Surprisingly, there have been few attempts to syndicate major artworks for independent investors seeking portfolio diversification. This is partly due to the complexities of determining value and risk within a field not overly recognised for transparency or transactional integrity. By operating under the SEC regulatory framework, Masterworks offer a product fully disclosed in terms of its financial accounting and resource allocation. For many investors, that's the easiest part to evaluate. What follows is the serious business of determining which artwork is most likely to appreciate in value over the investment timespan, generally three to ten years. Since the art world is saturated with crystal ball gazers, dreamers, and charlatans, everything needs to be carefully filtered. Masterworks depend upon specialist researchers to identify strong opportunities for clients. Their selection criteria rule out the majority of available works, leaving only a small percentage as investment options. Within this, there are limitations on what's currently achievable. The high market value of absolute blue chip pieces by history making artists such as Jackson Pollock, Frida Kahlo, or Francis Bacon make them essentially unobtainable. This forces consideration of lower tier works, generally increasing speculation and risk.
Like many astute investors throughout history, Masterworks seek to anticipate the blue chip works of tomorrow by focusing on leading contemporary artists. That's a select group of mid to late career individuals with an established sales record, institutional credibility, and the essential buzz of public intrigue, popularity, and hype. Some like Cecily Brown or Pierre Soulages are strong in all attributes. Others like Banksy and Kaws tilt toward the latter. Whatever the eventual outcome for each artwork, Masterwork clients are encouraged to inform and educate themselves while following progress of their investment. This is facilitated by a secondary market of tradeable shares which give some indication of a works perceived value in real time. There are many cautions to observe here and like most art deals, not necessarily designed for the risk averse. On the positive side it presents an opportunity to be involved for a relatively modest outlay. What it cannot provide is the chance to possess a physical artwork. Anyone set on this might need to broaden their search to encompass artistic innovation and works from new and emerging markets.