Yieldstreet has launched an Art Equity Fund that aims to give retail investors the same investment opportunity to diversify their portfolios by adding art as an asset class, as has long been practiced by high-net-worth individuals for years.
“Many investors have grown frustrated at the stubbornly low-yield environment we’ve been in for the last decade and have looked to alternatives to help generate above-public market returns,” said Michael Weisz, co-founder and president of Yieldstreet. “However, not all investors can afford to lock-up capital for some of the durations needed to extract the private market’s premium. We hope this new liquidity option enables new investors to become more confident knowing their alternative investments will be more liquid.”
The Art Equity Fund will provide investors an opportunity to invest in a diversified pool of blue-chip and mid-career post war and contemporary artworks, including pieces by George Condo, Keith Haring and Kenny Scharf.
Over the past decade, many other indexes that measure art prices have beaten the S&P 500, according to CNBC.
Yieldstreet has been involved in the art market since it acquired Athena Art Finance Corp., a specialty lender in the fine art market, from The Carlyle Group for $170 million in 2019. Athena was founded in 2015 and by Carlyle Group along with individual investors (one of whom is Olivier Sarkozy, the half-brother of the former president of France), according to a TechCrunch report. Yieldstreet said that to date, Athena has racked up cumulative originations totaling some $225 million and, strikingly, no realized credit losses. Athena will continue to be led by Cynthia Sachs under Yieldstreet.
Art finance is a huge business that has grown as the mean price of top-quality works continues to inflate and sales volumes continue to grow. A recent report put the global art finance market at $20 billion annually, says TechCrunch, the majority of that being secured by individuals rather than organizations or businesses.
Yieldstreet’s business is built on a platform for people to put up financing for alternative investments in areas that are generally showing very strong returns, but which are typically not traded on public markets and have traditionally been open only to a small group of top investors, a business that has grown to 100,000 users over the years.
Andrea Zander is website content editor at Institutional Real Estate, Inc.