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Not many people can afford to buy an entire multi-million-pound artwork, but a fraction of a multi-million-pound artwork is a different story altogether. That’s why buying shares, also known as fractional investment, is a great way of getting involved in the contemporary art market.
The contemporary art market has performed extremely well over the last 40 years, outperforming the S&P500 Index by 240% since 1986 (data from LiveArt), and has proved remarkably resilient against both inflationary and economic recessions. Over the years, it has ridden out bumps in the stock market and has shown low correlation to more traditional assets like equities and bonds.
When it comes to diversifying your portfolio, art should be seen as an attractive alternative proposition for investors. Contemporary art in particular is an effective diversifier: compared to other older periods, the contemporary art market is generally much more liquid, with greater frequency of trading and new supply coming onto the market every day.
Is there a different way to invest in art?
Mintus is opening the high-value art market to investors across the UK, Europe and beyond. Mintus is the first company specialising in art investments to be authorised by the Financial Conduct Authority. Our platform will allow people to invest in a market that didn’t exist before – a market for assets backed by real, physical art.
Buying shares in exceptional art
Mintus selects investment-quality art by artists with international appeal (more on this in later blogs). Using factors such as a sustained auction track record and recent price velocity, individual pieces or collections are then chosen to be listed on the Mintus platform. Qualified investors can then reserve shares in these investments. Costs of appraising, listing, storing and insuring the art are included and amount to less than 10% of the investment.
Once a particular piece is fully funded, the art is held in a privately controlled, bonded warehouse. Investors receive updated valuations every 12 months.
Investing in art is a medium-term investment, not a daily trade
Mintus advises investors that their shares will be held for between two and seven years, after which time the painting will be sold on – either by auction or private sale. The exact timing will be based on data-driven market insights, and the proceeds will be distributed to investors according to their shareholding. Mintus watches the market closely and continuously explores sales opportunities on a rolling basis.
What are the benefits of this kind of alternative investment?
This is a new way for investors to access the $65 billion art market at the highest-level – one that is easy to navigate, capitalises on industry-specific expertise, and is authorised by the FCA.
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