The APT Model
Artist Pension Trust® (APT) offers both long-term financial security and international exposure to select artists around the world based on a unique tailor-made financial model.
APT has the largest global collection of contemporary art, comprising nearly 13,000 artworks from 2,000 select artists in 75 different countries. With additional commitments totaling 40,000 artworks, the collection is growing by more than 2,000 each year, as artworks are deposited by artists chosen by APT’s distinguished international Curatorial Team.
APT started with eight regional trusts almost a decade ago and, following their success, has recently launched its first global trust, APT Global One, with a capacity of 628 artists compared to 250 in the other APT trusts. APT Global One was designed to bring artists located in both major centers and dispersed localities into the international arena.
APT has representative offices in New York, Los Angeles, London, Leipzig, Mumbai, Hong Kong, Shanghai, Mexico City and Amman, in addition to Artist Relation Managers all around the world.
Subject to curatorial review, artists selected are invited to join APT. By signing the artist participation agreement, each artist commits to depositing one work of art on the average every year, for 20 years, creating a representative in-depth collection of that artist's career.
Artists’ deposits over the course of 20 years will be gradually sold for the financial security and benefit of the artist and fellow APT artists in the same trust. From each sale, 72% of the net proceeds are distributed to the artists in the trust, with 40% to the individual artist and 32% among the artists in that trust on the basis of the number of artworks they have deposited into the trust.
APT was founded to provide artists worldwide with a future long-term financial benefit and to provide artists with international exposure.
The APT model is designed to pay out future disbursements based on the net proceeds received from the sale of artworks deposited by the participating artists in that specific trust.
APT stores all accepted artworks as they are deposited up until the point of sale. They are picked up by APT and transported to one of APT’s storage facilities and are fully insured as of the date of collection/pickup. Once an artwork is deposited, it becomes part of the APT Collection. Through the Loans & Exhibitions initiative of APT Institute, artworks are made available and promoted through various channels as loans to museums, galleries, and other pre-approved venues and/or individuals.
APT Institute is a non-profit organization founded in 2013 by APT in response to the need among contemporary artists for global exposure and recognition of their artwork. Designed for curators, museums, and art organizations worldwide, Loans & Exhibitions facilitates loan requests and exhibition planning from the APT Collection; Art Concierge tailors art interactions between curators or other qualified art professionals and APT artists; Global Connect arranges artist-in-residence programs, studio opportunities and artists’ networking exclusively for APT artists.
Benefits of APT
There is no other structured, market-based investment program that allows artists to directly participate in the long-term value appreciation of their own artworks, and, notably, without any cash investments on behalf of the artist. While artists are not necessarily concerned about their financial future, intelligent financial planning should be a lifetime concern.
Most professionals in the world set aside a portion of their income for their pension, which provides them support during difficult periods and retirement. APT presents a unique opportunity for artists to embrace long-term financial planning, at an early stage. The APT model allows artists to diversify risk in that their future income from the trust is directly related to both their own and others’ successes.
Furthermore, by joining APT, artists benefit from a wide range of promotional activities intended to provide them with international exposure.
APT artists join a cadre of the best emerging and well-established contemporary artists, opening the door to career opportunities, contacts and fellow professionals from across the art world.
APT always puts the artist first, and is focused on maximizing the profile of APT artists and their work. Marketing and public relations activities may include social media campaigns, securing coverage in regional and international publications and promotion of events. Deposited artworks become a part the world’s largest collection of international contemporary art comprising nearly 13,000 pieces, and are lent to qualified institutions or shown in exhibitions organized by the APT Institute’s Loans & Exhibitions department. Other services offered by APT Institute include art interactions between curators or other qualified art professionals and support for APT artists in artist-in-residence programs, studio opportunities and artists’ networking.
See www.aptinstitute.org for a list of our recent loans and exhibitions.
APT’s world-renown Curatorial Team identifies and nurtures the best emerging artists from around the world. Our team is made up of close to 100 leading international art experts who work with the art world’s most prestigious institutions, art consulting companies and successful independent practices. APT artists are continually winning awards and prizes such as the Turner Prize, the William H Johnson Prize, the Hugo Boss Prize and the Future Generation Art Prize; around 30 APT artists participated at the 55th Venice Biennale in 2013.
Furthermore, APT has assembled a team of esteemed and experienced business professionals as its Advisory Board including Professor Dan Galai, a world-renowned authority in risk diversification theory, who developed the APT model together with APT Chairman Moti Shniberg, allowing for optimal performance, distribution of risk and return.
APT allows artists to effectively participate in the long-term value appreciation of their artworks and the works of the peers in their trust, while storage, transportation, and insurance costs are covered by APT. Through the APT Institute, APT also lends artworks in the APT Collection to leading museums, galleries and other art venues, maximizing exposure and increasing the reputation of APT and its individual artists.
Drawing upon the concept of mutual assurance societies, each participating artist benefits financially from the commercial success of all the other artists in the trust. APT provides artists with a unique mechanism for risk diversification which pays to the artists 72% of the net proceeds from artworks sold by the trust, a figure unmatched by any other organization in the art world.
APT’s experienced curators have proven to be quite successful in identifying the most promising of contemporary artists. However, the art world is very fickle. Today’s stars may not be as successful in the future. APT leverages the successes of today’s artists with those of tomorrow. Joining APT provides even the most celebrated artists of today with the chance for future financial security over time. In addition, the benefits of international exposure improve the reputation and careers of even the most successful of local artists extending their visibility across national borders.
APT founded the APT Institute, a non-profit organization, to respond to the need among contemporary artists for global exposure and recognition of their artwork. APT Institute introduces a series of initiatives dedicated to the promotion of contemporary art and the advancement of artists worldwide including a global program for the lending and exhibiting of the APT Collection. Recent loans have been made to institutions such as Tate Modern, TENT Rotterdam, San Francisco Art Institute, Museum Leuven and the Saatchi Gallery.
The APT program is built upon a confluence of interests among artists and gallerists with more than 90% of APT artists being represented by leading galleries worldwide. The APT trusts were specifically designed to support and supplement the activities of the galleries. APT works closely with galleries to identify emerging artists and nurture their careers.
The gallery community has enthusiastically received both APT Artists and Curators and continues to work in tandem with APT to maximize the profile of their artists. Galleries support us in our cause since they understand the importance of the future security we provide for artists. We work diligently to increase the value of artworks deposited with APT, including lending artwork in the APT Collection to leading museums and art institutions and exhibiting this artwork worldwide through the APT Institute. Thus, galleries recognize that the international exposure their artists receive has a positive impact on their artists’ reputation.
In addition to the financial benefits, the international exposure and the networking opportunity, the collective judgment of APT’s curators when selecting an artist to participate is in itself a powerful endorsement of the quality of that individual's work and its financial potential in the future.
Artist/Artwork Selection Process
Artists may apply themselves, may be nominated by other artists or may be nominated by an APT curator. The APT Curatorial Team strives to identify, select and nurture the best emerging artists from around the world; thus, less than five percent of all applicants get selected to join APT. The team is made up of leading art professionals with experience in identifying artists with high potential of success and in supporting these artists through the early and mid-stages of their careers.
APT’s over 100 world-renowned curators have curated exhibitions for numerous leading museums, including the MoMA, Tate Modern, Hirshhorn Museum and Gagosian Gallery, as well as for major art venues such as the Venice Biennale, Art Basel, Documenta and Manifesta.
After completing the application to join APT, the artist is then voted on by the APT Curatorial Team. A list of APT’s distinguished curators as well as application forms to join our team is available at http://www.aptglobal.org/Curator.
Working together with APT curators, each participating artist selects works to deposit according to APT’s investment schedule. APT expects that an artwork of median current market value, representative of that year's output, which could not be characterized as unmanageable in terms of size or style, will be the most appropriate investment into an APT trust. Given that we encounter a wide range of media and approaches to art making, the chosen work will always be a matter of conversation and thoughtful deliberation.
APT's selection process is conducted by our team of leading curators, each of whom is highly regarded in the field of contemporary art. Together with the artists, APT’s curators review and select artworks that are then deposited into the program.
The selection determinations are entirely defined by the professional expertise and authority of the highly-qualified art professionals who serve to make the selection. APT curators are directed to look for the most talented and promising artists currently on the scene.
An artist does not need have gallery representation or a sales record to be selected; for example, an artist who just completed an MFA degree is just as much a viable applicant as an artist with a substantial resume of exhibitions and sales. However, each artist selection is ultimately based on the specific characteristic of the artist. The challenge is to identify the exceptional talent that has the greatest promise.
There is no conflict of interest between the artists’ representative galleries and APT. Over 90 percent of APT artists are represented by leading galleries around the world; galleries often recommend APT to their artists as a means of planning future security. Galleries support us in our cause since they understand the importance of the future security value that we provide for artists.
In addition to supporting the artist, APT promotes each artist’s representing gallery to our international audience of collector/institutions through promotional events, public relations, and direct routes from our website to the gallery’s homepage. Thus, the artist can benefit from both the gallery and APT. The gallery is a source of present income and APT is concerned with future income: this provides the artist with the best strategy to diversify the risk.
The Sales Process
The sale of works will be carefully managed by APT within the option period in order to maximize the monetary value from each sale and 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 and to maximize both the selling price of an artwork as well as the advancement of an artist's career. After building the collection for ten years, APT will slowly and carefully start the selling process of the collection towards the end of 2013.
APT might, for example, sell the works through the selective use of private treaty sales or secondary market dealers and will first target institutions and large collectors.
When there is an offer to acquire an artwork that reflects the best possible return in a given market, while taking into consideration the best possible placement, APT will review the offer and respond accordingly.
APT was conceived and designed to work in tandem with the existing structure and dynamics of the art market. Its success is driven by a confluence of interests among participating artists, dealers and APT management that generates maximum returns from APT artists’ artworks.
The artist will likely be a part of the sales process and often sales leads are generated by artists and their gallerists. If there are two similar bidding parties, the artist and/or gallery may well be consulted as to which collection would best benefit the artist's interests. Ultimately, the decision will be made by APT as the organization must protect the mutuality of the program and ensure that the other artists in the trust see the greatest return from the sale. It is our goal to place work with public collections that are beneficial to the artist’s profile. It is important that APT is advised of any important events that might enhance the value and timing of a sale.
If APT proposes to sell more than a certain number of the artist's accepted artworks within a determined period of time, the artist will be notified.
With 72 percent of the net proceeds from the sale going back to the artists, funds from each sale are scheduled to be distributed following usually during the second quarter of each year following the sale, after all of the sales during the preceding year are finalized. Each artist commits to depositing one work of art on the average every year for 20 years creating a representative in-depth collection of that artist's career. Upon acceptance of a work, APT 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 32 percent of the net proceeds from any sale of artworks.
All accepted and deposited artworks, collected by December 31 of the respective year will qualify for the purpose of the issuance of “pool units” to be included in the pro rata distribution of the funds of the collective pool as shown in the table below. Therefore, all artists who have artworks deposited into APT have accumulated pool units that allow them to benefit from the funds distributed from the sale of any artwork sold during that year from their trust. All net proceeds from the sale of the artist’s own artwork will also be annually distributed in the second quarter, following valuation day.
Artists receive 72 percent of the proceeds from the sale of their artwork, a much higher percentage than what’s customary in the art world.
The accumulated pool units will determine the artist's share of the 32 percent distributed among the artists in the trust. Pool units are assigned on the basis of artwork investment units, based on the investment schedule and APT criteria. The annual distribution will also include the 40 percent of net proceeds from sales of an individual artist's artwork.
The only deductions from the selling price will be commissions to a selling agent, i.e. any costs associated with preparing the work for sale that are not added on to the sales price: installation, production costs, any taxes, transportation fees, VAT, or duties that are not paid by the purchaser, and any other selling costs that are not reimbursed by the selling agent or purchaser. It is in everyone's interest that the selling costs are kept to an absolute minimum. Net proceeds are the proceeds of the sales less the above deductions.
APT retains an option on the ownership of artworks, meaning that the artist retains the title even after depositing the artwork with APT. Whether the artist needs to pay any taxes on the deposit of the artwork prior to the actual point of sale (at which time APT formally acquires title to the artwork from the artists) depends on the specific, personal status of the artist and the country s/he is a resident of.
All operating costs over the lifetime of the program are covered by the management fee collected by APT to cover its costs; artists receive 72 percent of the net proceeds.
It is usually the case that there is no taxable event when the work is deposited. Whether the artist needs to pay any taxes when the artwork is deposited and prior to the actual point of sale must be reviewed by each artist within his country of residence. Ultimately, the individual artist will be responsible for any taxes due, such as income tax, on the sum that is distributed to them after a sale. The prevailing tax codes of each artist's country will prevail.
Terms of Engagement
APT designed a program that rewards loyalty to the plan and the artists who participate. We cannot guarantee the benefits to artists who withdraw from the program. An artist whose request to withdraw has been accepted by APT could still receive 40% of the future sale of any of his/her artworks deposited prior to withdrawal but will no longer be considered as part of the trust and will no longer receive distributions made to trust participants. Artwork already deposited will still considered to be part of that trust’s collection.
As soon as artists deposit their first artwork, their APT membership becomes active. After signing the artist participation agreement, if an artist does not deposit (or continue to) artworks per the terms of the agreement, APT has the discretion to remove them from the program.
The deposited artwork is retained by the collection until the end of the option period for that artwork estimated as 30-40 years from the deposit date of each artwork. The artist will be notified prior to the expiration of the option period (or extension) and will have the right to collect the artwork referred to. Regardless, the artist shall keep the benefits of his or her issued pool unit(s).
Depending on the artist's last will and testament or the relevant legal directives in the artist's jurisdiction, the relevant legal representatives will assume responsibility for the artist's participation, which includes the choice to continue depositing artworks per the recommended investment schedule. Any proceeds from the sale will be allocated according to the assignment of the artist's estate. The assigned beneficiary of an estate will receive all future distributions from APT that would otherwise come to the artist.