In 2007, Zelda Cheatle and Mehmet Dalman launched the Tosca Photography Fund. The first of its kind, the project started with £3.3m – gathered from 29 investors who put in a minimum of $50,000 each – and the aim of investing in iconic images by 20th-century photographers. Three years and 5600 images later, the fund has closed, and Cheatle, who set up the first commercial photography gallery in London, has one year to sell off the collection, which includes prints by photographers and artists such as Helen Chadwick, Josef Sudek and Eve Arnold, and several collections of work covering topics such as the Civil Rights Movement and 20th-century Russia.

The Art Sensus gallery in Victoria, London, exhibited images from the Russian collection, for example, highlighting 300 prints from the avant-garde 1920s and 30s. Rodchenko figures largely, but so too do images by less-well-known photographers such as Georgi Zelma, Arkady Shaikhet and Simon Fridland, and the show also includes shots of Russian railways and canals under construction by unknown photographers.

It’s impressive stuff but makes up less than half of the Tosca Photography Fund’s entire Russian collection, which also includes gruesome images of key events of the 20th century. “There are images of torture and war; some powerful propaganda pictures, which are extraordinary,” says Cheatle.

Dalman, who is executive vice-chair of Toscafund Asset Management, one of the UK’s largest hedge funds, says that no-one would ever want to hang torture on the walls, and Cheatle hopes they will be bought by photography patrons who will donate them to museums. “These might not be what someone wants to hang on their wall but they could be absolutely right for the Imperial War Museum,” she says. “I have a year to get these images in exactly the right places, and I’m interested in things going to happy homes or the correct collector or institution. It’s not absolutely crucial that everything is together [the Russian collection could be broken up], but what we have are sizeable groups that can go to good institutions. Museums are going to benefit from what we’ve done.”

It’s an interesting approach for an investment vehicle, but Cheatle and Dalman say the project has always been about more than just money – “If you’re just thinking about what you would sell you might just have a lot of nudes with Tesco stickers underneath saying how much they cost,” says Cheatle. She points out that nearly all of the investors have a personal interest in photography, and weren’t in it solely to maximise returns. Dalman was the biggest investor in the fund, for example, and is the proud owner of a sizeable personal collection, which he started with Cheatle in her gallery days. If the Tosca photography collection somehow fails to sell, he says, he’s more than happy to add some prints to his archive. “What’s the worst that could happen?” he says. “I can get to own a third of the collection.”

Healthy return

But while it’s early days, it looks like the fund will do just fine. Despite having been launched the year before the recession, it weathered the economic storm that did for 40 percent of art funds in two years and is now estimated to have increased in value by at least 30 percent. Dalman is confident it will end up returning much more than that by the time it’s all sold off. “We’ve got a very creditable valuer but ultimately the only way you really know [how much the collection is worth] is when you sell the pieces,” he says. “We’ve returned 30 percent of peoples’ money already. Put it this way – one of our investors said that at the current Net Asset Value, he would bid for the whole lot. We said ‘Absolutely not’, because we’re confident it will do better than 30 percent by a mile.”

The increase is partly down to photography’s rising prices and status, but it’s also testament to some pretty shrewd investing. Cheatle and Dalman decided early on not to create a trading fund, choosing to sit on the collection rather than constantly buying and selling prints, and to acquire prints privately rather than from galleries and auctions. As Dalman puts it, “That way, you make the galleries rich, not the investors.” Cheatle also avoided contemporary artists such as Andreas Gursky and Richard Prince and classic photographers such as Edward Steichen and Richard Avedon, all of whom grab the headlines with their auction prices but who, she believes, are currently at their peak market value. She also invested sparingly in very young artists whose prices are as yet untried, although she made an exception for Slade graduate David Birkin and a few others. Instead she focused on established photographers, whose value has slowly but steadily increased.

“Photography has held its value much better than other markets,” she says. “It’s just sort of steadily growing; that’s what I like. There are generally fewer and fewer 20th-century pictures, so they’re getting better and better prices. There are no enormous peaks and troughs and it never dips in a recession, it just gradually gets better and better.”

She and Dalman are confident enough to think about starting another photography collection, which they hope to launch to investors in the near future. The details haven’t been finalised yet, but Dalman is aiming to build an investment fund of about $10m and tie up the money for about three years, as happened last time. The photography they’re investing in, though, is a closely guarded secret. “We wouldn’t tell you what we’d start collecting,” laughs Dalmat. “The prices would start to go up. But the buoyancy of the market is irrelevant, because we’re not asking people to put big money in. It’s not like it’s a $100m fund.”