Wealthy investors looking to buy Impressionist, Modern or Contemporary works have a few options.

The usual course is to hire a consultant to advise on the value of works sold by dealers and at auction. Buyers must pay a premium, which ranges from 12 to 25 per cent, if paintings are bought at Sotheby's and Christie's auctions. So, investors often try to use consultants to obtain works through private sales. "Retail prices are now being paid at auction," says Spencer Ewen of Seymour Management, an art advisory firm. Citigroup, JP Morgan Chase and UBS have in-house staff who specialise in offering advice on the art market.

Another route gaining attention is to buy into a fine art fund, which invests in a portfolio of paintings.

The idea of these type of funds dates from 1904 when André Level, a French financier, persuaded a group of investors to fund paintings by Picasso and others. In recent years, these funds have had only limited success - with a number closing because of lack of interest from investors.

The mainstay in London is The Fine Art fund, which was started by Philip Hoffman, a former accountant at Christie's. The group, structured as a limited liability partnership, offers the chance to invest in its landmark fund - the Fine Art Fund II - which includes a wide range of works by artists such as Canaletto and Picasso and also a Chinese, Indian and Middle Eastern art fund, which is set to launch in May. Combined, the funds have $100m under management and another $100m is expected to be received this year, according to Hoffman. There is an initial fee of up to 1.5 per cent and a yearly management fee of 2 per cent. There is also, a "profit fee" charged if the fund returns more than 6 per cent when it closes. The fund's yearly annualised return is 23 per cent on average, says Hoffman.