The Railways Pension Fund, London, is getting out of the art business.
The art portfolio was launched in 1974 to generate returns higher than inflation at a time when index-linked government bonds were only a twinkle in the eye of the U.K. fixed-income market.
The final work of art to be sold is an ancient bronze Hellenistic statue depicting a naked man thought to be Poseidon and valued around L3 million ($4.2 million), according to Chris Hitchen, head of investments for the L16 billion scheme. It will be sold in a private sale; Susan Adeane, company secretary of the Railway Pension Trustee Co., would give no further details.
At its height in the early 1980s, the portfolio consisted of 2,425 works of art including Picasso's "Blue Boy," Renoir's "La Promenade," a landscape by the Dutch painter Meindert Hobbema and a pair of paintings by Caneletto.
Scheme trustees decided in 1987 to wind up the portfolio as there were no reliable ways to value it and more appropriate investments were available.
Since its launch, the fund has given an annual average return of four percentage points above retail price inflation, said Ms. Adeane.
The sale of "La Promenade" in April 1989 was one of the fund's most successful disposals and raised L9.4 million against a purchase price in 1976 of L680 000. Market timing was crucial, as the sale coincided with a resurgence of popular interest in Impressionist art, said Mr. Hitchen.
The scheme was less successful, in selling the African pieces of its primitive art collection and its ancient and English coins, which resulted in annual real rates of return of -1.8% and -8%, respectively.