Art Investment

How Maecenas solves art investment challenges

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Written by
Juan Dominguez

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14 August 2018

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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.

FREE Art Investment Explainer Document >

 

Topics: Art Investment

Juan Dominguez

Written by Juan Dominguez

Prior to joining Maecenas, Juan worked for major global banks such as JP Morgan, ING & ANZ. With a career spanning four different countries (UK, Australia, Netherlands & Spain), he has experience on a wide range of transactions including Institutional Banking, Real Estate, Corporate Advisory & Private Equity. He holds a bachelor of International Business and a Master of Applied Finance from Macquarie University, with an award for high achievement.

Please read the following disclaimer >

This blog post is illustrative and for informative and general education and discussion purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) MAECENAS is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently.. MAECENAS does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and any material with regards to investment decisions. You may not rely on the material contained herein. MAECENAS shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this document may be reproduced in any manner, in whole or in part, without the written permission of MAECENAS except for your internal and/or personal use. This material is being provided to you at no cost and any fees paid by you to MAECENAS are solely general educational purposes. All of the foregoing statements apply regardless of (i) whether you now currently or may in the future become a user of MAECENAS’s platform or products and (ii) the terms contained in any applicable contract between you and MAECENAS.

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