By Trolljegeren10
About 7 months ago, YieldStreet, a rapidly expanding investment platform acquired Athena Art Finance, a company providing loans collateralized by artwork to art collectors and dealers. They basically buy people’s art for up to five years, and loan them 50% of the arts appraised value.
Athena was founded in 2015 to help art collectors and dealers grow the collections and serving the needs of the global art market. They have become one of the most active providers of finance in the art world, helping dealers, galleries and collectors secure fine art.
Art finance has grown into its own industry, investing and selling art for millions of dollars a year, and have made a big impact on the art marked throughout the years. But unfortunately, a vast majority of the finances that goes to private clients lending away their art in exchange for a loan, reinvest the money into non-art assets. This could eventually create a huge problem, as the industry’s cash flow minimizes, and there’s not enough assets being reinvested back into the industry.
After YieldStreet’s acquisition of Athena, they’ve also stated that one of their biggest missions for the company is to democratize quality investments in arenas that usually aren’t available to most people. But, pursuing a high net-worth art clientele simultaneously to working towards democratizing investments, is not the best fit. The art industry is stagnating, and reinvesting money that originally was invested into the art industry into other fields, doesn’t exactly help.
Financing art is an attractive asset class, and usually have low correlation to the stock market and the question is, should it stay that way? Because the world of art and how to finance it has developed into extremely rich people investing in their own private art collections. Which absolutely isn’t a bad thing. The question is, do they invest in art because it’s smart to keep a portion of their wealth in art, or because they’re interested in helping the industry grow and sustain? Because private wealth managers advise their clients to invest in art, because it’s a smart way of holding its value during potential economic crisis, and this is where the conflict occurs. Should people always have the right intentions when investing in for example art, or is any investment, a good investment?
Making sense of art and design industries 