Art Pension Scheme

A Synopsis  |  African Artists Pension Fund

Here is an Investment Programme that could be developed by a Bank or an Commercial Corporation for African Artists.

The African Artist Pension Fund (AAPF) is an investment program dedicated to the needs of emerging and mid-career artists from Africa. The African Pension Fund is linked with the Investment Bankers, whose long-term financial planning services will allow the artists from Africa to invest their artworks alongside a community of select African artists, thereby providing a uniquely diversified, alternative income stream.

The vision will be realised with the assistance of Virgin, to build an integrated financial services firm that caters to the financial needs of the African artists. The collateralisation of artworks is the basis for a range of financing products.

 Benefits of Creating a Pension Fund

AAPF provides each participating artist with distinct benefits:

- The opportunity to realize long-term appreciation of his/her artworks over a period of at least 20 years

- The opportunity to share in the commercial success of other carefully selected artists

- High standards of professional care for their invested artwork

- Facilitating the loan of artworks for selected exhibitions worldwide

How It Works

AAPF is a long-term Investment Planning program. Rather than cash, participants invest works of art, accumulating 20 artworks over a 20-year period. Ideally, the 20 works by each artist should comprise a representative collection of that artist’s production over that period of time. Most importantly, the artist remains the sole owner of his/her artworks until the work is sold.

A region-specific Curatorial Committee comprised of individuals who are highly experienced and regarded in the field of contemporary art review and select artists for participation in the programme.

Following the invitation to participate in the programme, the artist and AAPF signs the Artist Participation Agreement. Within the first 6 months and annually thereafter, the artist is required to propose artworks for consideration by the AAPF Director. AAPF will carefully store these artworks until the time at which each work is sold. During this holding period works are made available for exhibition at museums, galleries and other pre-approved venues.

When artworks are sold, each artist receives forty percent (40) of the net proceeds of the sale of his/her work. Thirty-two (32) percent of net proceeds accrue to the collective benefit of all participating artists in the specific AAPF. This allows each participating artist to collectively participate in the commercial success of the other selected artists. The remaining twenty-eight (28) percent of the net proceeds are retained by AAPF to cover all management and operating costs.

Distribution and Sale

The artist remains the sole owner of his/her artworks until AAPF decides to sell the work.

Artists are expected to invest artworks according to the following schedule: two works a year for the first five years; one work a year for the following five years, and one work every two years for the remaining ten years; for a total of twenty works.

Upon acceptance of a work, AAPF will issue to each artist an Acceptance Receipt representing the right to forty (40) percent of the net proceeds derived from such artwork and a Participating Interest represented by Pool Units. The Pool Units represent the right to a pro rata interest along with the other artists in the thirty-two (32) percent of the net proceeds from any sale of artworks.

Accepted Artwork

Number of

Pool Units 

  

Accepted Artwork 

Number of

Pool Units 

First

1

  

Eleventh

6

Second

1

  

Twelfth

6

Third

2

Thirteenth

6

Fourth

2

Fourteenth

6

Fifth

3

Fifteenth

6

Sixth

3

Sixteenth

8

Seventh

4

Seventeenth

8

Eight

4

Eighteenth

8

Ninth

5

Nineteenth

8

Tenth

5

Twentieth

8

Maximum for Each Artist 100

The sale of artworks will be carefully managed by an independent selling committee in order to maximize the monetary value from each sale and to ensure that the sale is in the best long-term interest of the artist. The circumstances of a sale will be carefully considered to avoid any adverse market impact.

Whenever possible, AAPF will work with each artist's primary gallery when offering the works for sale. AAPF will also sell the works through the selective use of private treaty sales, auctions and secondary market dealers when appropriate.

AAPF is designed to work in tandem with the existing art market structure and dynamics. Its success will be driven by a confluence of interests among the participating artists, dealers and the AAPF management to generate maximum returns.

What Is Needed

Curatorial Committee

We need to create a world-class team of art professionals each with significant experience in identifying and supporting the careers of emerging and mid-career African artists to ensure the quality of the artists selected to participate in the African Artist Pension Fund.

Curatorial Services / AAPF Lending Program

Curatorial Services and a Lending program means that AAPF will be able to offer curators, museums and other art exhibition programs full access to the extensive artwork collection by the Fund artists. Whilst the artwork on deposit with AAPF, all of the artworks in the storage facilities should be made available to art professionals for viewing, academic scholarship and curatorial projects.

Management and Advisors

African Artist Pension Fund (AAPF) will be the first and only investment planning product, dedicated and tailored to the needs of emerging and mid-career African artists. AAPF should be unique, as it will allow participating African artists to invest in their own commercial future as well as that of other selected artists.

Executive Management

What is needed is to create a strong foundation by appointing an Executive Management Team:

• CEO & President
• Chairman AAPF Curatorial Committee
• Managing Director, African Operations
• Managing Director, International Operations

The Advisory Board

The Advisory Board of African Artist Pension Fund should comprise of leading professionals from the worlds of finance and art, including leading artists. They should be drawn together to provide continuous access to multiple perspectives and a broad range of expertise to ensure the long-term success of AAPF.

Board Directors

AAPF will have to assemble an extremely experienced Board of Directors that supervises the activities and direction of the Company. The corporate governance practices should meet the highest standards to ensure transparency, independence and sustainability.

The African Artists

African Artist Pension Fund will invite artists to apply in order to be considered for participation in pension scheme. Participating artists will be chosen by the AAPF Curatorial Committee. The members need to be deeply experienced in identifying emerging and mid-career artists. The Curatorial Committee retains final control over the inclusion of all applicants.