A European startup, ARTEX, said today it has received a license for the "world's first" art shares exchange, opening the door for investors and art lovers to own a small piece of their favourite paintings or sculptures.
Shares in works from “the world’s greatest masters” will be made available for investment in the coming weeks, said the Paris-based group, which aims to list more than €1bn worth of artwork on its exchange in the “coming quarters”.
Prices of shares are initially expected to sit at around €100 for works spanning from the Renaissance to the twentieth century, equal to some 500 years' worth of history.
It may be the first art equity exchange, but ARTEX will not be the first modern platform to allow investments in 'fractions' of notable artworks, as others have also launched in recent years to help retail investors tap into a global market for artwork that is estimated to be worth US$3.2 trillion and which, research has shown, provides lower volatility than stock markets and only slightly weaker returns over the long term.
Prince Wenceslas of Lichtenstein is the co-founder and chairman of ARTEX, and it may not be an unfair assumption that the exchange could feature some of the works in his family's collection, which is managed by the House of Lichtenstein’s LGT Bank and features some 1,600 paintings and sculptures, including from the likes of Peter Paul Rubens and Anthony van Dyck.
Works in museums and exhibitions are likely to feature too, with ARTEX reassuring that these will remain on public display.
“Operating a trading venue under one of the most demanding regulatory frameworks (the Financial Market Authority) in the world brings a high level of confidence,” said Goldman Sachs (NYSE:GS) alumni Wenceslas in a statement. “We look forward to the first listings and trading on ARTEX in the coming weeks.”
ARTEX chief executive Yassir Benjelloun, ex of BNP Paribas and UBS, said: “Our vision of democratising iconic art investment is finally becoming a reality […] allowing a new breed of art patrons, strong by millions, to not only invest in art but be invested in art itself.”
Like conventional stock markets, the art exchange will feature market makers, money agents, central securities deposits and ultimately the ability to buy and sell securities in the artwork.
London Stock Exchange Group PLC (LSE:LSEG), via its UnaVista arm, Bloomberg and Swiss clearing giant SIX Group are among those industry operators providing services to run the exchange, including information exchange, regulatory reporting and order management, while Rothschild & Co will act as financial advisor for the artwork IPOs.
Other art investment platforms
Although it claims to be the first exchange, the company is not breaking completely new ground, as investors can also invest in art on the Mintus platform, where as with shares it offers a chance to buy a 'fractionalised' piece of a masterpiece, though only operates a secondary market "periodically, to provide liquidity opportunities for investors in permitted locations".
It is run by Tamer Ozmen, a former Microsoft executive, who said: "Not many people can buy a £2mn work outright or know where to invest [in the art market]. The world has changed. The idea fits with the younger generation, and collectors in Asia, who are very comfortable with online bidding, for example.
Mintus art chief Nicky Clark, hired from Sotheby’s, explained that fractional ownership of art has opened it up to less rich investors, which also tied in with the trend in recent years for investors to seek alternative investment strategies to generate risk adjusted returns.
Before that, there was the US-based Masterworks platform, which was launched by collector Scott Lynn in 2017 and sources and actually purchases famous historical and contemporary art, which is then listed as an investment offer with the SEC, with shares sold at "hedge-fund steep" prices to qualified members of the public and ownership is recorded on the Ethereum blockchain.
No investor may purchase more than 10% of the shares in an individual artwork and there is a members-only gallery that shows parts of the collection, which is otherwise held in museum-style storage.