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Alternative investments are so called because they offer something beyond the traditional asset class definitions of equity, fixed income & cash. Generally speaking, alternative investments have little or no correlation to equity markets. Therefore, investments in these can offer a good hedge to an investor’s investments in the equity markets. Some alternative investments such as gold can also offer a hedge to inflation. Some of the alternative assets that investors can purchase though us are:
   
Gold | Real Estate | Art Advisory | Private Equity | Structured Products | Carbon Credits | Wind/Hydel Energy

   
   
GOLD :
   
  Investing in hard assets such as gold has not only yielded positive returns over a period of time but has also provided a hedge against inflation. Gold offers an added advantage of having little or no correlation to the equity markets.
 
The price of gold remained remarkably stable for long periods of time. For example, Sir Isaac Newton, as master of the U.K. Mint, set the gold price at L3.17s. 10d. per troy ounce in 1717, and it remained effectively the same for two hundred years until 1914. The only exception was during the Napoleonic wars from 1797 to 1821. The official U.S. Government gold price has changed only four times from 1792 to the present. Starting at $19.75 per troy ounce, raised to $20.67 in 1834, and $35 in 1934. In 1972, the price was raised to $38 and then to $42.22 in 1973. A two-tiered pricing system was created in 1968, and the market price for gold has been free to fluctuate since then as the chart below shows.
   
 
   
  Instruments available to an investor by which he can participate in this asset class through us are:
 
     
 
Gold Mutual Funds
 
Gold Exchange Traded Funds
 
Gold Futures

   
   
REAL ESTATE :
   
 
Real Estate as an asset class helps you diversify the risk in your portfolio. Historically real estate reflects a low to no correlation to equity and other asset classes. Real Estate investments have the potential to provide stable returns even in a highly volatile environment. Your Real Estate Advisor will offer you the best in breed investment services in the following areas:
 
     
Direct Realty Investments: We advise on the following segments :
   
Residential
Commercial
Retail
     
 
Pre-Leased Assets
     
Realty Funds
   
Structured Realty Investment
     
Additionally, we offer advice on international real estate investments.

   
   
ART ADVISORY :
   
 
Source : Artprice.Com
   
 
Investing in the arcane world of Art needs simplification. There are no established formulae or quantitative strategies to decipher the codes that the world of art contains. To make wise decision for investment in art needs a high degree of sophistication and understanding of the risks involved. However, with the right strategy these investments can yield superior returns and can be an ideal tool for diversification considering their low to no correlation with traditional asset classes such as stocks, bonds and cash.
   
 
Through diligent spadework, interviews & credibility assessment, we at Burgeon Wealth Advisors have created a panel of experts who have a sound background of art investments (advisory and dealing). These experts would create an art portfolio by mapping your risk profile to the art works and work closely with our advisory team to evaluate your art holdings in the overall context of your investments across asset classes.
   
 
ART ADVISORY SERVICES
   
 
One should not be involved in any kind of art if it doesn’t fill his heart with joy! If you would not be proud of embellishing your living environment with the art you purchased, you shouldn’t. However, interestingly as a trend, across the globe as in India, good art has been growing in value as an investment, lending it an appeal, which is both emotional and economic.
   
 
Vagaries of art market can be punishing as well as a tremendously rewarding investment experience. Critical to successful investment in art requires not only extensive know-how about the artistic quality, provenance, and authenticity of the object to be acquired but also about the idiosyncrasies of the art market. Additionally, the art collector needs to have a vision of varying special cultural factors and evolving market preferences.
   
 
Art created by Indian artists, may it be paintings, sculptures, lithographs, photographs or sketches have taken a viable place in a discerning investor’s alternative investment portfolio. Additionally, like real estate, investment in art can be securitized. One example would be the advances and guarantees offered by auction houses to their clients.
 
   
 
ART MARKET LANDSCAPE IN INDIA
   
  Characteristics that describe the Indian Art Market are:
 
     
 
Thin Liquidity :
   
This is due to the fact that art market in India is still not as ‘developed’ as in the west. The chief reasons for this are, investors’ and collectors’ knowledge base is not as deep as compared to developed markets. Also, art has still not completely taken its place as a viable alternative asset class for investment purposes.
     
 
Asymmetry of information :
   
The acquisition price of a work of art is not generally public information and is often only known to the parties immediately involved. This contributes toward low transparency in this market and the risk of arbitrary pricing on occasion.
     
 
Higher Transaction Costs :
   
Transaction costs such as logistics & handling costs, insurance and auction fees are higher than other investment classes. Additionally, Indian art investors are interested mainly only in Indian art as compared to investors in more developed markets where they are open to artists from various countries.
     
 
Nascency in Art Forms :
   
As compared to developed markets where various art forms are appreciated, understood and traded such as lithographs, photographs, sculptors, paintings, posters etc, investors in India are presently focused pre-dominantly on paintings. For ‘good’ works of art in paintings, this lends a flavor of it being a seller’s market. This characteristic is even more pronounced in the case of deceased artists where elasticity of supply is zero.
 
   
  BURGEON ART ADVISORY SERVICES OFFERING
   
 
It is a challenge for an individual investor to invest efficiently in art in India today. Unlike mutual funds available as an easy means to gain exposure in traditional asset classes such as equities, debt and cash, art funds have all but dried up. This is due to more stringent regulations primarily due to the trust structure art funds were utilizing to be in existence. Additionally, unlike mutual funds, where one has access to the NAV of the fund on a daily basis, procuring the NAV data on an art fund is a challenge.
   
  Some of the advantages which the Burgeon advisory service offers :
 
     
 
Whether one is a collector or an investor, he will get assistance throughout the process
    of research and acquisition of the kind of art he is interested in
     
 
Multiple Exit options
     
 
Access to Art experts who guide buyers on the purchase of art works
     
 
Recommendations based on research
     
 
Transparency, as investors are aware of purchase and sale prices.
 
 
 
Logistics, Storage and Insurance support
 
   
  WHO CAN BENEFIT
   
  The Art Advisory Services are ideally suited for
 
     
 
Individuals / Corporate who want to invest in art but are skeptical of the traditional channels
     
 
Individuals / Corporate who want to acquire art to start their own collection
   
 
Individuals / Corporate who would want to acquire art to build on their existing collection
     
 
Individuals / Corporate who are looking at diversifying their portfolio by investing in alternative investment channels
   
  The Art Advisory Services shall provide
 
     
 
Evaluation of your art holdings within the context of portfolio allocation strategies
     
 
Unbiased Advice
   
 
No conflict of interest since the panel is not tied to any one gallery
     
 
Mapping of your risk profile to the art works
 
   
  INVESTMENT MODEL
 
     
 
Purchase
 
Auction Houses
 
Galleries
 
Artists
 
Private Collectors
 
Advisors
     
 
 
Management
 
Valuation
 
Transparency
 
Events
 
Exhibitions
     
 
 
Exit
 
Auction Houses
 
Galleries
 
Private collectors
 
Corporate
 
Museums
 
   
  OUR SERVICE OFFERING
   
 
The Burgeon Art Advisory Services offers a Non- Discretionary Art Advisory Service assisting you to invest in art, based on their risk profile. The Advisory allows you to acquire works of art as per your comfort and the artworks acquired would be kept in your possession or at a climate controlled storage location.
   
  For seasoned investors the Art Advisory Service would offer the following proposition:
 
     
 
Acquiring or disinvesting artworks currently in your collection
     
 
Identifying emerging opportunities through research and need identification
     
 
Valuations of potential purchases
     
 
Representing collectors in auctions and all other transactions
   
  Further we would offer to all our investors :
 
     
 
An assessment of a Collectors Art Inventory, along with publishing using cataloguing and booklets
     
 
Appraisal of the artwork which includes in depth investigation through research and analysis
     
 
An earnest value of an artwork is provided to the Collector
     
 
Guidance on basic conservation and preservation of artworks
     
 
Best methods for preservation with customized recommendations for each client
 
 
 
Frame, Pack, Ship and Install artworks
 
   
  INVESTMENT STRATEGY
   
  There are essentially 3 approaches to investing in Art.
 
     
 
Conservative: Where you would invest only in the Masters and envisage a limited downside
     
 
Mix: This approach is for those who would like to take moderate amount of risk, and the portfolio would comprise a
    percentage in Emerging Artists and the balance in established Masters
     
 
Aggressive: This approach is ideally suited for those who would invest primarily in Emerging Artists and Alternative Forms and
    Mediums
   
  Research on the invested artist would be carried out based on the following criteria
 
     
 
Artist history and artwork origin
     
 
Analysis of artist growth through market data
     
 
Value of comparable artworks by the artist, to achieve a market perspective
     
 
Marketability of the Artists works to evaluate easy exit
 
 
 
Examine and assess for pricing, publication and exhibition histories
 
 
 
Study of the artist's biography along with exhibition and publication history
 
   
  STEPS AND PROCEDURES
   
  To begin with our representative will arrange a meeting with you to identify your objectives and the benefits you aim to derive from the Art proposition. This will help us identify the services desired, your risk profile and your preference of art works
 
     
1.
On receiving a confirmatory sign off on the Client Engagement Sheet and Client Profiler, we will initiate the following process:
   
Arrange for a call or a visit by the Art consultant for a deeper understanding of your needs
   
Open Bank Accounts – Time limit within 2 weeks of receipt of PAN and other KYC documents
   
The next step is to transfer the necessary amount into the account. The cash can be transferred from any local bank
  account of yours. In case you are an NRI the money needs to be transferred from NRE / NRO account only.
     
After the accounts are opened with the bank the process of analyzing your current portfolio of art works (If any) will be
  initiated. The time limit for the same will be within 4 weeks of transfer of funds into your bank account.
     
2.
On creation of the risk and preference profile, Burgeon Wealth Advisors will inform you of the various art works, which are
 
available for investment along with the parameters, which have been laid out through email/phone/personal visit. This would be an ongoing process, which would aim at deploying the total commitment amount within a period of 6 months from the date of transfer of funds into the Bank Account. These options would be sourced from the Art consultant who would offer the current options available based on research carried out by the consultant. The consultant would provide along with the artwork a short description of the artist and the investment rationale behind the investment.
   
3.
You would have to approve any option being offered within a 48-hour period of the Financial Advisor sending out the Investment
    Options. Approvals will be accepted only via email / fax.
     
 
4.
Once you approve a work of art, you would have to transfer any additional funds that may be required, into the Bank Account
    within 48 hours of confirmation of the investment option.
     
 
5.
On acquisition of the Artwork, after payment of the entire value, Burgeon Wealth Advisors will coordinate with the consultant to
    have the artworks delivered to the pre-specified location by the gallery.
     
 
6.
We will send you an intimation on when to exit from a particular Art Investment, via email / Fax.
     
 
7.
You would need to confirm your approval to Burgeon Wealth Advisors for initiating the sale of the artwork, via email / Fax
    within 48 hours of such intimation to you.
     
 
8.
We will arrange to inspect the artwork, before marketing it to buyers using various exit strategies - Time Limit shall be 2 weeks
    from receipt of the Sale confirmation.
     
 
9.
Once the artwork is sold, we would arrange for shipping of the artwork, subsequent to which the funds would be deposited
    into your bank account. As part of the process you would have to sign off on a delivery note.

 
   
PRIVATE EQUITY And VENTURE CAPITAL
 
     
Our value proposition to you is to enable you:
     
 
To capture the potential in Private Equity
     
To include an alternative asset class like private equity in our product basket

   
   
STRUCTURED PRODUCTS
   
  Structured Products are a way to puppet the market according to one’s objective of investment. Some of the following are ways in which an investor can utilize structured products to provide an oomph to his portfolio:
 
     
 
Principal Guaranteed Structured Products
     
Partial Principal Protection with a greater participation in the market. For example, 125% of the upside move of Nifty with 90%
    principal protection
     
 
Structures that gives a set dividend at the end of the tenure
     
An investor can participate in structured products by :
     
 
Purchasing pre-packaged structured products through us
     
 
Purchase a ‘customized’ structured product based on your own requirements for a certain corpus
     
 
Buy a structured product mutual fund

   
   
CARBON CREDITS
   
 
   
  Environmental awareness :
 
According to Kyoto protocol, signatory countries have to bring the emissions to the levels in 1990s by 2012. India has set itself a goal of generating 10% of all the power generation through renewable energy sources. This has led to a much greater degree of interest in carbon credits.
   
  As is evidenced by the chart below, interest in carbon credits is on the rise. We can assist in the following ways:
 
     
 
Assist in getting carbon credits certificates for your industry
     
Assist in trading them

   
   
WIND ENERGY
 
     
 
Assist in getting carbon credits certificates for your industry  
     
Government policies may remain favorable owing to enhanced environmental
    awareness and commitment to increase renewable energy generation
     
 
This is appropriate for an Aggressive client profile who is willing to lock in his
    money for the long term for the potential of superior returns
   
  An investor investing in wind energy can avail the following benefits
 
     
 
High IRR (generally 15-24%)
     
80%Income tax accelerated depreciation
     
 
Tax Holiday under Section 80 I (A) – IT holiday for any 10 consecutive years
     
 
Captive power – an investor can get cheap power for his industrial unit / factory for a fix period
     
 
3rd party sales – an investor can sells its turbine to another investor if need arises
     
 
Carbon credits – generation of clean energy earns carbon credits for the investor which adds to the revenue
     
 
Turn key operations – operations are handled completely by the wind turbine provider including maintenance, security,
    collection from SEBs etc.
   
   
 
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