One for All: The Best Art Investment Funds in 2022
Investing in blue-chip art has always been all for one, but now anyone can become a patron of the arts by investing in art funds.
Published Mar 8, 2022•Updated Aug 9, 2022
When the stock market wanes and inflation is on the rise, more investors seek financial certainty in art investing. Art prices are going up and the market has never been more expensive, but art investment funds are phasing out high barriers of entry to make investing in art more accessible.
While the art game seems to be exclusive, many portfolio managers have come to their financial senses and realized that it isn't zero-sum. Today's investors are looking for ways to add alternative assets to their portfolios, and art investment funds have begun exploring ways to attract retail investors looking to dip their toes in the water.
Today, art is considered a legitimate asset class—one that can even beat the stock market.
So investors looking to gain exposure to blue-chip art should consider art investment funds—here's what you need to know about them.
What are art investment funds?
What are art investment funds?
Traditionally, art investment funds are privately managed art portfolios where a team of experts buy, store and sell paintings for a profit, some of which is passed on to investors. Art investors usually look for a trustworthy team of sophisticated connoisseurs who know the ins and outs of a historically shady market to manage their portfolios. However, the most reputable art advisors often also screen their potential investors through a formal application process.
Things have changed since then. Today, art is considered a legitimate asset class—one that can even beat the stock market.
Sotheby's Mei Moses All Art Index, which tracks artworks with repeat sales, has kept pace with the S&P 500 over the past 100 years and experienced less volatility over that period. Additionally, art funds are finding new ways to attract retail investors.
Many art investment funds have begun exploring securitized art as a way to make art investments more accessible. This means art investing is becoming more like stock trading where art is represented by shares that anyone can buy or sell. However, those looking at a major art investment should consider the benefits of investing in old-school private art funds.
Who can invest in art funds?
Who can invest in art funds?
Most major legacy art funds have a formal application process where investors are interviewed, similar to how a financial advisor screens their clients. This often poses an obstacle to retail investors that don't meet the scrutiny of the portfolio managers, so many have turned to public art investment funds and alternative investment platforms like Yieldsteet and Masterworks that let nearly anyone invest in art.
Securitized art is a popular way for retail investors to add art to their portfolio because all the extraneous costs are baked in, and they take the advantage of higher liquidity on the secondary market. This allows investors to diversify their art portfolio like never before and often exit their investment with more ease than they otherwise could.
What's your style?
DIY or let the experts handle it?
Top-performing art investment funds
Top-performing art investment funds
From major art fund managers to alternative investment platforms, there are more ways to invest in art than ever before. These are some of the best art investment fund, whether or not you're an accredited investor—there's a way to invest in art that works for everyone.
Artmeundi is one of the best-performing international art fund management firms. Artmeundi's team of global experts has managed dozens of funds worth billions of dollars in art since 1989. Artmeundi's several private funds have over $100 million in combined assets under management, but public offerings like their 2010 Global Fund had a net return of 85% over five years with shares starting at $500.
Artmeundi is also transitioning from fractionalized art shares to securitized art tokens with the adoption of blockchain technology. This could allow for higher liquidity and increased speculation in the blue-chip art market and create arbitrage opportunities for investors. The first Artmeundi fund to utilize Art Security Tokens is The Guernica V. Fund, which was created to meet the growing demand for art investment during the pandemic.
Anthea Art Investments
Another one to consider is Anthea Art Investments, a Swiss advisory boutique for investing and managing post-war and contemporary art. The firm prides itself on excellent expertise and an extensive network of art industry contacts. Anthea's art collection management team specialties in investing in high-end works by established and up-and-coming artists to optimize for long-term appreciation.
The fund currently on offer to investors is a diverse growth-focused contemporary art portfolio structured for complete tax neutrality (taxes on alternative assets vary by jurisdiction). Anthea regularly auctions blue-chip art for tens of millions of dollars by some of the best artists to invest in—like Warhol, Basquiat, and van Gogh—and manages an extensive privately-funded portfolio of international works by modern and contemporary artists. Prospective art investors looking for a discreet foreign fund should consider Anthea.
The Fine Art Group
Next, The Fine Art Group is a firm that provides financial services such as appraisals and sales for fine art and jewelry investors. They offer a diversity of art investment opportunities including private accounts and pooled investment funds as well art finance services like advising and secured loans for collectors. The Fine Art Group's in-house expertise includes everything from art advisors, loan underwriters, legal services, to logistics and they run a tight ship.
Aside from The Fine Art Group's core services, they also manage their own collections as well as those of high-profile clients. The firm is also expanding its network of art experts because they acquired Pall Mall Art Advisors last year. This growth and their 20-year track record of billions of dollars in assets under management show that the Group is one of the top choices for art investors.
Those looking for a more innovative art investment should consider the quantitative art investment firm Arthena. Arthena's art investment funds are managed using artificial intelligence that takes data like auction records and sale history as well as features like artist name, dimensions of work, and date of creation to generate statistical models that project the value of an artwork over time. Basically, Arthena is able to use math to optimize the return on investment and volatility of art investments.
For over four years, Arthena's proprietary analysis model has secured data on $95 billion worth of assets, which is roughly a quarter of the entire art market. While these rigorous methods are extremely informative to art investors, they are only a complementary tool for producing better art investment outcomes because they're not 100% certain. Arthena regularly publishes reports on the art investment market within the context of the global economy and they've garnered strong venture capital support, so their fund may be something investors should look out for if they're looking for a different art investment approach.
Yieldstreet is a platform that gives investors access to passive income opportunities by investing in portfolios of alternative asset classes like commercial finance and real estate. Investors can also gain exposure to art through Yieldstreet's diversified alternative asset portfolio like the Prism Fund or through a specialized fund like the Art Equity Fund II. Yieldstreet is great for investors that are on the cusp of experimenting with art investment funds.
Investors who desire minimal exposure to the art market should consider the highly diversified Prism Fund, but those interested in a more significant art investment that capitalizes on long-term gains over immediate returns would prefer the Art Equity Fund II. The Art Equity Fund II is structured similarly to a traditional art investment fund but focuses on just 10-20 works by historically underrepresented artists inspired by the Harlem Renaissance. Investors in this art fund can expect 13% to 17% annualized returns over three to five years.
The first alternative investment platform to formally securitize art is Masterworks. Masterworks lets investors buy fractional shares of blue-chip artworks which they transport, insure and store for a fee. Shares usually start at $20 and investors can trade their shares on Masterwork's secondary market after the initial offering. Masterworks is the easiest and most accessible way to invest directly in art as the underlying asset.
Masterworks is technically not an art fund because they let investors choose which paintings to add to their portfolio. Rather, it's more like an art stock market where Masterworks is both the broker that investors pay for not having to deal with the physical artwork and the company that creates value for stakeholders by ultimately selling the underlying asset and passing on the profits. Masterworks is currently the only company offering SEC-registered art securities, which is peace of mind if you own one eight-hundredth of a Basquiat. Investors who want to invest directly in the work of a particular artist should consider signing up for Masterworks.