Chrysalis’ art dabble?
Article Date: Dec 21 2005Revived venture capital trust Chrysalis is considering backing art dealers via innovative financing deals. Chairman Robert Drummond has lined up an expert in the art world to take a stake in ‘up to nine dealers’ using funds raised via a proposed offer of new E shares in Chrysalis.
Each dealer would receive the majority of their backing via a loan to be put in a separate subsidiary specifically set up to trade in art works. The dealer and Chrysalis would share any profit from these dealings.
Drummond, who was previously managing director of Grosvenor Development Capital, argues that this represents a relative safe investment, since artworks rarely drop in value and need little maintenance. In addition he believes that – as art can be traded – investments will count as stock rather than assets. This will enable the trust to get around the VCT tax rules.
Chrysalis wants to raise up to £25 million in the New Year. Investors can choose to invest in the art-related fund, a more conventional D share offer (the money from which will be used to back private businesses) or a combination of both.
