A stock exchange for modern art will start in Liechtenstein next month. Artex, the company behind the exchange, is starting to sell shares in the painting Three studies for a portrait of George Dyer by the Irish painter Francis Bacon.
The painting has an estimated value of $55 million. Those interested can buy shares in the painting for $100 each. For that money someone becomes co-owner of an iconic painting.
Co-owner, not owner. Impressing friends or family with a real Bacon on the wall is not an option. The painting does not come home to hang on the wall. The painting, incidentally a triptych, remains in a museum where everyone can enjoy it.
The idea behind the fair is that the common man should also be able to benefit from the increase in the value of art. Now that is only reserved for the super rich, who can pay tens or hundreds of millions for masterpieces.
This has benefited the rich. Art has turned out to be a stable investment. Since 1972, modern art has made an annual return of 8 percent.
Growth slowed down
The only question is whether now is the right time to get in. The growth of the art market seems to have passed its peak. The Bacon that is now going public was purchased in 2017 for $52 million. With an estimated proceeds of 55 million from the IPO, that is a modest increase in value.
Critics point out that the art market has mainly benefited from the low interest rates. For years, investors were looking for investments that yielded returns, because bonds were hard to earn. Art was one of the alternative investments into which billions went.
But now the low interest and cheap money have come to an end. Investors can also make returns with boring bonds. So the question is whether investors who get in now are not buying at the peak of the market.
Artex is not the first company to enable private individuals to become co-owners of modern art. Masterworks has been offering this option for some time. Last year they made another hit with a work of art by Banksy that had increased in value by 32 percent within a year.
The difference between the companies is that Artex is a regulated exchange, which is supervised by the financial authorities. The founders of Artex, including Prince Wenceslas of Liechtenstein, emphasize that it is a transparent market with investor protection.
Artex will receive 3 percent of the proceeds from the IPO and will earn further from each share transaction on the stock exchange. If the flotation is a success, Artex wants to bring more paintings to the stock exchange. The company is aiming for the large number of works of art that are still privately owned. Selling through an IPO is cheaper than through an auction. Those who prefer to own a Picasso, therefore have to be patient.
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2023-06-27 14:00:27
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