- Yieldstreet is launching a fund to allow retail investors to shop across a portfolio of artworks, aiming to capitalize on rising prices and demand for fine art.
- The fund is the latest in a series of start-ups and new businesses that allow consumers to invest in art and collectibles by purchasing small ownership portions.
- The Art Equity Fund is a collection of funds that will each hold a portfolio of works by major post-war and contemporary artists.
Yieldstreet is launching a fund to allow retail investors to shop across a portfolio of artworks, aiming to capitalize on rising prices and demand for fine art.
The fund is the latest in a series of start-ups and new businesses that allow consumers to invest in art and collectibles by purchasing small ownership portions. While art investment funds have existed for decades, the new generation of funds use advanced databases, digital platforms and artificial intelligence to better buy and sell actions that will yield value. Masterworks, which secures individual images and allows investors to purchase shares for $20, recently announced a funding round at a valuation of $1 billion.
Yieldstreet announced Friday the launch of The Art Equity Fund, a series of funds that will each hold a portfolio of works by major post-war and contemporary artists. The first fund, which will likely cost less than $10 million, will include the works of George Kondo, Keith Haring and Kenny Scharf. The company said that Future Funds will partner with art experts to offer a variety of periods and styles.
YieldStreet, which gives retail investors the opportunity to invest in a range of properties typically reserved for the wealthy, owns Athena Art Finance, which makes art loans and advises YieldStreet on its art investment funds. Yeldstreet said it will use Athena’s own years of proprietary data and research to identify the best works by top artists most likely to see higher prices.
According to Rebecca Fine, managing director and head of arts finance at Yieldstreet and Athena Art Finance, the fund will aim for a return of between 15% and 17% net of fees. The minimum investment in the fund will be $10,000. The holding period will be for five years, with two one-year extensions.
“We have developed so much trust and confidence in our lending model that this is the organic next step in the segment,” Fine said.
The challenge for art funds will be whether they can profit reliably in a market that is notoriously opaque and cyclical. Over the past decade, several indices that measure art prices have outperformed the S&P 500. Yet as low interest rates, massive wealth creation during the pandemic and the rise of young collectors have fueled a recent art boom, it is unclear how long this will last.
Most collectors prefer to buy art to put it on their walls rather than just buying it for profit. Fine said that while details are still in development, the company is planning events where investors can view artworks and learn more about collecting from art experts and artists.
“The experiential aspect will be a big part of the platform,” Fine said. “Ideally we’re hoping to inspire them to not only invest, but to buy physical art and build their own collections.”