Buying Shares of Masterpieces May be the Next Big Thing
For art lovers everywhere, the feeling of gazing at a Picasso, or a Monet, and wishing you could own it is a familiar one; and for the vast majority of us, that feeling is likely to stay in the realm of the theoretical due to astronomical prices. But, what if you could buy shares in that masterpiece? When it was sold, you would receive proceeds based on your share. Well, that might be the next best thing to owning the whole artwork.
That’s the general idea behind Takung Art, a Hong Kong-based online trading platform for acquiring shared ownership of Asian art, jewelry and precious gems that was founded in 2013. Those who invest in art through Takung are prepared to wait a while to see value. Owners of shares must wait until a 10-year period has expired and their artwork gets sold. They must also be prepared to pay a fee and a trading commission to the platform in order to make use of it.
Perhaps surprisingly for a company that will only produce profits in 2023, Takung is performing verywell. The company reported revenue of $11 million in 2015, an increase of 14% from $4.7 million the previous year, according to their website. In 2016, the company once again delivered exponential growth.
Those who believe in this model are already singing its praises. “We all want an easy, safe place to earn money. Here I know my assets are safe, and for a long time,” Zhou, a 37-year old who invested $61,000 through Takung, told Reuters last year.
So, could this be the wave the future? For the time being, Takung is popular mostly with those interested in Asian art, but it is likely that this model will be adopted to and adapted for the general market. Already, online auction houses such as Artsy and Paddle8 are gaining momentum. So buyers are becoming more comfortable with buying online, which is a key component to the future success of such a model.
Another likely factor in its future growth is today’s uneasy economy. Many investment groups are increasingly tired of underperforming equities. Investing in art through investment groups/funds that incorporate the Takung model will allow them to protect their assets and hedge against future financial storms. Although it is too early to predict, it is likely such a model will flourish as large numbers of buyers become involved at the top levels of investing in the art market.
By Rayah Levy, Art Market Expert
Mutual Art June 9, 2016:
http://www.mutualart.com/OpenArticle/Buying-Shares-of-Masterpieces-May-be-the/6B11D5B34F80817B/
