The Art Portfolio | Investment Mandate

 

This mandate sets out the guidelines, rules, and objectives by which The Good Times House art portfolio should be managed. Serving as a blueprint for the art investment strategy, and its supporting programme of exhibitions and events, this mandate ensures that decision-making surrounding the art programme will align with the overarching goals, risk tolerance, and preferences of the investors and provide value to the Club’s membership base. 

 INVESTMENT OBJECTIVES 

  • Create an art portfolio that inspires, engages and educates the Club’s membership. 
  • Build a curated collection of blue-chip artworks that will stand the test of time. 
  • Endeavour to grow the value of the art portfolio over the term of the investment. 
  • Establish a revenue stream to support the cost of exhibitions and events. 

INVESTMENT STRATEGY 

  • The Good Times House will create a balanced portfolio that includes artworks from different genres, periods and mediums to mitigate the risk of market fluctuations impacting the overall value and liquidity of the collection. 
  • The collection will be centred around blue-chip artworks by established artists, and also include works from emerging artists that offer growth potential. 
  • The Club may also consider other alternative ‘investments of passion’ that offer the potential for growth. 
  • The Good Times House will implement an ethical and socially responsible art investment strategy. 

TIME HORIZON 

  • The portfolio will operate for a target hold period of 10 years with the option to redeem any time after 5 years, or extend beyond 10 years in exceptional circumstances if required, as timing may depend on market conditions. This would be at the discretion of the committee. 
  • Any realisation during the life of the portfolio will be reinvested back into new art. There will be no distributions to members during this period. 
  • At the end of this period the portfolio will be liquidated, at which stage the proceeds will be distributed to the shareholders. 
  • Sales of the collection can also be made to a new collection based on the presiding valuation of the particular art. 
  • The portfolio may take up to one year to liquidate with a view to achieving optimal sale results. 

RISK MANAGEMENT 

Research, Provenance and Expertise 

  • In-depth analysis of market trends, artist markets, recent auction results will be undertaken to inform acquisitions and sales. 
  • Provenance and condition will be important factors in assessing which artworks should be added to the collection. 
  • Outside experts, dealers and advisors will be consulted where necessary. 

Controls and Procedures 

  • An internal committee will be established to vet and approve major acquisitions. 
  • Important additions to the collection will be assessed against key criteria. 

Legal and Regulatory Compliance 

  • The Good Times House will be registered with HMRC as an Art Market Participant and be fully compliant with anti-money laundering regulations. 
  • An internal officer will be appointed to oversee internal AML systems and controls, and, where relevant, receive and review internal disclosures. 
  • Due diligence and KYC checks will be undertaken on all members participating in, and transactions relating to, the art collection. 

Insurance and Physical Care 

  • An independent valuation of the collection will be carried out annually. 
  • The collection will be adequately protected against physical damage and theft at all times. 
  • Artworks in the collection will be regularly condition-checked and kept in secure climate-controlled storage conditions when stored off-site. 
  • Best-practice art handling procedures and health and safety protocols will be adhered to when moving, installing and de-installing artworks. 
  • High quality and archival framing methods will be used for all artworks. 

LIQUIDITY REQUIREMENTS 

Acquisitions and Sales 

  • The collection will include work by well-known and sought-after artists that have a proven track record of demand and appreciation. 
  • An established or growing secondary market will be an important factor when selecting artworks to add to the portfolio.Market trends will be analysed to inform the timing of sales and acquisitions in order to maximise returns. 
  • The Club will build strategic relationships with art advisors, dealers, and auction houses who can facilitate the buying and selling of artworks from the collection. 
  • A long-term view will be taken where necessary to protect against short-term-fluctuations in the market.