Alternative Investment Art Investment

How to get into the fine art market when you don’t own a fortune

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Written by
Juan Dominguez

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19 September 2018

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If you are still unsure about the potential that art can provide as an alternative investment opportunity, take a look at some recent sales at one of the latest auctions.

The Coeur d’Alene Art Auction, held on July 28 at the Grand Sierra Resort in Reno, specialising in Fine Western and American art, sold more than 90% of its lots and amassed over $13.2 million in sales. One of the biggest sellers was The Thirsty Trapper (1850) by Alfred Jacob Miller, an oil on canvas piece which achieved $1.7 million.

That’s an impressive sum, and will have likely repaid the faith of the seller who chose to invest in the artwork as an alternative investment opportunity when they first saw the painting. When it comes to art as a diversified investment, though, the rewards could be even greater.

How you can access fine art as an alternative investment

At the extreme end of the spectrum, for instance, is the case of the ‘most valuable painting in the world’. Salvator Mundi by Leonardo da Vinci, a painting of Jesus Christ commissioned by France’s King Louis XII over 500 years ago, was auctioned by Christie’s in New York in November 2017 for a world-record $450.3 million.

That value is well above other previous records at auction, including Pablo Picasso’s 1955 Women of Algiers (Version O) which was auctioned for $179.4 million, with Amedeo Modigliani’s 1917-18 Reclining Nude close behind at $170.4m.

Little wonder then that so many investors become enchanted by the idea of art as an alternative investment. As powerful and alluring as those sales prices are though, they represent a double-edged sword for investors looking to enter the art market.

High prices present a naturally high barrier for entry to people looking at art as a diversified investment; for instance, from July 2016 to end-June 2017, Contemporary Art generated a global auction turnover of $1.58 billion.

That’s a rise of 3.2% over the same year-earlier time frame; at the same time, the average price for a work of contemporary art has risen from $26,160 to $27,600. The market is highly competitive, dealers and auction houses have tight control over information, buyers’ and sellers’ premiums are awfully high at the world’s most prominent auction house.

How can an investor realistically look at art as a diversified investment if they don’t own a fortune?

How blockchain technology is democratising the art market

Maecenas is working to lower those barriers and open the wider art market to alternative investment professionals with blockchain technology.

Maecenas’ platform works to remove middle men in the form of the auction house and galleries to better connect artists, buyers, sellers, collectors, investors and others in a fully democratic way. 

Artworks can be put through Maecenas’ Dutch auction process, allowing people to bid to own digital shares of artworks and potentially own some of the world’s most prominent masterpieces.

Blockchain technology and our own cryptocurrency, the ART token, allows this to happen in a fully open, transparent and incorruptible way through the ‘blockchain ledger’. Tokenising artworks can help investors to own shares in famous works, as well as throwing open the doors of a market that’s desperately in need of modernisation.

Maecenas is more than just a way for investors to enter the market - it also benefits the seller. Whether you are an art owner, gallery or collector looking to sell shares in your artworks to generate funds or a buyer looking to bypass enormous gallery commissions and realistically have a chance in owning part of an artwork, Maecenas could help you do that with our world-leading blockchain art investment platform.

Find out more about the benefits that Maecenas can bring to investors in our Art Investment Explainer Document.

FREE Art Investment Explainer Document >

 

Topics: Alternative Investment, 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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