Art
London dealer Serge Tiroche, a former Citigroup banker, said in a telephone interview that he and his
brother Micky plan to start a fund called ArtPlus, specializing in Impressionist, modern and
http://www.bloomberg.com/apps/news?pid=20670001&refer=&sid=aJcz9abdNwFQ 3/27/2008

3. Bloomberg Printer-Friendly Page Page 2 of 2
contemporary art, in the second quarter of 2008.
ArtPlus aims to raise $100 million to $200 million in the form of shares and will hold ``blue-chip'' works
and engage in short-term trading and ``art finance,'' its prospectus said.
``This is a good time to start an art fund,'' said Tiroche. ``I believe in the next two years things will
slow down and there will be opportunities to buy collections and distressed portfolios.''
Some established collectors remain skeptical about art funds' ability to make profits for their investors.
``I'd rather be my own fund manager,'' said New York-based collector Howard Farber, who last October
sold 45 works from his collection of Chinese contemporary art at Phillips de Pury, London, for 10.1
million pounds ($20 million) with fees, double the upper estimate.
`Buy Some Books'
``All you have to do is follow some auctions and buy some books,'' Farber said. ``It's so much more
rewarding.''
In 2005, art funds started by ABN Amro Holding NV and Boston-based Fernwood Art Investments --
the latter with a target value of $100 million -- were both closed after failing to attract enough
investment.
Societe Generale SA's Olivier Maman said in a telephone interview that the French bank had planned
an art fund aimed to draw an initial investment of 25 million euros ($39 million). Maman, the fund's
managing director, said that an institutional investor, who he wouldn't name, later pulled out. SocGen
has been stung by a record 4.9 billion-euro trading loss.
``It's still possible the fund might be launched, but the scale will be smaller,'' Maman said.
(Scott Reyburn writes about the art market for Bloomberg News. Any opinions expressed are his own.)
To contact the reporter on this story: Scott Reyburn in London at sreyburn@hotmail.com.
Last Updated: March 20, 2008 00:50 EDT
Terms of Service | Privacy Policy | Trademarks
http://www.bloomberg.com/apps/news?pid=20670001&refer=&sid=aJcz9abdNwFQ 3/27/2008

4. MONEY MATTERS
Lessons from a trip
down memory lane
THE BUSINESS TIMES Wednesday, April 30, 2008 Page 33 34
An ‘art attack’ on wealthy Asians
Art funds pool investors’ money to put into works expected to appreciate significantly over
time. GENEVIEVE CUA learns that emerging markets may just be ready for this new tack
A
SIA’S wealthy now
have a new invest-
ment option to con-
sider – one that
boasts beauty and an
appreciation poten-
tial that could well ex-
ceed the broad equity
market.
Art investment funds are a rarity
in Asia, but Meridien Art Partners
managing partner Andrew Littlejohn
is in Singapore to interest clients in
the firm’s new Emerging Art Markets
Fund.
Later this year, the more estab-
lished group behind UK-based The
Fine Art Fund may also head to Singa-
pore and Hong Kong to market a
number of funds investing in the art
markets of China, India and the Mid-
dle East.
Art funds pool investors’ money to
invest in works which are expected to
appreciate significantly over time.
The funds offer diversification – your
US$1 million could be invested in 50
art pieces, for instance, instead of just
one. Another benefit will be the val-
ue-add that the managers are expect-
ed to bring, which includes a commit-
tee of experts to select art pieces, and FILE PHOTOS
exhibition and art gallery showings of Growing allure: Meridien’s Emerging Art Markets Fund aims to invest in contemporary art, sourcing artworks
the works to enhance their perceived from places like Vietnam (above), Indonesia (right), elsewhere in South-east Asia, Russia and the Middle East
value particularly among collectors in
the developed markets. were set up in 2004. About US$100 “My view is there are opportuni- and that’s really where the value is Meridien’s annual return target,
The holding period is typically million is invested in the funds. ties, depending on the sector. In an- created. says Mr Littlejohn, is a “modest” 30
about 5-7 years, with little liquidity in The firm has since set up four oth- tiques, the typical upside is perhaps “Some might say that the volatility per cent. The fund has a five-year life,
between. er funds to invest in Chinese, Indian, 50 to 100 per cent over 2-3 years. In in markets has caused some to pull with an option to extend for two more
Meridien’s Emerging Art Markets Middle Eastern, and Portuguese and contemporary art, it’s 3-10 times for back. But it’s quite the opposite. The years. It may make distributions after
Fund aims to invest in contemporary Spanish art. For these, he anticipates certain artists. Plenty have gone from savvy investors are interested in di- the third year. It charges an annual
raising another US$100 million. US$20,000 to US$500,000 in the last versifying their portfolios and looking management fee of 2 per cent, and a
art, scouring the markets of South-
While there are no Asian investors five years. Picking the right piece is to get out of equities and moving into performance fee of 20 per cent at the
east Asia, Vietnam, Russia and the
key.” alternatives. We’re definitely seeing end of the fund’s life, for any excess
Middle East, among others. Mr Little- in the firm’s first funds investing in
more interest from Asia and the Mid- return above a hurdle rate of 6 per
john says: “The emerging markets Impressionist masters, that may soon In terms of marketing to Asian cli-
dle East.” cent.
are where we think the opportunities change with the new funds. The firm ents, it helps too that the pool of
Meridien’s partner in Singapore is The Fine Art Fund’s fee structure
lie in the long term.” He hopes to has been approached by some private wealth is growing rapidly. In the last is broadly similar, but there is no hur-
Calamander Capital, founded by
raise US$25 million by the first clos- banks to renew marketing efforts in year or two, buyers from Asia and the dle rate for the performance fee.
former Boston Consulting Group di-
ing of the fund in June. The target as- Singapore and Hong Kong. Middle East are beginning to make
rector Roman Scott. Mr Scott says
set size is about US$100 million. Mr Hoffman said the group seeks waves in art auctions.
there is interest among the ultra high
A small number of art funds at- “quality” pieces of art. “We just Mr Littlejohn says: “As emerging net worth clients, although the mar-
tempted to get off the ground some bought important ceramic vases from economies grow, the idea is that cul- ket is very niche.
years ago but almost the only one to the 18th century from the Imperial Dy- ture follows money. Once the wealthy “Investment in real assets like art Mr Littlejohn: As
report success is The Fine Art Fund. nasty in China. The contemporary art have exhausted their interest in jets, is inflation-proof, and they offer emerging economies
Philip Hoffman, chief executive of we buy is typically in the range of second homes and other luxury much higher appreciation against the grow, the idea is that
Fine Art Management Services, said US$100,000 up to US$1-2 million per items, they turn to art. With that, they trade-off of illiquidity. More sophisti- culture follows money.
the firm’s flagship funds which invest piece. create a regional market to promote cated investors are prepared to make Once the wealthy have
in Old Masters, Impressionist, Mod- “For Indian art, we may pay art into the broader international that trade-off for serious alpha.” exhausted their interest
ern and Western contemporary art, US$10,000 to US$20,000 or between scene. We see these works getting He adds: “We find rich Asian indi- in jets, second homes
have achieve an annualised return of US$300,000 and US$500,000 per back into the Western market, in gal- viduals are not as art-oriented as and other luxury items,
a stunning 50 per cent since they work. leries in London, New York and Paris, Westerners, but they are developing.” they turn to art
Morningstar names 12 top funds Winners all
Fund Awards 2007 Singapore
Home-grown asset named in the global equity We have a certain process year . . . The volatility of consistency is to keep
FIXED INCOME CATEGORIES
category, for instance. UOB and discipline and we stick the fund was lower than its re-evaluating one’s posi-
managers among United Regional Growth by it. We examine valua- peers because of our focus tions. “Over the long term, Dollar bond Pimco GIS Total Return Bond Fund
the winners fund was named as the best tions and invest in things on quality and a long term there will be times when Non dollar bond M&G Corporate Bond Fund
in the Asia-Pacific with Ja- we know well and under- investment horizon.” the strategy looks incorrect High yield bond AllianceBernstein – Global High Yield Portfolio
By GENEVIEVE CUA pan sector, and Lion Capi- stand, and seek to identify On what’s ahead, he and you have to be pre- Emerging markets bond Templeton Emerging Markets Bond Fund
JUST 12 funds were yester- tal Singapore/Malaysia certain trends early.” The said: “The market is proba- pared to revise it.” Asia bond AIG International Funds – Singapore Bond Fund
day named as the best in Fund in the Asean equity fund invested in Singapore bly going to remain uncer- In the current
their respective categories, category. and Malaysian property tain. Compared with a year year-to-date, the Global Op- EQUITY CATEGORIES
a marked departure from Fund managers contact- firms early, and also in com- or three years ago, it’s a lot portunities Fund has suf- Global equity DBS Shenton Global Opportunities Fund
the typical fund awards ed by Executive Money said modities. more difficult to find con- fered along with the correc- North America equity Schroder ISF – US Smaller Companies
which see numerous win- that a strong investment “We’re optimistic for Sin- vincing ideas.” tion in China shares. While Europe equity Franklin Mutual European Fund
ners recognised for varying process helped ensure con- gapore . . . Fundamentals He said that investors the fund can invest in fixed
Emerging markets equity Fidelity Funds – Emerging Markets Fund
performance periods. sistency. Going forward, continue to be quite good, should tone down their ex- income, it has no allocation
In its first fund awards, however, they expect the in- valuations quite attractive. pectations, as returns of the at the moment as equities Asia-Pacific with Japan equity UOB United Regional Growth Fund
in recognition of perform- vestment backdrop to re- We’re still a bit nervous last three to five years were are still expected to outper- Asia-Pacific ex Japan ex Asean equity First State Regional China Fund
ance for 2007 and past main difficult. about the external outlook, “abnormal”. “When one form bonds. Asean equity Lion Capital Singapore/Malaysia Fund
years, Morningstar said Daniel Chan, chief execu- and the downturn may still looks to choose stocks, one In an explanation of its Source: Morningstar Research
that the objective is to recog- tive of Lion Capital, said have some way to go,” he should look for something awards methodology, Morn-
nise the funds and fund that part of the said. steady, defensive and with ingstar said that it is appro-
groups that have added the Singapore/Malaysia Fund’s The First State Regional a high yield, and focus on priate to emphasise a awards to funds that have steer them to offerings that tive review, which includes
most value over one year outperformance can be at- China Fund was named in capital preservation,” he fund’s one-year perform- posted strong one-year re- may not be good longer the question of whether or
and for longer periods. tributed to investments the Asia-Pacific ex-Japan added. ance. But the funds must al- turn, but have otherwise term investments.” not the fundamental risks
Among the winners was made in the midst of Sars in ex-Asean Equity category. On DBS Shenton Global so have delivered strong not delivered good results In terms of funds’ return in a fund are too high to
a good sprinkling of 2003. “If you invested close First State Investments’ Opportunties Fund, senior three and five-year risk ad- for investors. We also recog- and risk scores, weightings merit an award, and wheth-
home-grown asset manag- to the trough and had the Martin Lau said: “We’ve portfolio manager and equi- justed returns to merit an nise that investors often are given for one year, and er a fund is deemed to have
ers. The DBS Shenton Glo- courage to buy when prices outperformed our bench- ty strategist Peter Chiang award. “We do not wish to use awards as a ‘buy’ sig- three and five-year num- deviated from its stated
bal Opportunities Fund was were very depressed . . . mark by quite a bit every said that part of the key to be in the position of giving nal, and we do not wish to bers. There is also a qualita- mandate.
Published and printed by Singapore Press Holdings Limited. Co. Regn. No. 198402868E. A member of MCS Circulation Audit. Customer Service (Circulation): 6388-3838, circs@sph.com.sg, Fax 6746-1925.

5. The Art Newspaper: LONDON. As confidence in the art market begins to wane amid gro... Page 1 of 1
Close
Can you trade your way through a recession?
Two new companies think you can and hope to inject $300m into the market
By Melanie Gerlis | From Art Market | Posted: 17.4.08
LONDON. As confidence in the art market begins to wane amid growing fears of an economic downturn, two new
companies have launched to buy art as an investment vehicle. An art trading company based in Luxembourg,
ArtPlus, is seeking investors, while the art fund Meridian is now open for investment.
ArtPlus, founded by brothers Micky and Serge Tiroche, believes that “long term fundamentals have never been better
for the art market”, citing unprecedented rates of wealth creation, increasing globalisation and transparency. The
founders are now looking for outside investors to help raise $200m to develop their family art trading business, in
which they hope to issue shares in three to five years.
Micky Tiroche, who runs a lesser known gallery in north London, is primary adviser to the art trading company
Thomas Holdings. He also co-founded Israel’s Tiroche Auction House, whose notable auctions include the sale of
part of the estate of the late Baroness Batsheva de Rothschild in 2000.
On behalf of Thomas Holdings, he sold several works in the June 2007 auctions in London, including Jean-Michel
Basquiat’s Grillo, 1984, which had been purchased from Sotheby’s New York in May 1999 for $1.1m. He consigned it
to Phillips de Pury where it sold for £4.4m ($9.9m). His brother has been a banker at Citigroup for the past ten years.
Both bought several works at Phillips’ contemporary art auction on 28 February, where their purchases included
Magic Wands-5, 2004-5, by Indian artist Subodh Gupta for £102,500 ($203,000; est £50,000-£70,000); Wilhelm
Sasnal’s oil painting Man at the Control Panel, 1999, for £58,100, ($115,000; est £50,000-£70,000) and Zhang
Huan’s C-print My Boston II, 2005 for £16,100 ($32,000, est £6,000-£8,000, above).
Meridian Art Partners has launched a more traditional art fund, which is to invest in emerging art markets (primarily
Asia, Russia and the Middle East). The New York-based company has been founded by Andrew Littlejohn and
Pamela Johnson, both previously at Phillips de Pury in New York, and aims to raise $100m by the end of the year.
The minimum investment in the fund is $250,000. It is targeting emerging markets because, according to Mr
Littlejohn, “culture follows money”. He thinks that now is a good time to invest locally in markets, despite believing
there will be “an overall correction” of prices on a global scale, and says that “this is an opportunity to buy cheaply”.
The fund’s chief investment strategist is Jeremy Eckstein, a statistician who advised on the British Rail Pension Fund
investment when at Sotheby’s. Other advisors include Pierre Valentin, head of the cultural assets group at Withers
law firm; Janet Oh, founder of the eponymous Seoul gallery; Iain Robertson, head of Art Business at Sotheby’s
Institute of Art; and New York dealer Amy Smith-Stewart who is on Meridian’s investment committee.
Several art funds have been launched in the past ten years as the market began its current boom, but very few have
survived. Philip Hoffman’s Fine Art Fund claims it has produced a 15% average return since it began investing in
2004. However, this cannot be independently confirmed.
©2008 The Art Newspaper
Close
http://www.theartnewspaper.com/includes/common/print.asp?id=7803 4/22/2008