ART AS AN INVESTMENT ASSET CLASS

It is estimated that the outstanding value of art and collectible wealth is in excess of USD 3 trillion; however, only a fraction of that value – averaging USD 66.4 billion annually over the last ten years 1 – is purchased, sold or traded in the global art market. 

A fundamental challenge in the growth of the global art market is that any investment-grade fine art piece – defined as valued north of USD 100,000 – has to be purchased and sold in its entirety, that is to say the price of art pieces is non-divisible. A prohibitive sticker price makes it difficult for average investors to not only afford the artwork, but also to liquidate their investment as well as manage their investment risk. 

What if ownership of a piece of art could be fractionalised, bought, and sold in a similar way to how shares of a public company are in the stock markets? It would open access to a much broader set of investors who have previously been reluctant to investing in art because of the market’s low liquidity coupled with its lofty entry price.