There’s an eye-opening account of the current state of the art investment scene in a recent article by Bloomberg.
Learn more about art as an alternative investment here.
Called ‘Billionaire’s Secrets on How to Make a Bundle in Art’, published at the beginning of May, it goes a long way to highlighting some of the returns that leading investors have been able to make in the art market.
One auction they highlight, which took place at Sotheby’s, New York on 14 May, concerned Irish horse breeder John Magnier and his Amedeo Modigliani painting Nu couché (sur le côté gauche). The 1917 oil painting of nude, reclining lady was bought by Magnier in 2003 for $26.9 million.
The painting sold for $157.2 million, which was a record for Sotheby’s in New York, and acts as one very public example of how fine art investment has brought enormous returns for investors.
What if you don’t have the resources or connections of a John Magnier, though?
Access to art as an asset class should be more democratic
Investing in art, according to information from Artprice.com as highlighted in the Bloomberg article, has delivered average annual returns of 8.9 percent since 2000. From a financial and cultural perspective, the right art investment can certainly hold its own when compared against other more traditional avenues.
There are certain barriers to entry within the existing structure of the art market though, which Bloomberg goes on to highlight. They say it’s “opaque, unregulated and sometimes extremely illiquid”, point out the high commissions that gallery owners and auction houses can charge. There can also be issues surrounding provenance.
Adviser in modern and contemporary art Wendy Goldsmith says to Bloomberg: “In the art market there are no rules, that’s why it is such a minefield and why it has such opportunities.”
Changing tastes can also impact the art market, with Goldsmith adding that the world is full of warehouses of art that have depreciated as much as 90 percent. Again, what if you don’t have the background of an art investor of the likes of, say, John Magnier?
Access to art as an asset class shouldn’t be so complicated
Those issues only scratch the surface of the art market; an industry that has effectively stayed the same for centuries. We’ve outlined the points mentioned here by Bloomberg as well as many other challenges facing the market in our briefing documents.
We firmly believe that we can help to solve those problems by modernising and democratising the market through Maecenas and our platform’s blockchain technology. Through Maecenas, accredited investors can be part of a global, connected art community that gives them the chance to own fractional digital interests in investment grade art through our ART token cryptocurrency.
As well as making art as an asset class more accessible, the very nature of the Maecenas platform and blockchain technology can make the art market fairer, far more transparent, help to better value artworks, combat issues surrounding provenance and much more besides.
The global art community deserves to be more open and transparent. We believe the Maecenas platform can do that. Download our Art Investment Explainer Document to find out more.