Art collectibles hero image of royal hall with embellished ceiling and black and white filter

Art Fund or collectibles

In the current globalised art world, many professional investors and advisors have decided to use their expertise to attract third-party investors and set-up their own art fund in Luxembourg.

Many types of strategies are eligible:

The classic “buy and hold” strategies where the manager buys some pieces of art and keeps them long term.
Some are involved in the trading which includes more frequent trades in the market or art guarantee, or just investing in companies servicing the art world like insurance brokerage, transportation of artworks, custody, freeport, events, and art collection museums, etc
Many strategies have been extended to classic cars,
Jewelry,
Fine wines, champagne
Diamonds,
Old watches
And more recently whiskeys

Why do collectible fund managers want to create their Fund as an SLP in Luxembourg?

The use of the Special Limited Partnership is particularly advantageous thanks to its flexible legal and tax environment, with key benefits for art strategies being:

No limitation in the type of artworks or art strategies (driven, bulk, distressed, showcasing, etc.) the manager chooses to invest in
No risk spreading rule to observe – which means that the whole NAV of the art fund can be invested in one type of artwork
Use of derivatives or leverage is possible (with limitations)
The valuer, experts, broker(s) can be appointed anywhere in the world
No need for a depository bank

And more generally:

The fund remains an unregulated fund
No minimum capital
Unlimited number of investors
External auditor is not mandatory
The identity of the investors is not public.
Full tax transparency – no withholding tax upon distribution of the dividends or profit

The Special Limited Partnership is a vehicle that can be used to set-up as an art fund easily within a short timeframe (1-2 weeks).

Get in touch with our Fund team to
discuss your investment fund project

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