Art Investment

How is Maecenas making the art market more accessible?

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Written by
Marcelo García Casil

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21 June 2018

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The fine art market is one of the most private and tightly-controlled industries out there. At Maecenas, we want to open up the wider market with our blockchain project for investors and art lovers from all backgrounds.

Learn more about art as an alternative investment here.

You’re in a position to purchase a piece of fine art. Where do you go? Some will head to an auction house such as Sotheby’s or Christie’s, and boost their investment portfolio with some of the most stunning pieces of creative artwork currently available on the market.

That approach can present a lot of problems for the average investor, though. Auction houses are notoriously guarded with their information, so investors and bidders can’t be entirely sure they’re getting a fair price. There’s commission to consider too; buyers could pay up to 25% commission at certain auction houses, while sellers could face even more.

It’s not ideal and highlights a constricted market restricted to the haves and excluding the have-nots.

We’re looking to change that. We're using blockchain technology to decentralise the fine art market, make it more transparent, fairer for all investors and introduces many other benefits that weren’t possible before.

We could continue to talk about how groundbreaking we believe the Maecenas blockchain project will be both for the fine art market and investors, but we don’t want to hype or pump our project for a short term gain. We believe it is much more beneficial to show you how Maecenas could work for a broad range of fine art collectors, desperate to break free from traditional, often costly ways of raising funds.

FREE Art Investment Explainer Document >

 

The gallery owner

Working through the Maecenas blockchain platform could help gallery owners to save money by collaborating with the community rather than resorting to loans.

Say a London-based gallery owns a few Warhols and wants to expand its collection. They have their eye on a specific piece, that would complete the series and round out their collection, available for $3 million. They may have to get a three-year art-secured loan (let’s assume at 13.5% annual interest).

Instead of going down that route though, they could raise funds through investors through the Maecenas platform by listing some of their artwork, at a 6% one-off fee.

Doing so would represent savings of over $400,000 in fees for the gallery.

 

The fine art collector

Imagine a modern art collector who has a passion for Jeff Koons. He’s seen a Balloon dog sculpture he likes and wants to purchase it; the price is set at $58,400,000.

To complete the purchase would usually mean he has to sell other portfolio items from his collection or take out an expensive loan. That doesn’t have to be the case though with Maecenas; our collector could get the funding for his artwork by listing 20% of one of his flagship pieces of art through the platform.

His collection stays intact and he is able to raise the capital for his Koons piece at much lower rates than he may be used to.

 

The fine art investor

High net-worth investors (HNWI) often invest in fine art to diversify a portfolio. Let’s imagine we have an investor who doesn’t have enough capital to start a fine art fund and also isn’t interested in long maturity terms.

If our HNWI went down the auction house route to buy a piece of fine art, an auctioneer would likely charge them a 25% fee in buyers’ premium, making the overall investment opportunity far more expensive than they may have been expecting.

Investing in pieces of art through Maecenas’s blockchain platform though could allow our HNWI to invest in various pieces of art, with fees from as low as 2% of investment value.

 

The family office

Let’s say a client at a midlands family office has been given the green light to diversify their portfolio further with a fine art budget of $15 million. Again, going through an auction house would likely incur exorbitant buyers’ premiums, taking a sizeable chunk away from the overall budget.

Instead, the family office could make their investment through Maecenas’s blockchain project, using our art-based investment platform to peruse a wide range of fine art pieces at drastically smaller fees, allowing the family office to maximise the budget as well as potentially increase the value of their client portfolio.

Maecenas is determined to open the wider fine art market to everybody through our decentralised platform powered by blockchain technology. Find out more in our Art Investment Explainer Document.

FREE Art Investment Explainer Document >

 

Topics: Art Investment

Marcelo García Casil

Written by Marcelo García Casil

Founder and CEO of Maecenas. Having previously worked at a number of large global banks, Marcelo has wide-ranging experience in designing and building large-scale enterprise-grade systems with a focus on investment banking and financial solutions. An an entrepreneur, Marcelo has specialised in blockchain and financial technology, primarily in areas covering tokenisation of assets and new capital markets. His strong technical architecture and leadership skills have earned him the recognition and endorsement from amongst his clients, teammates and peers. Marcelo frequently speaks and presents at industry events, conducts specialised workshops and training sessions, and provides expert advice to companies.

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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