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Over the past three years, Aurora Fine Art Investments has reportedly spent more than $100 million on extraordinary Russian artworks and objects. In September, Russia’s only art-investment fund—and one of the country’s leading and most discreet buyers—will start to shed its holdings, taking advantage of record-high prices for the category to offer prime paintings, silver, Fabergé, rare books and other items in an appointment-only showroom in Moscow’s Ritz-Carlton Hotel.

The firm, which also maintains offices in New York and London, will sell to a global clientele, but there is little doubt that Russian nationals will constitute the largest group of buyers. If the £69 million ($135 million) total earned by the London sales in the field this past June at Bonhams, Christie’s, Sotheby’s and MacDougall’s is any indication, newly wealthy oligarchs remain eager to acquire pieces of their country’s heritage. But some observers have suggested that the market may have reached its peak. Indeed, buyers seem unwilling to push prices in the category beyond the $4 million mark. Bearing in mind that ceiling and the slowly shrinking supply of desirable material, Aurora is utilizing a special marketing strategy to maximize its profits: Rather than sell its hundreds of works as individual pieces, says Andrei Ruzhnikov, a managing partner, the fund has grouped its holdings into a dozen or so “collections,” each of which must be bought as a whole, for tens of millions of dollars. “The value will be greater when the items are held together,” he explains, “due to both their aesthetic and their historical significance.”

This past May, Ruzhnikov brought some of Aurora’s premier wares to the Moscow World Fine Art Fair in the fund’s first public showing of its treasures since it displayed new acquisitions at the same event in September 2005. Ruzhnikov insisted, however, that the works were not yet for sale. Among the top attractions were a set of imperial snuffboxes and two Fabergé creations: a gold-plated tea set and an ornate clock, which had belonged to Great Britain’s Princess Margaret before Aurora acquired it at Christie’s London for £1.1 million ($2.2 million) in 2006.

Although the clock was easy enough to identify, none of the objects in the Moscow preview were labeled. This air of mystery extends to everything about the fund, including how it is organized, who is involved in its management, what it owns and the total value of those holdings. What is known is that Viktor Vekselberg, the 51-year-old Moscow-based mining and oil billionaire, launched the venture in 2005, a year after his dramatic purchase of the Forbes Fabergé collection for more than $100 million shortly before it was to be sold at Sotheby’s New York. At the time, he was a little-known oil magnate, but his acquisition gave a new sheen to the lackluster Russian-art market. It also helped launch the country as a major player by making art buying fashionable among the country’s elite, who had previously rarely spent more than $1 million on a work, and it sent a powerful message that these energized connoisseurs would spend large amounts to buy back their heritage.

Despite Aurora’s culture of secrecy, Ruzhnikov agreed to an interview with Art+Auction, the first time a representative of the firm had spoken with the press since 2005. The manager estimates that the fund’s current holdings “are aggregately worth hundreds of millions of dollars” but is mostly tight-lipped about its operations. “Aurora is a closed fund, and we do not seek new investors,” he says. Indeed, it appears to exist solely for the benefit of Vekselberg, who is the majority shareholder.

Ruzhnikov also notes that most of Aurora’s artworks were accumulated in its first year in business, bought at auction by him and the fund’s other managing partner, the luxury-goods mogul Vladimir Voronchenko, bidding on behalf of the firm. Among those initial purchases were a number of decorative-art objects from the famed Safra collection sale at Sotheby’s London; important modernist works, such as Pyotr Konchalovskys 1913 Portrait of Yuri Petrovich Yuriev (£792,000; $1.4 million) and Boris Grigorievs undated Breton Woman (£377,600; $684,000), also at Sotheby’s London; and an 1848 tea-and-coffee service by the famous Sazikov silversmiths ($1.8 million) at Sotheby’s New York.

After working their way through the auction inventories, Aurora appealed directly to owners, sometimes buying entire private collections, including several hundred cigarette cases, many of them Fabergé, owned by the San Francisco investor and collector John Traina. The firm’s ability to corner quality material and even monopolize certain niche areas has not escaped the notice of competing dealers and collectors, as well as others in the field. “Aurora has had an impact on the market,” says Alexis de Tiesenhausen, the head of Christie’s Russian-art department, choosing his words carefully. “Their first year in operation was impressive. Ruzhnikov has a good eye, without a doubt.”

Aurora is now changing direction to keep up with, and profit from, the rapidly evolving market. “We will continue to buy Russian art, but only to fill in the gaps in the collection. The period of rapid growth in prices on the Russian market is over, and at some point it will reach its peak,” Ruzhnikov explains, adding that the firm is “looking at all different opportunities [and seeking out] anything that makes sense economically.” Blue-chip Impressionist works, he says, are “being outpaced by some top works of Russian art, and so [those works are] more interesting to us now.”

In pursuit of this strategy, the fund recently bought some Impressionist and post-Impressionist pieces, including a Renoir. It is also looking at “several small collections of Impressionist works that have major names in them,” Ruzhnikov says. “If there are works by Picasso, Magritte or Dalí that make financial sense to buy, then sure, we will buy. But it’s not going to be just a quest for those names. We want works of quality. We will only buy if it makes investment sense.”

"A Fund's New Dawn" originally appeared in the August 2008 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's August 2008 Table of Contents.