“Miami is in their own backyard,” said Michael Plummer, principal of ArtVest Partners LLC, a New York investment advisory firm for art collectors. “I have a good friend who lives in Rio (de Janeiro) who makes a point of coming to the fair in Miami, but he would never go to the one in Switzerland, it’s a different mindset.”
“I have tremendous hesitation saying that any firm offering art derivative products can make a go of it. You need a more developed art fund industry before you can even think about art derivatives and you’re not going to get there without institutional support,” says Jeff Rabin.
Artvest Partners, a New York firm that advises wealthy collectors, reckons the [art fund] market is… $1.5 billion to $2 billion as of mid-2012.
An untested company helmed by alittle-known art dealer might have trouble getting traction in the reputation-obsessed art world, advisors suggest. “In theory, it sounds like agood idea. But how can they guarantee the property owner comfort?” asks Jeff Rabin, co-founder of art investment ﬁrm Artvest Partners. “I don’t know what they own or the scope of their guarantees. But if all their clients try to cash in at once, they might be forced to go into bankruptcy and liquidate. And if that happens, what happens to all the people they guaranteed?”