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Historic foundations

The first art fund to have been recorded goes back in 1904 when La Peau de l’Ours was created, initiated by the French art lover André Level. The fund was to last for ten years.
It included twelve members who each invested 250 Francs every year.
What makes this first fund interesting is that they specialised their investment in the then-contemporary art which meantthat the collection accounted for works by Pablo Picasso, Matisse, André Derain, Vincent Van Gogh or Gauguin to mention the most well-known artists.
At the time, modern art did not attract positive comments from the public and the critics, and one may recall that these artists had to exhibit their works at the Salon des Indépendants.
On the 2 March 1914, right before the outbreak of the WorldWar I, the collection was auctioned at Drouot in Paris and made 116,545 Francs, while the initial value of the fund was 27,750 Francs. The sale was a real success and demonstrated to the art market the strong potential of the modern artists.
It is worth mentioning that the members agreed to donate 20% of the total sale to the artists who had been in the collection and one may see this action asthe shadow of Droit de Suite which was to be adopted by the French law six years later.

From this first approach to art and investment, one may be tempted to observe, 100 years later, today’s art market. By that, this paper intends to focus on the past ten years.


The object of my dissertation is to analyse the current attitude toward contemporary art while considering it as aninvestment.
Who we relate to in term of attitude account for two main groups: first, the auction houses, dealers and other bodies involved in the retail of art and inevitably recommend at some point the buyers/investors; the latter constitute our second interest as they exemplify the purchase of the product and are motivated by various matters which we intend to indentify.
We hope toclarify the process followed by each groups: what do the sellers base their judgement and subsequently recommendation on, in terms of ‘good investment’ regarding artists; why those artists; what kind of price range are we talking about.
When presenting the prospective buyers with the sellers ‘intentions’, what is their reaction to the list of artists; do they agree with it; would they beinterested in investing in one – or more – of these artist and why; who would they go to (from the list of the sellers); why would they be attracted to contemporary art in terms of investment and not to another genre such as old masters; what is their intention behind the investment and what do they expect from it; how do they approach the factor of risk; do they take any other element inconsideration during this process.
We will therefore be looking at one aspect of the offer/demand, to speak broadly and use a business angle.

|Sellers |Buyers |
|Auction houses |Investors|
|Dealers (galleries and independents) |Collectors |
|Consultants |Financial people |
| |Corporate collections|
| |Art Funds |


We intend to start this paper by an analysis of the art market so as to carefully frame the object and place the development in its appropriate surroundings. A general fine understanding...