Every day, Merlin Evans and Gloris Allkja, our Client Success team, speak to our investors far and wide, answering the various queries that naturally arise when making significant investment decisions.
We've taken the time to address our top five most common questions we receive from fund managers, wealth managers, and qualified investors. From "How is the investment structured?" to "What makes art a good investment?", Merlin and Gloris have got you covered with valuable insights and answers. So, sit back, relax and let's dive into the world of investing with Mintus:
What makes art an interesting asset class?
Art investment is often an entirely new venture for our clients, especially in the ‘blue-chip’ bracket, and so benefits of investing in art can often be missed. So, what makes art interesting as an investment? The answer is simple: High and uncorrelated returns.
Since 2000, the top end of the art market grew year-on-year by an average of 8.9%. The S&P 500, in that same period, grew on average by 4.2% year-on-year, and so, when looking at this 22-year period as a whole, the top end of the art market outperformed the S&P by 449% (ArtPrice 100 Index, 2023).
Further still, art is, more or less, uncorrelated to any other asset classes. In fact, a 2022 report published by Citibank outlined art’s correlation to ‘traditional’ asset classes and it found that art’s correlation to developed market equities, like the FTSE, S&P 500, etc. was a -0.04, so effectively no correlation at all (Citibank, Global Art Market Disruption, 2022, fig. 4).
As a result, art can be a strategic asset that counteracts market volatility, hedges for inflation and provide an extra level of diversification that investors are always searching for.
How does it all work?
At Mintus, we believe in providing our clients with a transparent and streamlined investment process. That's why we structure our art investments through a company structure.
When we find an artwork that we believe represents good investment potential and fits our investment metrics, we negotiate a price point and conduct an independent appraisal to determine the fair market value of the artwork. If it passes our rigorous selection process, we then transfer the rights for the artwork to our fund vehicle.
This means that each offered artwork is set up as its own company, with the artwork and associated investment funds as the only assets. Investors then buy shares in this company, providing investors with a familiar and transparent structure. When the artwork is sold, the company is dissolved, and investors receive their returns deposited back into their Mintus wallet, from which you can withdraw your funds to a bank account or reinvest – whatever is best for you.
Who makes the decisions on what to buy and when to sell?
Mintus is FCA regulated, with a team of experts managing the investment process. Our Art Investment Committee is made up of experienced professionals who have a deep understanding of the art world and use their expertise to select the best, highly curated pieces for our platform.
Brett Gorvy – was the former Global Chairman of Christie’s auction house who acts as our Chief Curator and Chair of the Investment Committee. He co-founded the Lévy Gorvy gallery in 2017, and more recently the LGDR gallery partnership in 2022. He is regarded as one of the leading forces and influencers in the art market.
Jonathan Massey – has over 30 years’ experience in the art market. A current Mintus Advisor and member of the Art Investment Committee, he was formerly a Senior Director at Sotheby’s before working as Chief Operating Officer at Gurr Johns, the world-leading international art advisors.
Stellan Holm - Stellan is an advisor to the Art Investment Committee, with over 30 years’ experience working as an art dealer and gallery owner.
Vedat Mizrahi – Mintus’s CFO and Chief Economist, Vedat was with Deutsche Bank as an investment banker for over 12 years. He then joined Bank J. Safra Sarasin's Wealth Management team. Vedat has a PhD in Finance and has been lecturing in Corporate Finance and Valuations at King's College in London
Bevan Duncan - Bevan previously ran the Strategic Equity division at Gresham House. Prior to working at Gresham House, he was at leading mid-market private equity firm, Livingbridge.
Beyond the in-house expertise, we’ve built a network of trusted advisors, specialists, and art market professionals, who are consulted at both the sourcing and exit stages of the investment.
How long is the holding period?
The estimated holding period for our investments is typically 2-7 years. While Mintus does solicit offers for our artworks from day-one, we believe 2-7 is not only enough time for the artwork to not only appreciate in value, but also gives Mintus the capacity to ride out any volatility in market and wait for an offer we deem suitable to come in, at which point we’ll work to sell the artwork accordingly.
Mintus is also planning a secondary market which will function as a bulletin board with investors conducting privately negotiated transfer of shares. This is designed to give investors the possibility of uncovering some liquidity throughout the normal life cycle of the investment.
What are the fees?
At Mintus, we believe in transparent and fair pricing. Our fees are designed to provide you with the best value for your investment by front-loading and capitalising them within the listing price. This covers insurance, storage, transportation and logistics, and all other management and overhead costs. This means that throughout the holding period, Mintus does not charge any additional fees and does not dilute any investor’s shares.
Mintus will charge a 1% exit fee, and a 20% performance fee when the artwork is sold. This means that Mintus’s interests are completely aligned with investors. We’re looking to sell our artworks as soon as possible, for the highest price possible.
All of our fees are clearly noted in our standardised Key Information Documents (KIDs) and Information Memorandum, all of which can be seen, downloaded, shared, printed, emailed, made into a paper boat, or whatever other else you can think of…
If you want to learn more, feel free to get in touch with Merlin and Gloris by scheduling a call.