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5 alternative asset classes to consider

Investing » 5 Alternative Asset Classes To Consider

Artist: Invest in art and rarities
Artist: Invest in art and rarities © Adriano Castelli/Shutterstock.com

If you have deep pockets, collectibles such as art and rare wines can be great investments. For the merely wealthy, private art funds have been around since about 2000. The British Rail Pension Fund was the first to try out the idea, starting in 1974, according to the Art Fund Association. The new idea these days is public art funds that anyone will be able to buy. They're not available yet, but are in the works by the company Liquid Rarity Exchange, which will license the funds to investment bankers.

"There are several private funds in various rarity sectors, but it's limited. It's limited because the entrance price is $250,000. It could go up to well beyond $1 million and the average investor can't invest," says Michael Saigh, managing partner and CEO at Liquid Rarity Exchange.

That firm developed the architecture and technology to let mutual funds or exchange-traded funds own a collection of art and collectibles. Fund managers can sell shares regularly or add to their positions according to the fund objective and strategy.

"The real key is now there's liquidity where in private funds, there's not. You wouldn't be buying a share of one Picasso. It would be a share of the overall fund with lots of different paintings in it," Saigh says.

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