What is Masterworks?

Jeremy BiberdorfBy: Jeremy Biberdorf

April 18, 2023April 18, 2023


Masterworks is an innovative alternative investment platform that offers individual investors access to the high-end art market, traditionally reserved for wealthy investors. Masterworks specializes in the acquisition, management, and sale of blue-chip artwork, providing investors with fractional shares in these valuable assets. In this article, we will provide an overview of Masterworks, touching on its unique features, offerings, and key elements that make it stand out from other investment platforms.
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Company Background: The Story Behind Masterworks

Masterworks was founded in 2017 by Scott Lynn, an entrepreneur and art collector with a mission to democratize the art market and make it accessible to everyday investors. By offering fractional ownership in high-value pieces of art, Masterworks has opened the doors to an alternative asset class that has historically provided strong returns, often outperforming traditional investments like stocks and real estate.

Since its inception, Masterworks has acquired millions of dollars’ worth of blue-chip artwork from renowned artists, including Pablo Picasso, Jean-Michel Basquiat, and Banksy. The company aims to hold these valuable art pieces for 3-10 years, allowing investors to benefit from the potential appreciation of their shares.

Masterworks: A Unique Alternative Investment Platform

Masterworks offers an investment opportunity in the art market that was previously available only to hedge funds and wealthy investors. The platform allows individual investors to purchase fractional shares of artwork, providing them with a diversified investment portfolio that includes alternative assets.

The company focuses on blue-chip artwork, which refers to pieces created by well-established artists with a proven track record in the market. These contemporary artworks are typically characterized by their high value and strong historical performance, offering investors the potential for significant returns.

Investment Accounts and Offerings

Masterworks requires a minimum investment of $1,000, making it accessible to a wide range of investors. Potential investors must first review the offering circular, which contains detailed information about the art piece and its purchase price, as well as the investment structure and fee schedule.

Once the initial investment is made, investors receive fractional shares of the artwork, which are managed and stored by Masterworks experts. The platform also provides a secondary market for investors to trade their shares, offering liquidity and the opportunity to exit their investment before the art piece is sold.

Fees and Expenses

Masterworks operates with a transparent fee structure, charging a 1.5% annual management fee to cover the costs of storage, insurance, and maintenance of the artwork. Additionally, the company charges a 20% performance fee on any profits generated upon the sale of the art piece.

It’s important to note that while Masterworks does not charge any fees for buying or selling shares on the secondary market, the platform does take a small percentage of the sale price as a transaction fee.

Responsible Investing and Customer Support

Masterworks is committed to responsible investing and providing exceptional customer service to its clients. The platform’s team of art market experts meticulously researches and selects the pieces of artwork for acquisition, ensuring that investors have access to high-quality assets with strong growth potential.

In addition to its art investment platform, Masterworks offers a mobile app that allows investors to track the performance of their investments and manage their portfolio on the go. The company also provides educational resources and personalized support to help investors make informed decisions about their investments in the art market.

Who is Masterworks Best For?

Masterworks is designed to cater to a wide range of investors, from beginners to seasoned professionals. The platform is particularly attractive for those who are interested in diversifying their investment portfolios and exploring alternative asset classes. Here are some categories of investors who may find Masterworks appealing:

  • Alternative Asset Seekers: Investors looking to diversify their portfolios with alternative investments will find Masterworks a valuable addition. By providing access to the high-end art market, the platform offers an asset class that has historically demonstrated strong returns and low correlation to traditional investments.
  • Art Enthusiasts: Masterworks is an excellent choice for art enthusiasts who are not only passionate about the art world but also interested in potentially profiting from their passion. With a curated selection of blue-chip artworks, investors can gain exposure to the appreciation of some of the most sought-after pieces by renowned artists.
  • Long-term Investors: Masterworks is suitable for those who have a long-term investment horizon. Since the platform targets a holding period of 3-10 years for the acquired artwork, investors should be prepared to keep their capital invested for an extended period to fully realize the potential appreciation of the assets.
  • Risk-tolerant Investors: While the high-end art market has demonstrated strong historical returns, it’s important to note that the value of individual pieces can be subject to fluctuations and unpredictability. Masterworks may be best suited for investors with a higher risk tolerance who are willing to accept the potential for short-term volatility in exchange for long-term gains.
  • Tech-savvy Investors: The Masterworks platform and mobile app make it easy for tech-savvy investors to manage their investments and access valuable information about the art market. With a user-friendly interface and comprehensive resources, investors can easily track their portfolio performance and stay updated on the latest art market trends.

Masterworks is an attractive investment option for those who want to diversify their portfolios with an alternative asset class, have a long-term investment horizon, and possess an interest in the art world. With a transparent fee structure, robust customer support, and access to the high-end art market, Masterworks offers a unique opportunity for a wide range of investors to benefit from the potential appreciation of blue-chip artwork.

Masterworks: An Accessible Art Investment Platform

Masterworks has successfully created a unique and accessible art investment platform, allowing everyday investors to participate in the high-end art market. By offering fractional ownership in blue-chip artwork, the platform provides investors with a diversified investment portfolio and the potential for strong returns.

With its commitment to responsible investing, exceptional customer service, and transparency, Masterworks has established itself as a legitimate company in the alternative investment space. The platform’s focus on blue-chip art and its user-friendly interface make it an attractive option for investors seeking exposure to this historically high-performing asset class.

What is Masterworks? – Final Thoughts

If you’re looking for a unique investment opportunity in the art market, Masterworks is definitely worth considering. The platform’s focus on blue-chip artwork, transparent fee structure, and strong customer support make it an appealing choice for investors interested in diversifying their portfolios with alternative assets.

As with any investment, it’s essential to conduct thorough research and consider the risks involved before making a decision. However, Masterworks offers a compelling option for those seeking to invest in the art market and potentially benefit from the appreciation of high-value pieces of art. Click here to start with Masterworks today.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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