Masterworks, a fractional art investing platform, has shown that investing in art can be profitable. The recent sale of a Jean-Michel Basquiat painting highlights this, with Masterworks distributing over $60 million in proceeds through more than 15,000 payouts to investors.
Contemporary art has held its value through market fluctuations. From 1995 to 2020, it delivered an average yearly return of 14.1%, compared to the S&P 500's 9.9%.
Basquiat’s "El Gran Espectaculo (The Nile)" sold for $67.1 million at Christie's in New York after an intense five-minute bidding war. The $67 million sale is Masterworks' 23rd successful exit, and their investors see an impressive average annual return of 21.5%.
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It’s also just one of Masterworks' success stories over the years. Monet's painting, titled "Le Bassin aux Nimpheas" (Water Lilly Pond), which had been in a private collection for 50 years, sold for $74 million at an auction last year.
Masterworks makes it simple for anyone to invest in valuable art pieces, much like buying shares in a company. They search the art market for valuable and potentially high-return artworks. They buy pieces from famous artists like Basquiat, Picasso, and Warhol.
Once they acquire a piece of art, they split the ownership into smaller shares. This way, instead of needing millions to buy an entire painting, you can invest in a fraction of it for a much smaller amount.
Masterworks holds onto the artwork until it is worth selling, aiming for the best possible return. During this time, the value of your shares can increase based on the market value of the artwork.
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When Masterworks sells the artwork, it distributes the proceeds among the shareholders. For example, if you own shares in a painting that sells for a profit, you get your share of the sale, which could be more than what you originally invested.
After receiving their payout, many investors reinvest in new offerings frequently available on the platform, which allows them to continually grow their investment portfolio within the art market.
As of June 2024, the platform has more than 940,000 members, 419 artworks purchased and almost $1 billion in assets under management.
If you’re interested in investing in art at a fraction of the cost, Masterworks allows you to invest in artists such as Monet, Warhol, Banksy, Basquiat and many others.
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