The Art Trading Fund is the first regulated fine art hedge fund.

We are an art trading hedge fund focused on 3 to 12 month returns. The Fund buys and sells art via its global network of dealers, renowned artists, auction houses and galleries. Returns are maximised through geographical price arbitrage and by removing market inefficiencies. The Fund sources art from a bank of vendors and sells through the network’s pool of highly liquid buyers. Using an objective investment process the Fund essentially monetises the substantial margins of a gallery and art dealing business – without the high fixed cost base of either – and passes that ‘alpha’ on to the end investor. The investment managers add additional value through asset allocation and via a synthetic hedge that provides downside protection.

Hey&#8230- speaking of art&#8230- anyone for art business prediction markets??

UPDATE: Rod&#8230-

About a month ago, The Economist wrote an article about this fund: Painting by numbers. In my opinion, the most interesting aspect about investing in art is that nobody really knows what a given work of art is worth. Unlike commodities such as platinum, gold or silver, works or art are highly differentiated assets, and therefore it’s hard to put a price tag on them. Ultimately, the (market) value of a painting or a sculpture is whatever the highest bidder is willing to pay for it.

Whether the hedge fund invests in startups, movies or art pieces, the basic idea is that the profits on the winners should tower the bath they take on the losers.

Previous blog posts by Chris F. Masse:

• The CFTC is going to close the comments in 15 days. We have 15 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges, and counter the evil petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).
• The CFTC is going to close the comments in 16 days. We have 16 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges, and counter the evil petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).
• Brand-new scientific report certifies that starting off the Large Hadron Collider is NOT going to destroy the Earth. Glad to hear that. It means that any bets entertained on the LHC issue will be able to be resolved and winnings to be collected in the end.
• Small Business = GOOD — Big Business = BAD
• The letter David Pennock will never send out —well, we hope.
• Monitor the web traffic of TradeSports.com, InTrade.com, BetFair.com, Betdaq.com, NewsFutures.com, HubDub.com, etc. —thanks to Google Trends.
• Here’s the way to promote innovation for entry-order and analysis software packages —separate the 2 functions.