How You Can Become an Art Investor

What Is Masterworks?

Alternative assets have become big business in the past couple years as public markets have grown frothier and investors look to chase bigger returns in less traditional markets. The alternative asset class is a diverse one, and among markets for mint condition N64 cartridges, Pokémon Cards, Air Jordans and NFTs, fine art occupies a more traditional segment of the class and one with more predictable upside and downside.


Masterworks is an investment company that helps you buy shares of fine art. The company offers a straightforward investment product that’s easy to understand and facilitates investing in the kinds of art previously available only to very wealthy investors.


The company was founded in 2017 by Scott Lynn in New York City. Masterworks’ mission is to make blue-chip artwork accessible by everyone, rather than limiting ownership to the rich. Masterworks is currently run by 50+ employees who have 75+ years of art curation experience, collectively.


Use Masterworks To Invest In Exclusive Blue-Chip Art

  • Invest In The Most Popular Blue-Chip Art
  • Art Investing Has Beaten The S&P 500 Since 2000
  • Buy Fractional Shares Of Art (Don’t Need Millions)
  • Choose From Artists Like Andy Warhol, Banksy And Basquiat
  • Buy And Sell Shares On Their Secondary Market


Why should you invest in art?

Let’s start with the basics:
Claude Monet - Masterworks
This is an example of price appreciation for Monet’s artwork.
Are the returns high? Yes.
Is it out of your price range? No.
Because Masterworks gives you a chance to invest in a fractional share of the artwork much like the new robo-advisor platforms that allow new investors to purchase fractional shares of stock. You don’t need big bucks to invest right away.
And, as many in the financial world will tell you, diversification should be a key part of your investing stategy. You don’t want all of your funds in one place. Masterworks gives you a new option for your portfolio.
Blue-chip art, as an asset class, has also performed better than the S&P 500 for the last two decades
Masterworks SP
That’s the beauty of artwork – it gets better with age.

How does Masterworks work?

One of the best perks about Masterworks is that you do not have to be an accredited investor through the SEC (Securities and Exchange Commission) to get started. The only thing you’ll need is to apply a minimum investment of $1,000 (which can be spread across multiple works of art).
To begin the application process, you’ll have to request an invitation to Masterworks (currently on waitlist). 
Masterworks Membership Screen
Once you apply for membership, you’ll receive a number and need to complete a phone interview to finalize your membership. This interview is conducted primarily to verify your identity.
After you become a member, you’ll have access to invest in Masterworks’ art collection. The company’s business model uses an advanced algorithm to determine top artists and collections to invest in, with a proven record of appreciation. When the company purchases a work of art, they register it with the SEC and begin issuing shares. Shares can be purchased in increments of $20, but no single investor can own more than 10% of the shares of a single work of art. Investors then make money when Masterworks sells the art piece and divvies up the net proceeds.
  • Masterworks purchases works of art from a list of artists determined by algorithms. It uses records from more than 1 million art auctions to pick top artists with proven histories of appreciation. Masterworks targets artworks where the artist demonstrates a historical 9% to 15% annual return.
  • Once it purchases the art, Masterworks registers the art with the SEC and issues shares in $20 increments. No individual investor can hold more than 10% of the shares of any specific work.
  • Masterworks holds the artwork and may even display it in the members-only gallery in New York City. It has a second office in Boulder, Colorado, but no gallery there.
  • Masterworks plans to sell most of the artworks in around five to 10 years. Potential buyers make an offer that must be approved by a majority shareholder vote.
  • When the art sells, the proceeds are divided among the pool of investors. Masterworks takes 20% of the profits as a fee.
  • If you want to get out early, you can sell on Masterworks secondary market. Or you can buy shares of an artwork that is being sold on the secondary market, which you can view on their website.
  • To research artists and investment prospects, members and the public can view a free database and blog on the Masterworks website.

How much does Masterworks cost?

Like all investment opportunities, it’s important to understand the fee structure before making a commitment. Masterworks fees are similar to investing with hedge funds.
Masterworks does not charge a signup fee but does require a minimum investment of $1,000. The platform also charges a 1.5% annual management fee for all members, which is used to cover transportation, storage, insurance, and administrative expenses. This can be paid with a debit or credit card.
When a painting appreciates and sells, Masterworks charges a 20% commission on any profit gained. While this percentage is admittedly high, it does indicate that Masterworks seeks to only buy a piece of artwork that is likely to appreciate, as they stand to gain a profit from each sale. Despite the slightly high commission percentage, Masterworks clearly stands by their process and is not in the market of ripping off investors — they only profit if you do.

Masterworks features

  • Specific artwork selection. If you’re a lover of the arts or think traditional investing is a bit dry or uninspiring, Masterworks might offer a much more enjoyable experience. Not only can you invest in a wide selection of classic and highly regarded works of art — you also get to choose the specific artwork you invest in and can become a partial owner of a piece of art.
  • Helpful art sales and research reports. Masterworks provides plenty of data on each selection of artwork, making it easier for you to invest in lucrative art pieces. The company provides auction sales report data for any art pieces that were sent to auction, as well as general global art reports recapping the current state of the art market and new art trends.
  • Protected investments. Masterworks makes sure your investments are secure, safe, and well-preserved, to ensure maximum appreciation at the time of sale. Masterworks keeps all of their artwork in a temperature-controlled, museum-quality art gallery. Your 1.5% annual fee helps cover the cost of your artwork’s preservation and safe-keeping.
  • Investor trading platform. Another key feature Masterworks provides is access to an investors trading platform, where you can buy or sell your shares using the company’s online bulletin board. If you aren’t prepared to wait for Masterworks to sell one of the pieces of art you own shares in, you can trade or sell using this method.
  • Cutting-edge algorithms. It’s in the company’s best interests to ensure your artwork appreciates, which means Masterworks only searches for the top artists and works available through the marketplace. By analyzing buying patterns, new trends, and previous historical appreciation rates, Masterworks is able to bring high performing artwork right to your fingertips.

Use Masterworks To Invest In Exclusive Blue-Chip Art

  • Invest In The Most Popular Blue-Chip Art
  • Art Investing Has Beaten The S&P 500 Since 2000
  • Buy Fractional Shares Of Art (Don’t Need Millions)
  • Choose From Artists Like Andy Warhol, Banksy And Basquiat
  • Buy And Sell Shares On Their Secondary Market