ARIS Title Insurance Corporation, a member of Argo Group International Holdings, announced that investment fund manager, Artemundi Management Limited, has adopted ARIS art title insurance as part of its standard risk management protocol for the Artemundi Global Fund.
ARIS Chairman Lawrence M. Shindell welcomed the decision, noting that ARIS has “been advising the art investment fund community for some time about the fiduciary liability exposures art investment funds face because of art market title risks.”
He described some of those risks as follows:
* Disclosure obligations in investment solicitation materials;
* Irreversible effects of a title loss on performance returns;
* Inability of art funds to exit their investments without exposing the fund and potentially its investors to future risks if the fund does not replace, with third-party title insurance, the warranty of clear title that it will be required to give when it sells a fund asset.
‘The use of title insurance for art investment funds mitigates a seminal risk and will help funds to achieve the greatest value of fund assets,’ Shindell added.
Artemundi Management Limited CEO Javier Lumbreras noted that the group “has successfully invested more than $300 million in the art market over the past 20 years and is one of the top art investment funds in the world.”
He also pointed out that “we know that we cannot eliminate the title risks altogether and that the risk is greater and far more complicated today than it has been in the past and extends beyond matters of stolen art. For that reason, we’ve chosen to take the lead, particularly for the global art investment fund that we manage, to make title insurance part of our regular protocol. Our ability to manage this risk when necessary is good for our investors and demonstrates best-practices in today’s art market.’
The first transaction to fall under Artemundi Management Limited’s new protocol is a major work by Willem de Kooning, which Artemundi Management Limited recently acquired and is featured in the retrospective on the artist at the Museum of Modern Art in New York that opened Sept. 18, 2011.
Source: ARIS Title Insurance Corporation
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