APT is the first investment program created specifically to provide emerging and mid-career artists with a long-term financial planning program. Seven APTs, comprised of 250 artists, have been formed and developed in major art centers around the world. Each APT is a sum of individual collections within one large collection. It is our objective to assist the artist in building a proprietary collection of his/her artworks within the context of the APT collection. Each APT Director will dedicate time and experience to this objective, drawing on the traditional structure of mutual assurance societies. Focus, consistency and long-term success define APT’s philosophy.

Rather than cash, participants will invest their works of art, accumulating 20 artworks over a 10-20 year period. Ideally, the 20 works by each artist creates a representative collection of that artist’s career over the 20-year period. Most importantly, the artist remains the sole owner of his/her artworks until the work is sold.

A region-specific Curatorial Committee will review and select artists for participation in the program. APT’s Curatorial Committee consists of individuals who are highly experienced and regarded in the field of contemporary art.

Following the invitation to participate in the program, the artist and APT sign an Artist Participation Agreement. Within the first six months and annually thereafter, the artist is required to propose artworks for investment.

APT will store these artworks until the time at which the work is sold. During this holding period works are made available for exhibition at museums, galleries, and other pre-approved venues through APT Curatorial Services.

The initial impulse in founding and organizing APT was around the concept of long-term financial security. Both a “pension” and a “trust” are designed to provide the beneficiary with a steady flow of income as defined by the terms of that financial instrument. APT seeks to combine the virtues of these two models while fully recognizing that “cash flow” and “income stability” are challenges an artist faces much earlier than retirement.

The APT model, therefore, conceived of a plan that pays out cash disbursements from the mutually invested interests (artworks) of all participating artists upon the first sale but then extends over a 20-30 year period.

What is the investment schedule for the artists participating in APT?

Artists will invest two works a year for the first five years; one work a year for the following five years; and one work every two years for the remaining ten years; for a total of 20 works. On average, one work per year is required.

What happens to the artworks held by APT?

The works invested by participating artists are cared for by art professionals applying the best industry practices. Artworks held by APT are fully insured at all times. Biennial appraisals of all artworks are a standard procedure for insurance purposes, and ad-hoc adjustments will be made if very significant changes in the value of a work in APT are brought to our attention. APT will initiate its own exhibitions and publications to help advance the careers of the participating artists. The works of art will be made available for loan to museums, galleries, and other pre-approved venues. Participating artists will be consulted prior to any loan approval. APT also anticipates the circulation of exhibitions drawn exclusively from its collection.

How are the APTs different from one another? Are they organized by the type of art or other classifying qualities? For instance, does one trust contain photographs whereas another is focused on collecting paintings?

Each APT is organized around a regional market. The reach of the individual APT may well extend beyond the immediate geography, but it is agreed that these artists will have some reasonable cause for affiliation be it geographical proximity or a strong market presence (or potential) as defined by the location of the APT. Each trust should reflect a good spread of media towards a diversified portfolio.

Why hasn’t this kind of program for artists been set up before?

Traditional methods of financial planning are not practical for most artists because of the ways in which their careers unfold and the unpredictability of their income. Consequently, few have the cash to invest in conventional investment programs. APT is the unique vision of the founders funded by individual investors who saw the need and the potential of creating a financial model that uses artwork as the sole means of investing.


Terms of Engagement
Is it possible for an artist to decide to leave APT?

Artists may chose to leave the APT program, but cannot be forced to leave other than for non-performance according to their contractual obligations. APT designed a program that rewards loyalty to the plan and the artists who participate. Artists who withdraw from the program before fulfilling the required contribution of 20 works over a 20-year period will receive appropriate benefits, based on the pool units accumulated from the works they have invested.

Yes, the artist will receive 40% of the net proceeds of a sale of their artworks per the terms of the agreement and a pro-rata share of the 32% until the last work the artist has deposited has either sold or been returned at the end of the 20-year option period. At this point the artist will no longer be a beneficiary of the pool or any other benefits APT offers.

Artists can be removed from APT if they are unable to fulfil the participation requirement, which is providing 20 works over a 20-year period.

The APT program is built upon a confluence of interests among artists and dealers. The APTs were specifically conceived in a way that supports and supplements the activities of the galleries. APT works closely with galleries to identify emerging artists and nurture their careers.

The gallery community has enthusiastically received APT and a number of leading dealers are working as members of our Curatorial Committees. APT is providing a valuable service that galleries themselves cannot provide.

There are no structured, market-based investment programs that allow an artist to directly participate in the long-term value appreciation of his/her artworks. While young artists are not necessarily concerned about life insurance and pension plans, intelligent financial planning should be a lifetime concern. APT is a unique opportunity for emerging and mid-career artists to embrace long-term financial planning, at an early stage, without any cash investments ever.

How can APT ensure that it will generate meaningful income for its participants?

APT Holding Worldwide Inc. (BVI), the sole shareholder of all seven APTs, has assembled a team of highly-esteemed and experienced business professionals. In developing the business model and projecting APT's performance. Professor Dan Galai, a world-renowned authority in risk diversification theory, has developed the program to allow for an optimal distribution of risk and return. APT’s Chief Executive Officer is Bijan Khezri, a financial services professional with senior management experience in both public and private companies around the world. However, all decisions related to nomination of artists and the selection and sale of artworks are delegated to dedicated committees.

APT has put together a team of leading art world professionals to select artists for the program. David A. Ross, former director of SFMOMA and the Whitney Museum of American Art, was critical in assembling the team and continues to serve as Chairman of Curatorial Committees.

As with all investment programs, APT cannot ensure that any meaningful income will be generated for its participants.

For more information on APT's management team and advisory board, please visit the Management & Advisors section of the website: www.aptglobal.org.

APT allows the artist to effectively participate in the long-term value appreciation of his/her artworks while storage, conservation, and insurance costs are covered. In addition, the invested artwork becomes part of a global network for exhibition and promotion. Most importantly, drawing upon the concept of mutual assurance societies, each participating artist benefits from the commercial success of 249 other participating artists. This aspect of the program provides artists with a unique mechanism for risk diversification.

This is the essential nature of all mutual assurance programs. Therefore, to a certain extent this is also true for APT. Still, participating artists who invest equally upfront, benefit equally from the pooled funds at liquidation.

Yes. APT does not hold title to the work until the option has been exercised and the work is sold. All works remain the legal property of the artist. Lien holders can not, therefore, claim a collateral interest in the artworks. APT is granted, by the terms of the Artist Participation Agreement, the right to sell, promote, and exhibit the artwork until it is sold. All interests in an artwork are considered the shared interests of 250 artists, which the company carefully safeguards and manages. In the event that the regional APT, APT Worldwide, and Mutual Art, Inc. cease to exist as a corporate entity capable of storing and maintaining art works as promised to the artists, the Company acknowledges and assures that accepted artworks will revert under the specific artist’s direct control. The Company will make reasonable best efforts to provide for the payment and arrangement of storage costs for a minimum of six months.

Will the works be exhibited or leased while held by APT?

Any work that is deposited with APT will be made available for loan to museums and curatorial projects as part of APT Curatorial Services. APT Curatorial Services is a structured lending program. APT will make every effort to support and accommodate the artists’ career development. The artworks will not be leased. The greatest advantage to the participating artists is that all APTs provide access to an extraordinary, global network of professionals. Efforts will be made by the global network of Directors and Curatorial Committee Members to promote and encourage broader market and curatorial opportunities for the artist.

The greatest advantage to the participating artists is any of the individual APTs is access to an extraordinary, global networks of professionals. The accepted artworks will be lent to museums during the holding period and efforts will be made by the global network of Directors and Curatorial Committee Members to promote and encourage broader market and curatorial opportunities for the artist.

The primary benefit to artists is the diversification and mutuality of the risk. An artist whose work sells for less than another will be the greater beneficiary in the pool (32% of the net proceeds derived from sold works). It will provide long-term financial benefits and security that simply are not available for the artist on his own. To be clear, each artist whose work is sold receives 40% of the net proceeds derived from the sale. Thirty-two percent (32%) of that sale goes to the pool. The other 249 artists will benefit from the 32% contribution based pro rata on the number of artworks they have deposited with APT. These artists will receive the proceeds on an annual distribution date.

There are no specific criteria. Artists are approached by a Curatorial Committee consisting of curators, gallerists, art school academics and other professionals from the art world. Each APT has its own Curatorial Committee. Artists may apply directly. Online applications are available at www.aptglobal.org.

Is gallery representation a requirement, and/or must an artist have sold a certain number of works in order to be considered? Are there any specific criteria that the Directors and Curatorial Committee Members want to see met for consideration?

The selection determinations are entirely defined by the professional expertise and authority of the highly qualified art professionals who serve on the Curatorial Committees. While viewpoint cannot help but come into play, they are directed to look for the most talented and promising artists currently on the scene. An artist need not have gallery representation or a sales record; for example, an artist that is just finishing an MFA program is just as much a viable applicant as an artist with a substantial resume of exhibitions and sales. The challenge is to identify the exceptional talent that has the greatest promise.

How are works of art selected for investment?

Working together with a member of the Curatorial Committee and/or the APT Director, each participating artist selects a work, or works, to invest according to an optimum investment schedule. APT expects that an artwork of median current market value, representative of that year's production, will be the most appropriate investment in an artist's APT. Given that we encounter a wide range of mediums and approaches to art-making, the selected work will always be a matter of thoughtful consideration.

May I replace or trade an artwork previously invested for another?

Yes. With the consent of the APT Director, artists may replace works previously invested for others provided that the new work is of an equal or greater fair market value and is of similar quality to the former work.


The Selling Process
How and when will the works be sold?

The sale of works will be carefully managed by an independent selling committee in order to maximize the monetary value from each sale and to 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.

Whenever possible, APT will work with each artist's primary gallery when offering the works for sale. When appropriate, APT will also sell the works through the selective use of private treaty sales, auctions and secondary market dealers.

When there is an offer to acquire the artwork that reflects the best possible return in a given market, while taking consideration for the best possible placement, a global sales task force will review the offer and respond accordingly.

APT is conceived and designed to work in tandem with the existing structure and dynamics of the art market. Its success will be driven by a confluence of interests among the participating artists, dealers and APT management to generate maximum returns from artworks.

We will most likely be approached by the primary gallerist of the artist with an offer – the customary secondary market sales commission rate of 5 to 10% would apply – but more importantly we anticipate the gallery will ‘place’ the work well as they have been working with the artist for so long. The distribution (40% artist; 32% pool; 28% APT) will then apply on the net proceeds, after commission, from the sale.

There are two important dates: (1) The Annual Accounting date, which is December 31st; and (2) The Annual Valuation Date, which is March 31st. All artworks collected by December 31st will qualify as Pool Units to be included in the pro rata of the funds distributed to the collective pool on or around the Annual Valuation Date. Therefore, all artists who have artworks deposited in APT have accumulated Pool Units that allow them to benefit from the funds distributed from the sale of any artwork sold in that year. All net proceeds in which the artist directly participates (because it is his/her artwork) will also be annually distributed on or around the Valuation Date. On an annual basis, the totality of funds that the artist is entitled to will be wired directly into an account designated by the artist.

How is it decided when art works will be auctioned off? Is there one auction a year? Does the artist receive any cash disbursements until there’s an auction and the work is sold? Are these regular, annual events or does the Director decide when to have an auction?

The artworks will not be auctioned off. Most sales will be the result of a gallery or collector inquiry. The sales could happen at any time during the year as they will be handled as individual transactions based on market demand. A Global Sales Task Force will be appointed to decide on the sales strategy for Accepted Artworks to ensure optimum timing and optimum channel of sales to achieve the best pricing. At the appropriate time, an Ethics Committee will be put into place to vet the sale process of the Accepted Artworks to safeguard against any possible conflict of interests which could possibly compromise optimum pricing.

We will most likely be approached by the primary gallerist of the artist with an offer – the customary secondary market sales commission rate of 5 to 10% would apply – but more importantly we imagine the gallery will ‘place’ the work well as they have been working with the artist for so long.

When there is an offer to acquire the artwork that reflects the best possible return in a given market, while taking consideration for the best possible placement, a global sales task force will review the offer and respond accordingly.

Will the artist have a say when the work is sold?

The artist will likely be a part of the sales process as we anticipate that many sales will be referred to APT by either the primary gallery or the artist. If there are two bidding parties, the artist and/or gallery may well be consulted as to which collection would best benefit the artist’s interests, but finally the determination resides with APT as the company must protect the mutuality of the program and ensure that the 249 Other Artists see the greatest return/benefit from the sale. It is our ambition to place much of the work with public collections. It is important that APT is advised of any important events that might enhance the value and timing of a sale.

Sales will not, as a rule, be considered until the APT has closed with 250 participating artists. The decision to sell will be predicated on the right offer at the right time, seeking to maximize the potential return on the invested artwork while considering the most beneficial placement.

If an artist decides to leave APT, will unsold work stay deposited with APT until the 20 years have expired? What if an artist dies before the 20 years have passed?

Yes, the works are held by APT until the option expires. 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. Thus, any next of kin (wife, husband, child, etc.) will assume responsibility for the artist’s participation, which includes the choice to continue depositing artworks per the recommended investment schedule. No one else can collect this income.

Is it APT’s aim to sell the work within the 20-year option period?

Yes, it is APT’s mandate to provide all participating artists with an annual benefit from the 40% that is directed to the individual artist whose work sells as well as a share of the 32% that is directed to the pool as proceeds accumulate from sales.

Is it possible that after 20 years there might be unsold work with APT? What will happen to any unsold work?

Yes. The artist will be notified of the expiration of the option and have the right to collect the work. With effect from such notice, APT [City], Inc. shall have no further rights or obligations in respect of such Accepted Artwork, except that the Artist shall keep the benefit of any Pool Unit(s) vested in accordance with the vesting schedule set out in Schedule 4 of the Artist Participation Agreement.

Is the yearly payment determined on pool points and number of pieces only?

Yes, in part. The accumulated Pool Units will determine an artist’s share of the 32%. The assigned Pool Units are tied to the individual investment, not the number of actual artworks as on occasion more than one artwork might constitute a single investment or, conversely, a single work might constitute more than one investment and therefore carry additional Pool Units. The annual distribution will also include the 40% of net proceeds from sales of an individual artist’s work.

If some artists put aside an artwork valued at $/€ 10.000 in and others a work valued at $/€ 100.000, would you allocate more pool units to the more valuable work?

No. The artist will see the enhanced benefit of investing more from the 40% that the individual artist receives at the point of sale. Finally, it is not today’s value of the artwork that is a primary consideration, but its long-term potential. As the sale may not occur for 10 to 20 years, the $/€ 10,000 artwork could conceivably sell for as much or more as the $/€ 100,000 work. APT’s core is a collective endeavour that ensures every participating artist will receive some financial benefit irrespective of their position in or share of the market.

Will the work be sold at auction?

Auction is the least preferable sale’s option as it is inherently risky for the artist’s future market. The preferred selling avenue will be private treaty sales through the gallery or directly to an institution or collector.

Can you give a breakdown should an artwork sell for €/$ 10,000? What deductions will be made?

The only deductions from the selling price will be commissions to a selling agent, any costs associated with preparing the work for sale that are not added on to the sales price (as in the case of an installation where the production costs would likely be in addition to the selling price), any taxes, conveyance 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. The commission will reflect the industry standard for a secondary market sale, which is usually 5 – 10%. It is in everyone’s interest if the selling costs are kept to an absolute minimum.

The VAT or any tax due on the sale does not impact on the net profit the artists are dividing; it will be applied on top of the sale price. Is this correct?

Yes. No other costs will be deducted (other than those directly tied to the sale as explained above) as all operating costs over the lifetime of the program are covered by the 28% of the sale that is retained by the company.

Are the values of the artworks that are invested with APT subject to taxation?

No, there is no taxable event until the work is sold. At that time the individual artist will be responsible for any taxes due, such as income, on the sum that is distributed to them per the terms of the agreement. The prevailing tax codes of each artist’s resident state or country will prevail.

Are the 28% costs or other costs tax-deductible?

The 28% is the share the company will receive and therefore has no bearing on the artist’s income or tax situation.

Is the yearly payment marked as a pension?

No. It is a straight cash distribution, much like any other conventional income from sales or investments. The tax deductibility of any disbursements received from APT will depend on the prevailing tax code in the artist’s state/country of residence. In some countries the artist can deposit a share of their annual income into a personal retirement account and receive a tax-deductible benefit, per the prevailing tax laws and regulations of the artist’s country of residence. The artist is advised to consult their tax advisor or a tax attorney.


The Legal Structure
Where are the APT offices located? Are they in the British Virgin Islands?

There is not a "physical office” for any of the APT regional offices, but there is a central office for global APT operations in New York.

What is the protection/regulation of the program? Who has authorized and regulated the program?

The operations are regulated by the laws of the British Virgin Islands. Therefore, the company's legal and tax structure is defined by BVI laws. As this is an investment program where investors effectively invest with a product of their own labor (artwork), rather than cash, the program is not subject to the requirement of authorization and regulation. All legal entities are incorporated in the British Virgin Islands (“BVI”).

I would like to name a beneficiary in case of my untimely death, to a relative as opposed to the trustees making a decision on my behalf. How would I go about doing that?

There are no Trustees. Upon the untimely death of any participating artists, the artist’s investments will automatically benefit the legal or designated (as per will) inheritor.

Why B.V.I.? What is the impact of the British Virgin Island laws on me as a participating artist and are there any tax benefits?

APT operates in more than thirty countries. BVI provides a neutral jurisdiction which is friendly and open to all other jurisdictions, while eliminating all possible conflicts of tax jurisdictions. Our objective has been to stay above all issues as to whether the artist is part or not part of the EU, for example. APT is still subject to local taxes in the various jurisdictions (such as VAT on purchases and services we source) but would not be taxed for income and other capital gains.

All of the APTs are wholly-owned subsidiaries of APT Holding Worldwide, Inc. (BVI). As APT is neither a pension nor a trust, in legal terms, there are no trustees, with the exception of APT Mumbai which does, in fact, have a trust structure. The Members of the Board of Directors are as follows:

Whilst his professional background is in finance, Bijan Khezri has been running publicly listed companies with significant multinational operations. He has also been collecting young emerging artists for many years. Indeed, APT is right at the junction of three of his most passionate interests: finance, art and globalization.

APT is a not a pension system, in the proper sense. APT is an innovative long-term investment planning program. At this point, there are no tax benefits, which a typical pension scheme would imply.

Who are the investors behind the Artist Pension Trust (APT)?

APT is a privately financed company. Most of the investors (less than fifty altogether) are private individuals with a strong interest in finance and art. Certain of the investors either own or manage significant banking operations. Their interest in APT is a combination of building an important contemporary art collection with a long-term perspective and to spearhead APT as a platform for a fully integrated financial services firm dedicated to the art world.

Is there any connection between Artist Pension Trust® (APT) and Artist Trust? Are they the same organization?

No, we are separate entities, but we both provide important support services to artists. Artist Trust is a not-for-profit organization that has provided support and encouragement since 1987 to individual artists working in all disciplines in order to enrich community life throughout Washington State.