CCTV-Exposition de porcelaine de Chine

The new fund will follow a similar strategy to the group's original fund - the first Fine Art fund closed in July 2005, averaging annualised returns on assets sold of 34 per cent.

The group also intends to organise a group of investors to explore the option of acquiring institutional collections by the beginning of 2010.

It said many institutions such as museums and banks might be forced to liquidate their art collections to release capital and assets.

The Fine Art Group said the number of investors seeking alternative investments had risen.

It recently launched a Managed Art Portfolio Service (Maps) under its advisory arm to offer a personalised investment service for investors wanting to build tailormade art collections. The Maps service is targeted at clients collecting for pleasure or investment.

The company said its conservatism, lack of leverage and significant cash holdings had helped investments hold up well against other asset classes. It has around $100m (£63m) under management in previous fund issues.

The average annualised return on assets sold in previous fund issues is 30.15 per cent, it said. The highest internal rate of return for any asset is 546 per cent.

Only one asset to date has been sold for a loss, representing less than 1 per cent of the total assets under management.

The Fine Art Fund II closed in December 2008, averaging returns of 34 per cent on assets sold. Valuations of the portfolio held in the Chinese Fine Art fund, which closed at the same time, are 13 per cent up on cost.

Valuations on the Middle Eastern Fine Art fund are up 6 per cent in its first year of operation.

The new five-year closed-end fund will have a target size of $100m. The minimum investment will be $250,000.

The launch is scheduled for late 2009, closing in early 2010.