Investing in fine art is not a new concept, although this channel has been monopolized by only the wealthiest individuals, collectors, and galleries. A few works of art have recently traded above €100 million providing the sellers and auction houses with very substantial gains.
Of course, there are risks at these price levels. World events and economic crises can deflate the value of just about anything, although great art will always remain scarce and timeless.
Bar-room Scene, oil on canvas, (1835). William Sidney Mount. Via the Art Institute of Chicago.
A Better Way to Invest in Fine Art
In most cases, an investor would likely be the sole purchaser of a particular piece, although groups of investors and syndicates do collectively gather the capital required to purchase a single work of art.
Alternatively, investors can invest in privately owned art funds that operate as an equity mutual fund. Your success depends on the fortunes and skills of the art investment managers who will also charge a commission and split the profits, if they should occur.
With this in mind, consider the possibility of purchasing fractional shares of a masterpiece in a transparent environment with secured provenance and incorruptible record of your ownership position.
Return Potential for Art Investments
Art is a tangible investment. Since the 2008 recession, art has outperformed leading economic indicators, according to a 2016 Huffington Post article titled “Why Invest in Art Now?” The same article mentions that 78% of wealth managers believe that art should be a part of any wealth management offerings.
As with equities, some art and artists’ values will soar, while others may not. However, investors with a developing interest in art should consider diversifying their portfolio into this fascinating arena.
Fractional share art investing would allow individuals to buy a portion of a one-of-a-kind asset while enhancing their art appreciation and taking pride of ownership of one or more specific pieces.
A Modern Way to Invest in Art
Maecenas, with headquarters in London and Singapore, has created the first blockchain-based fine art auction platform. Maecenas’ breakthrough technology loosens the traditional grip that auction houses and elite brokers have held on the art market for centuries. Through Maecenas electronic auctions, investors may now purchase and sell shares of individual art pieces without paying the exorbitant commissions demanded by intermediaries.
Maecenas is moving to democratise the world of art. Investing is no longer limited to ultra-high net worth individuals who operate in an arena with no rules nor transparency.
With Maecenas, accredited investors become part of a global art community with the opportunity to bid on fractional shares of investment-grade art recorded digitally on blockchain ledgers. This platform creates a more fair and transparent marketplace, eliminates worries about provenance and security and is a mechanism to evaluate art pieces better.
How is Blockchain a Viable Transactional System?
Art investing in the first six months of 2017 increased on a year-to-year basis by 18%, according to a Deloitte Art & Finance Report. The larger transactions for investment-grade art, totaling in the trillions of dollars, has occurred mostly through the large auction houses of Sotheby’s and Christie’s and several brokerages. Smaller investors cannot participate.
Blockchain technology and transparent electronic auctions change all that. Smaller investors now can participate, enabling them to diversify their investment portfolio.
Blockchain technology is fundamentally a bookkeeping system that records transactions across a broad network of computers. Because of the breadth of the record keeping and the ledger system, sales records are transparent and incorruptible.
While much positive and negative commentary has swirled around the volatility of cryptocurrencies like Bitcoin and Ethereum -- which are based on blockchain technology -- many corporate, university, and finance leaders are realising that blockchain is the future of record-keeping.
Investment giant Goldman Sachs has endorsed Bitcoin and blockchain for its institutional investors. Moreover, even Chinese President Xi Jinping has hailed blockchain as an “economic breakthrough.”
Contact Maecenas for More Information
Visit our website for more information about our platform and a better way to invest in art. While the platform is innovative, the principles of buying and selling shares in investment-grade art are traditional.
Check out our Frequently Asked Questions to help you clarify any questions you may have on our platform solution.
Also, you will find the How It Works section of the website that depicts some examples of how the platform works for investors, collectors, family offices, and galleries.
If you have more questions and wish to begin a dialogue with Maecenas, complete the simple Contact Form that will tell the Maecenas professionals how you prefer to be contacted.