Market USA

Artists’ pension trust starts to sell

Dealers anxious about effects on the market as world’s largest art fund begins to sell its collection of 10,000 works by 2,000 artists

Investors include the mixed-media artist Pedro Vélez

As one of the world’s largest art funds starts to sell its collection, many in the trade are concerned about the effects this may have on the market and on the artists’ careers. Since it launched in 2003, the Artist Pension Trust (APT) has amassed what it says is the biggest collection of contemporary art ever—more than 10,000 works which it estimates to be worth $120m. Last month, “purchase” buttons appeared next to works in its online database.

Unlike other art funds, APT’s investors are artists, who, over a 20-year span, contribute works instead of money. The fund is international and has more than 2,000 members including established names such as Roberto Cuoghi, Liam Gillick and Nir Hod, as well as lesser-known artists. “The average work is between $5,000 to $10,000,” says Brook Hazelton, a former chief executive at Phillips auction house who now advises APT on sales.

Some say the sheer volume of works for sale could flood the market. “People are wondering what impact it will have on other attempts to sell work by those artists privately or at auction,” says the New York dealer Edward Winkleman. “I have tried to stop all of my artists from signing up with APT,” says one Manhattan dealer who asked to remain anonymous. He says the fund takes too large a cut: once a trust sells a work, it gives 40% of the proceeds back to the artist and takes 28% to cover operating costs. The remaining 32% gets distributed among the other participants in that particular trust (the fund comprises nine individual trusts, each with between 250 and 628 artist-members).

The idea is that some artists will be successful, others will not, but all can diversify their risk while saving for retirement. The video and performance artist Kalup Linzy joined APT in 2007 and says that, “because the payoff of the trust seems long-term, I actually don’t dwell on it so much”.

The company’s sales strategy is not fixed: “To maximise returns, one [has] to be flexible and not have very hard rules,” says a company spokeswoman. This is a shift in policy from that detailed in a 2005 APT filing with the Security and Exchange Commission (SEC) which states that a work would be deemed saleable if the artist’s prices plateaued, if they plummeted (by 30% or more in a year), or if they skyrocketed (by 400% to 500% in a year). APT could sell a work if it received a museum offer, or if it determined that an artist “will most likely not become successful” (the artist or the fund can terminate membership at any time). The SEC filing has since been abandoned, the spokeswoman says.

The sales process will be “slow and careful”, says APT’s chairman and co-founder Moti Shniberg. “It’s not going to be any kind of fire sale.” The company recently hired four specialists to liaise with potential buyers, and each transaction must be approved by a five-member advisory committee: former Whitney Museum director David Ross, former Mori Art Museum director David Elliott, adviser Mary Hoeveler, former JP Morgan Chase Collection artistic director Manuel González, and Brook Hazelton.

To avoid paying commissions, APT aims to sell directly to private collectors and institutions, rather than at auction or to galleries. The fund is encouraging institutional relationships by loaning work from its collection virtually free of charge (the borrower must pay for insurance, transportation and a $100 handling fee). “This is particularly helpful for smaller institutions where the exhibition planning doesn’t happen two years in advance,” says Emilia Layden, associate curator at the Haggerty Museum of Art at Marquette University in Milwaukee. She says that it took just two weeks for APT to approve the loan of a sculpture by Kaz Oshiro, Trash Bin #7, 2004, now part of a group show, “Between Critique and Absorption”, at the museum (until 18 May). Some such loans lead to sales. “Curators have come to us and said, ‘I want to add this work to the permanent collection of the museum’,” Shniberg says.

It is unclear how the fund will play out in the long-term but, in the meantime, some artists are enjoying the immediate benefits of their membership. The non-profit APT Institute launched in September, offering free, temporary studios in Leipzig and Brooklyn. The US artist Pedro Vélez, who joined the fund in 2006, is currently in residence in an APT studio in New York as he prepares his contribution to the forthcoming Whitney Biennial (7 March-25 May). “I’ve seen first-hand what happens to artists when they reach a certain age and don’t have a security net. We all lose sleep at night over uncertainty like that,” Vélez says.

How the numbers add up

APT owns 10,000 works of art by 2,000 artists from 75 countries.

$120m: APT’s valuation of its collection

$500m: APT’s projected valuation of its collection in 40 years

2,002: the amount of works added to its collection last year

200: the number of museum shows the fund loaned works to last year

500: the number of museum loans it anticipates this year

8: the number of geographical trusts in New York, Los Angeles, Mexico City, Beijing, Mumbai, Dubai, Berlin and London

628: the membership limit for APT Global One, the most recently launched trust

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