How You Can Invest In A Small Piece Of A Famous Work Of Art

Published: Wednesday, October 10, 2018 - 12:18pm
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What if you could own a Picasso? Or are you more of a fan of Jean-Michel Basquiat? To own a work of his, you’ll need just a little over $110 million, which is what his work sold for at Sotheby’s in 2017. But what if you could own a major work of art for a lot less, but never actually see it? That’s the idea around a new company called Masterworks.

The idea here is that Masterworks buys art at auction, then creates a holding company for that art registered with SEC — like a stock or bond would be — then they sell shares of that company to investors.

So for, say, $1,000 you can own a very small bit of a Basquiat, or pony up $10,000 and you’ll get yourself a lot bigger chunk of the work — metaphorically, that is.

Welcome to the world where art is an investment product.

Scott Lynn is the founder of Masterworks, and he said the reception for his concept has been positive, but it’s not necessarily because of the love for art. So who is investing in these tiny pieces of art? And does a Picasso hold up as well as a mutual fund?

Lynn said the returns aren’t bad, but beyond price tags and dollar signs, he said the idea has art curators excited too.

Lynn’s point of view, however, isn’t shared by The Show's next guest, Arthur Korteweg, an associate professor of finance and business economics at the University of Southern California. He does say, though, a potential benefit of investing in art is diversifying an investment portfolio.

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