In April, Novel Asset Management Ltd launched a $100 million fund that invests in rare diamonds. Twelve art funds are said to be in the process of formation in London.The Artist Rare Instrument Fund LLC, launched late last year, invests in top-quality, rare Italian violins, cellos and violas built by Antonio Stradivari, Joseph Guarnerius del Gesu and other renowned craftsmen from the 17th and 18th centuries.

Past attempts to launch passion funds – investment vehicles that offer significant long-term returns from luxury collectibles such as art, fine wine, diamonds, rare musical instruments and mint condition comic books – aroused little enthusiasm. Strong interest Market volatility and severe declines have reduced the attractiveness of many other investment options, such as equities, bonds and hedge funds, so it’s not surprising that investors are increasingly attracted to passion funds, said Enrique E. Liberman, president of The Art Fund Association based in New York.