We all have our opinions about art (even if that opinion is justI dont get it) but what about art as an investment?
Arthena, which is part of the current batch of startups atY Combinator, says it can help investors make money reliably from art. Founder and CEO Madelaine DAngelo said Arthenafirst launched as an equity crowdfunding platform for purchasing art.More recently, its added financial tools to create accommodate that quantitative strategy for the art market.
Specifically, Arthena looks at factors like a worksartist, their career and the year of creation, then combines that with analysis of art auction results to predict a pieces likely risk and return on investment. This analysis allows investors to put money into different Arthena funds based on their risk tolerance.
DAngelo said Arthena built these tools out of necessity, because wealth managers and other big investors were interested in participating but first, Arthena needed to providethe same level of analysis as hedge funds.
DAngelo acknowledged that the art world might be skeptical of Arthenas numbers-based approach, but she said the company will always have a human in the loop to help finalize these decisions. She also said that her goal isnt to cheapen the work of art buyers or artists, but rather to add volume to the market.
Collecting and investing are two completely separate activities, she said. Its very hard to separate that emotional aspect. When youre looking at it from a non-mathematically-driven pointof view, you can miss really great opportunities in market. Or you might overpay for something that youre attached to.
Why invest in art at all? DAngelo said the art marketis appealing because it offers impressivereturns without being too tied to the ups and downs of the stock market.
Arthena says it candouble the art markets standard annual return of 10 percent. And there definitely seems to be interest on the investor side since the companyswitched to its current approach a few months ago, its received $20 million in commitments.
DAngelo also said that while the teams at other art startups usually come from just the art world or just the tech world, Arthena combines both, with DAngelos experience in art and her CTO/brother Michael DAngelos data science background, making them uniquely qualified to solve this problem.