Osian's
Has anyone dealt with Osian's? Buying works? Consigning works? Investing in their art fund? What has your experience been?
Tags: osian's
- Attachments:
-
-
osians.jpg, 3 KB
-
Replies to This Discussion
-
Permalink Reply by Mona Malhotra on
-
I have had no experience with them, but by reading about them and hearing from other artists I have the impression that they are snobbish and are promoting snob appeal.
-
Permalink Reply by IAN Editor on -
OSIAN'S ART FUND MAY YIELD 5%, MUCH BELOW EXPECTATIONS by Anindita Ghose
Source: Livemint
Experts say the basic premise of art funds in a young market such as India is not very solid
New Delhi: With the countdown for the closure of India’s largest art fund having begun, the steep erosion in valuations is causing anxiety to its investors.
Poor valuation: Neville Tuli, OAF’s chief adviser.
Osian’s Art Fund (OAF), valued at nearly Rs100 crore, is due for closure on 10 November as per its redemption schedule. OAF’s chief adviser Neville Tuli says that the capital of unitholders has been preserved despite the market dropping by over 45%. But the rate of return is much lower than what was expected when the fund was set up in July 2006. Investors will now get returns of 5% a year as opposed to 20-22% (after tax), as the fund’s disclosure report had suggested in January 2007.
Set up under the Indian Trusts Act, Osian’s launched its first scheme, Contemporary 1, on 9 July 2006 as a closed-ended scheme with a lock-in period of 36 months, which was open to investors only by private placement. The minimum investment was Rs10 lakh and thereafter in multiples of Rs5 lakh, with a purchase price per unit of Rs100.
The investment services wing of BNP Paribas was one of the chief mobilizers of the fund. Sharad Sharma, country head for private banking at BNP Paribas, says that he would still advise clients to invest in art funds.
Art allows investors such as high networth individuals to distribute their holdings among various asset classes to hedge their risks.
“They are a good avenue for diversification into a new asset class,” says Sharma. “The recession impacted investments across the board and it doesn’t make sense to be put off completely because of this recent debacle.”
However, in the same period (9 July 2006 to 6 November 2009), the Sensex gained 51.23% and gold rose 77.08% on the Multi Commodity Exchange of India Ltd.
Funds with redemption dates already set, such as Osian’s, have to sell at whatever price they get at the time of closure. Funds that are scheduled for closure in late 2010 and 2011 may face a better fate.
Mukesh Panika, director of Religare Arts Initiative Ltd whose fund closes in January 2011, predicts that upheavals in market sentiment will be largely resolved by then and that investors will be able to get a higher rate of return. Panika doesn’t disclose the expected rate of return, but says he’s positive that investors would be appeased.
Arvind Vijaymohan, who heads Indian arts advisory Japa Arts Pvt. Ltd, makes recommendations to clients on their personal art collections. He strongly believes that the basic premise of art funds in a young market such as India is not very solid.
Vijaymohan also attributes the disproportionate rise and subsequent fall of prices in Indian contemporary art to the profusion of art funds in 2006.
“By collectively raising money to the tune of crores, these art funds made a lot of sudden capital available in the market,” he says. “And since proportional quantities of work weren’t available, severely inflated values got attached to what was.”
Ashwin Ramarathinam in Mumbai contributed to this story.
anindita.g@livemint.com
-
Permalink Reply by IAN Editor on
-
Source: Courthouse News
MANHATTAN (CN) - An Indian art dealer says it paid Christie's more than $800,000 for 29 pieces of art, which the auction house failed to deliver and now is threatening to sell to someone else. Osian's Connoisseurs of Art says it had paid in full by May 25, but Christie's is threatening to resell some piece unless Osian's pays "for artworks purchased by another, completely different entity named Bregawn Jersey Ltd."
In its federal claim, Osian's says, "Christie's did not even notify Osian's about the auction. Osian's only learned about the potential auction by monitoring Christie's Web site. Christie's never gave Osian's any notice of the proposed sale."
Osian's wants its art, and punitive damages for breach of contract, false advertising, conversion and deceptive trade. It is represented by Mandel Bhandari.
-
Permalink Reply by saba hasan on -
they bought a few works of mine in 2006,very professional,excellent experience for me
-
Permalink Reply by Saravanan veeraraghavan on -
I consigned a work to one of their auctions. It was a pleasant experience dealing with them.
-
Permalink Reply by IAN Editor on
-
Source: Livemint
Osian’s art fund fails in art of investing
Story by N. Sundaresha Subramanian, Khushboo Narayan and Anindita Ghose
An art fund is like a mutual fund where investors do not pick the individual investment vehicles and instead invest in a pool of artworksMumbai / New Delhi: The Rs100 crore Osian’s Art Fund, India’s first such fund floated by Neville Tuli, promoter of the country’s first art auction house, is struggling to repay investors. Five months after the scheme closed, Tuli and his colleagues are still “trying” to return money, many investors claim. While some of them are yet to receive any payment at all, others have been given around 30% less than their entitlement, according to the net asset value (NAV) declared by the fund.Graphics by Sandeep Bhatnagar / MintNAV is the market value of the units of a fund. An art fund is like a mutual fund where investors do not pick the individual investment vehicles and instead invest in a pool of artworks.Typically, only high net worth individuals invest in such funds. The minimum investment in most art funds is Rs10 lakh.Osian’s-Connoisseurs of Art Pvt. Ltd launched the fund in 2006.It was quickly followed by Edelweiss Capital Ltd’s Yatra Art Fund. Religare Arts Initiative, Copal Art fund, Crayon Capital Art Fund, Kotak India Art Fund and Indian Fine Art Fund are some of other funds that hit the market between 2006 and 2008. According to industry estimates, collectively, these funds raised around Rs300 crore.Art funds started wooing investors after Indian artists started making waves at global auctions.In December 2005, Tyeb Mehta’s Mahishasura went for $1.6 million (Rs7.5 crore today) at a Christie’s auction. In 2008, M.F. Husain’s Battle of Ganga and Jamuna: Mahabharata 12 fetched an identical amount at yet another Christie’s auction. These were widely reported and caught the fancy of investors and art emerged as a new asset class.But the euphoria seems to be on the wane and after the credit crunch that swept the world in 2008, prices collapsed along with other assets such as stocks and commodities.While the stock market has regained a large part of the lost ground, experts say art, being an illiquid asset, will recover with a lag effect.Osian’s launched its first fund, Contemporary 1, on 9 July 2006—a closed-ended scheme with a lock-in period of 36 months. As of July 2006, the total corpus held by the fund was Rs102.40 crore, with 656 unit holders spread across 39 cities in India.Going by the fund’s prospectus, the redemption process was to start from 10 July 2009. The entire process was to be completed by 10 November.Unhappy investorsPankaj Butalia, a retired economics professor and part time film-maker based in New Delhi, invested Rs20 lakh along with his wife in July 2006. They are yet to get their money back. “ABN Amro Bank sold the art fund to us. We had just sold a flat then, and the bank made us invest (in the fund). Now leave alone the fantastic returns they promised, I am not even sure whether we’ll get back the money we had invested.” said Butalia.Butalia claimed his emails to Osian’s have bounced and Tuli has stopped responding to his calls.Deepak Daftari, a Kolkata-based investor who had invested Rs10 lakh in the fund, said “after repeated calls to Osian, I finally received Rs9 lakh a few weeks ago”.He also claimed that the official mail from Osian’s accompanying the payment said it was 90% of the investment. “But if the NAV was Rs112.29 in July when the fund closed, then the full payment should be Rs11.23 lakh and I’ve received around 80%.According to Daftari, there is confusion about payment dates and NAV. “We were told that the NAV for the month of July was Rs112.29, which was declared in October. Now I learn that the NAV has gone down to Rs110. I don’t understand how the NAV can go down since it was closed in July.”He also alleged that NAV for 9 July, the day the fund closed, was not announced till the first week of November as the fund claimed the audit was going on for four months.Tuli, chairman of the firm and chief adviser to the fund, claimed 90% of all the unit holders’ capital has been returned, and the remaining amount will be returned within a few days.“The downturn in the art market made it very difficult to sell all the inventories and realize the dues owed as per original schedule, and so we have been as patient as possible so that the unit holders did not suffer a loss. It has been a very difficult time for all the art market, and for the fund especially as we entered at the top of the market in 2006 and are forced to exit at the bottom of the market,” he said in an email response to Mint’s queries.An ABN Amro Bank spokesman said: “ABN Amro has stringent standards governing its sales processes and client suitability assessments that are in compliance with internal policies and local regulations. We treat all client concerns and complaints seriously and will review and investigate any case thoroughly.”In the first week of November, Tuli had told Mint that the capital of unit holders had been preserved despite the market dropping by more than 45%. But the rate of return was to be 5% a year as opposed to 20-22% (after tax), as the fund’s disclosure report had suggested in January 2007. He had also said payments to all investors were being processed and would be made within a week.In his email to Mint, Tuli said: “The final redemption value will be approximately Rs111.85.” This means on an investment of Rs10 lakh, an investor will get Rs11,18,500.Had Butalia or Daftari invested their Rs10 lakh in gold, it would have fetched them Rs18.81 lakh—a return of 88%. During this time, the Bombay Stock Exchange’s benchmark index Sensex has risen 60.28%, and an investment in bank deposits would have earned a compounded return of around 26%.An official at Osian’s, who identified herself only as Arthi, said on the phone: “There has been a delay. We have started the process last week. We are trying to do it by the end of the month.”An official of BNP Paribas, one of the distributors of the fund, said, speaking on condition of anonymity: “There was some trouble in calculating NAV after deducting the winding up charges, etc. If the market knows that a person is holding certain kind of artwork and he needs to sell it, the prices instantly crash. So he needs to do it in a phased manner.”Liquidity riskAmit Sarup, head, wealth management, Religare Wealth Management Services Ltd, said: “Art is illiquid. But in a market like what we saw six-eight months back, it was difficult to sell anything, be it art, real estate or any other property. Liquidity risk is always there in an art fund. You have to start early. It is not like equity mutual fund that you can sell on day of redemption. You need to plan it over a long period.”Religare did not have any investments in the Osian’s fund.According to Ella Datta, an author and art critic, the market is neither large nor dynamic enough to nurture several art funds but that discerning funds will still manage to succeed.“A good work of art will always have a market. There are two categories of people—the genuine collectors who have been buying art per se and the investors who want to buy and sell art. There aren’t too many belonging to the second category in the market now,” Datta said.Datta is an adviser to Crayon Capital’s art fund, launched in November 2006 with a lock-in period of 36 months.At the time of its launch, the fund had indicated a 30-40 % return to investors. On its website, the fund now claims an NAV of Rs1,101 per unit of Rs1,000 (a return of 10.10%) at the end of its 11th quarter on 30 September.Amit Vadehra, managing partner of the fund, did not respond to repeated emails and phone calls about the fund’s repayment schedule.Yet another fund, Religare Arts Initiative, isn’t disclosing its payment schedule or current NAV. Set up in 2008 with a 36 month lock-in period, the fund is due for closure in January 2011. Sumithra Ravindran, vice-president, Religare Arts Initiative, said the payment schedule and information would be shared only with investors.Unlike mutual funds, art funds are not regulated by the Securities and Exchange Board of India, the capital market regulator, and are not required to make public their NAV.n.subramanian@livemint.com
-
Permalink Reply by IAN Editor on
-
Osian’s mess: Tuli is Teflon-coated by by Anindita Ghose
Source: Livemint Blog
Tuli with his wares (Photo: Abhijit Bhatlekar)
I met Neville Tuli on the morning of 10 November in Osian’s office in Bombay, the day that all payments to investors in Osian’s art fund were to be made. Even that morning he was a model of confidence, insisting that everything was under control.
One month later, some investors allege not to have received any money while some claim to have received about 80 percent of what was due (Read here and here Mint’s news stories that detail this).
Osian’s office seems to be symbolic of Osian’s state itself. It’s at Nariman Point—the right address to connote high net worth and old money, both at once. But inside, paintings lie in disarray, scrambling for place in what looks like a stock room that doubles up as Osian’s Connoisseurs of Art Pvt. Ltd office. It most definitely does not behoove an outfit that launched India’s biggest art fund valued upwards of Rs100 crore. Other than Tuli himself, and two women seated on secretarial desks, there seems to be no other executive staff on the premises. But then Tuli is Osian. And Osian is Tuli. It is a one-man outfit that survived for many years on the man’s charisma alone.
Tuli speaks of values and heritage, morality and economic theories—none of which I’m asking him about. He drops his Gs in a most curious fashion for someone with a sophisticated British intonation, saying “tryin” and “strugglin”. He talks fast; he is angry at the world at large. It is difficult to get a word in edgewise. The man doesn’t let you talk.
He believes he’s an “infrastructure guy”, a messiah who came back to India after studying development theory at Oxford and LSE to change the way we perceive our art and heritage. He wanted to kill the black money system which is why Osian doesn’t operate on cash. And he doesn’t believe in the philanthropic model: Osian works with shareholders and not donations.
Tuli had a 30 year road plan when he started out in the 90s. Because “any decent institution takes 30 years to build”. It’s been more than 10 years now and I ask him why he isn’t anywhere close to what he wanted to achieve. He admits he isn’t and blames the system. He didn’t realize how clogged it would be. He says with self-absorbed ease that his disclosure reports were brilliant and that no one in the world could have done it better. According to him, his only mistake was that he entered the market at the high point and was forced to exit at a low because of the fund structure.
Neville Tuli’s way of dealing with the financial mess that Osian is in reiterating what it could have been. No one has foreseen the market crash, he says several times. He points out that other defaulting art funds haven’t been as widely criticized as Osian’s. And this is true. Osian’s has been the centrepoint of the Great Indian Art Fund Scam. And it is mostly Tuli’s big talk while Osian was being established that highlights its failings now. No other art fund had a man so glamorous at its helm. And no other fund had managed to put together Rs100 crore in the first place. Many disappeared quietly and many are evasive about details. Copal, for instance, had plans for a Rs1000 crore fund but no one knows what happened to it.
Surprisingly, Tuli has been rather easy to access ( investors have a different story to tell). He met me at short notice despite the fact that Mint had done what Tuli called a “pre-mediated” story three days before (He did call all journalists crooks though, particularly those who worked at Mint).
Despite his strong words and the rhetoric he uses to mask the fact that investors have possibly lost money with Osian’s, there is something of an endearing visionary in him. Osian could have been a great big thing, an independent private sector arts body the way it was envisioned to be. But it’s not. Not yet, at least. Visitors to the Osian cinefan festival in Delhi two months ago would know the sorry state the entire outfit seems to be in.
With all the flak he’s received, Tuli says he doesn’t have time to answer detractors. These days, he keeps busy writing his own literature and philosophy. After 18 years of work this will finally be published. Soon, apparently.
When I’m set to leave, he decides to pull a liner: ” In India, you need many Teflon coatings to take it on. And I’ve put on the armour”.
Really, Teflon-coated Tuli is a fascinating man.
-
Permalink Reply by IAN Editor on
-
Pankaj Butalia, someone claiming to be an investor in Osian's Art Fund, sets up a blog to fight for his money.
http://cheatedinvestorosians.blogspot.com/
In an update to the original post, on 11 Dec 2009, Pankaj Butalia posted the following:
Today Tuli sent a mail that the balance capital as well as 'income' would be sent within 8-10 days. May as well wait another 10 days and see ...
Please note that Indian Art News has not verified nor endorses his claims and is merely highlighting this new blog.
-
Permalink Reply by Vipor Chemicals Pvt Ltd on
-
We are also investor in Osian's Art Fund. We invested through ABN AMRO Bank in Baroda. We were getting fund performance reports regularly. We noticed that our value of investment was going down day by day. We finally got a letter from Osians that our money would be returned back with NAV of Rs. 112.29. This letter was received in our office on October 10, 2009. We are yet to receive our money. We have made several email and telephonic reminders, no results. Nobody is replying to our phone calls since last three - four weeks.
-
Permalink Reply by Rama R on
-
Well I think Oscian was the only Indian art fund that was actually transparent about the price etc. They even tied up ET to set up the art index. I appreciate Osians efforst in professionalizing the art market.
I guess it was founded at the wrong time, during the art bubble when the prices where going upwards without any increase in inherent value of the art. There was a lot of speculation driving up the prices. This got them art works that were definitely overpriced and to add to that, the timing of the liquidation of the fund was also at the wrong time - the recession had already set in.
I believe the concept of Art Funds are good if managed properly. Oscian had a lot of bad luck.
Rama
Promoter
Monsoon Canvas
Heres an interesting blog on investing in art - it deals with different art investment options like art funds:
Investing in Indian Art
-
Permalink Reply by natesan's antiqarts on -
I feel Osians has become a punching bag for all. I do agree they might be wrong on several counts. But the picture painted of Tuli is as though he is always wrong on everything. If the art fund actually pays back capital to investors its quite an achievement considering the entry and exit timing. Inspite of all the allegations against him he was an important catalyst for market creation and expansion.
-
Permalink Reply by Sachin on -
http://new.valueresearchonline.com/story/h2_storyview.asp?str=101124
Value Research Online
www.valueresearchonline.com
The Art Fund Fraud
By Dhirendra Kumar | Dec 30, 2009
India’s art fund racket has reached inevitable conclusion. Investors – if investors is the right word – are crying and the so-called art fund managers are either giving excuses, or paying back, to those who are crying the loudest, in dribs and drabs.
However, the investment performance of these particular funds is not the main issue. The main issue is the ease with which investment schemes of dubious legality are able to work their way around our securities laws with thin disguises. According to the law of the land, ‘collective investment schemes’ can only be run by entities specifically permitted to do so. The entities that run any investment fund, as well as the funds themselves, have to conform to some strict rules about how they are run, where they invest, and most importantly, about valuation and liquidity.
Art funds and other ‘alternative’ investments typically work their way around the law by not advertising or openly contacting the general public. This enables them to claim that they are a private activity and investors come in by invitation. They claim that since they are not offered to the public, they don’t qualify as a collective investment scheme under the law. However, this is just a fig leaf. Typically, people read about these funds in the media, get in touch with those running them, and are invited to join. Those who’d bought into the story helped sell it to their friends as well. This is facilitated by a lax definition of what is private activity. Basically, people came to hear of an investment which described itself using the word ‘fund’ and eventually were able to invest in it. But because these so-called funds were not bound to any securities regulations, there was no check on where they invested, at what valuations, from whom they bought their investments, and the veracity and realisability of the valuations they reported to the investors.
This is not primarily about the Rs 200 crore or so that were apparently invested in these particular funds. The real issue is the ease with which fake investment vehicles can get away with a minimum of subterfuge and whether we have a mechanism for preventing such activities. Art funds have had an easier time than other investments that tread the borderline of legality, but that’s mostly because they were gushingly written about by a gullible media and by the general smartness and well-connectedness of the art world. Other than that, this is much the same sort of investment as are tree plantations and gold pyramid schemes.
© 2010 Created by IAN Editor
