Masterworks is a platform that allows everyday investors to invest in fine art, making it possible to own a share of high-value artworks from renowned artists like Picasso, Monet, and Warhol. Launched in 2017 by Scott Lynn, the platform aims to democratize art investment, which has traditionally been accessible only to wealthy individuals. Masterworks purchases paintings and files them with the SEC as public offerings, similar to IPOs. Investors can then buy shares of these artworks for as little as $20 per share.
Masterworks claims that contemporary art investments have outperformed the S&P 500 over the past 25 years, offering a 14% annual return compared to the S&P 500’s 9.5%. However, the platform warns that past performance does not guarantee future success.
The platform currently has over 250,000 investors, most of whom are looking to diversify their investment portfolios. Masterworks charges a 1.5% annual management fee and takes 20% of any profits from an artwork’s sale. Investors can also trade shares in a secondary market recently added to the platform. It’s a long-term investment strategy, with artworks typically held for three to 10 years before being sold and the proceeds distributed among shareholders.
I made a $1K bet on a piece by Jean-Michel Basquiat back in October 2021. Since then, the estimated value of my investment has gone up by 17%. I will consider investing more funds and diversifying my Masterworks portfolio in the future.