Asset tokenisation. Fractional ownership. Hedging. Derivatives. The terms and processes of the money world are increasingly washing into the art market, as financiers and tech wizards seek ways of cashing in on the enormous profits that, they say, can be generated by art.
Over the past year or so, a growing number of new investment platforms are touting “fractional ownership”, or tokenisation of art, most using blockchain technology, to allow the small investor to own a tiny part of a work of art. The idea is that dividing ownership of an asset (in this case a work of art) and selling it via tokens, leads to greater liquidity in the marketplace and enables the small investor to share in price rises.
The pitches from these start-ups all emphasise what they say is a freeing up of the art world. “Opening the doors to top-tier, A-class art investment” promises Masterworks. Maecenas will “democratise access to fine art”. Look Lateral “makes the market more transparent, accessible and liquid”. “Everyone can be part of the game” proclaims Feral Horses.
The approaches vary. Feral Horses sells shares in art they select themselves. Masterworks plans to buy works of art at auction and then sell shares in them. On resale, the investors split any profits. Read more