00:00:04
Sean Aylmer: Welcome to the Fear & Greed Daily Interview, I'm Sean Aylmer. You might remember a while ago, we talked about a few unusual asset classes. There's a whole range of alternative assets out there, and we explored some of the more left- field ones, shall we say, from tequila and vinyl records to buying domain names. Today, we're going back to Stefan von Imhof, the co- founder of alternative investing community fund, alts. co, A-L-T-S.co, for a lesson on investing in art. Of course, this is general information only, and you should certainly seek professional advice before making any investment decisions. Stefan, welcome back to Fear & Greed.
00:00:43
Stefan von Imhof: Hey, great to be here again. Thank you.
00:00:44
Sean Aylmer: So why is art such an interesting space for investors, particularly at the moment?
00:00:50
Stefan von Imhof: Well, it's funny you mentioned left- field investments, and I'm not actually sure that art falls into the left field.
00:00:57
Sean Aylmer: True.
00:00:57
Stefan von Imhof: Depending on how you look at it. I think art is either the oldest new alternative investment or the newest old alternative.
00:01:06
Sean Aylmer: Right, yeah.
00:01:07
Stefan von Imhof: Kind of like right in the middle. So it has a lot of history. Wealthy investors have been collecting fine art for hundreds of years, but along with other alternative assets like farmland and wine and whiskey, there's been a Cambrian explosion of new platforms that allow retail investors to invest in fine art over the past four or five years. So it's definitely having a moment right now.
00:01:27
Sean Aylmer: Okay. So what's considered, I suppose, the equivalent of blue chip companies, blue chip art, what is blue chip art?
00:01:35
Stefan von Imhof: Well, art is usually, there's two distinct buckets. There's classical and there's contemporary. So basically think of contemporary art as mid- 20th century and onward.
00:01:45
Sean Aylmer: Mm- hmm.
00:01:46
Stefan von Imhof: Blue chip is, it really comes down to a few different things. What you really want to look for is you want to look for artists that have a long, strong history of auctions, artists who have been exhibited in major galleries, institutions, and whose work is held by major collectors. So provenance is very important here. Blue chip would not be someone like Banksy, for example. So yes, Banksy is very famous and he's internationally famous, and there's a lot of people that collect Banksy, but the Banksy paintings are more vulnerable to volatility, it's not actually as established as someone like Basquiat, for example.
00:02:28
Sean Aylmer: Okay. So I'm actually going to jump in. So Banksy, because you're going to have to teach me some of this, so he's the street artist?
00:02:34
Stefan von Imhof: Yeah, Banksy's famous for, I don't know if you saw the banana taped to the canvas or the exploding self- destructive art, that he's kind of like a very, very postmodern artist.
00:02:46
Sean Aylmer: Yeah, yeah.
00:02:46
Stefan von Imhof: Yeah, that's Banksy. And then someone with a little bit more blue chip would be someone like Basquiat. So Basquiat, he is from the seventies, the New York scene. And I mean, basically he tackled race and a lot of social commentary. His art is very intense and in your face, and he had a short career, but he died young. And after he died, I mean, his pieces have started to really skyrocket and they've been elevated ever since. And so he's someone who you'd consider a contemporary blue chip artist.
00:03:21
Sean Aylmer: Okay. Now, you wrote a piece recently, and I mean, it's fascinating and I recommend anyone that would like to go and read it if you're interested in investing in art. And well, one of the many things I found interesting was the process of it, and you talk about the process in it, but then things like prints, you describe prints as being underrated.
00:03:41
Stefan von Imhof: Yeah, prints, it's interesting you picked up on that, prints, they have a bad rap in the world. If you don't know much about it, you might think, " Oh, it's not an original. Why does that matter?" But the fact is that for blue chip artists, releasing prints is a very big deal. And it's not like your friend who's an artist who just, everything they do gets released as a print and that way everyone can afford it for $ 500. It's not like that at the high end of the world. Prints are rare, prints, it's very rare to see them in the market and see them in the wild. It's also frowned upon and it's getting maybe a little too deep into the weeds, but it's actually frowned upon to flip prints. And so...
00:04:17
Sean Aylmer: Why's that?
00:04:19
Stefan von Imhof: Because the auction houses want to keep the prices and the demand controlled and high. And it's meant to be enjoyed, truly. I mean, that is one of the fundamental things about art is that the type of people who collect art, unlike many other asset classes, there's not actually a big flipping culture with art. You're supposed to enjoy it, you're supposed to get personal enjoyment from it and showcase it and keep it for a long time. I mean, like I said, provenance is a really important part of art collecting, so yeah.
00:04:46
Sean Aylmer: Stay with me, Stefan, we'll be back in a minute. My guest this morning is Stefan von Imhof, co- founder of alternative investing community fund alts. co. Well, I mean, another one thing you talk about, young contemporary artists. Why are people drawn to young contemporary artists, and is it actually a good investment? I mean, it must be a risky investment.
00:05:14
Stefan von Imhof: It's risky. I mean, young contemporary is a way to get into contemporary, but you're basically placing a bet on the artist's future. These are artists who show a lot of promise, but they don't really have a strong multi- decade history of strength in the numbers. And so it's risky, it's volatile. For our fund, we don't have any young contemporary, all of ours are old contemporary.
00:05:35
Sean Aylmer: Okay. And then along those lines, you talk about underrepresented and female artists. It's another area you've picked out as undervalued. I suppose, again, they're high risk, probably more opportunity, but still high risk.
00:05:47
Stefan von Imhof: Not necessarily. So underrepresented isn't necessarily high risk, they aren't really that related.
00:05:54
Sean Aylmer: Okay.
00:05:54
Stefan von Imhof: I mean, (inaudible) someone underrepresented would be a lot of contemporary female artists. So for our fund, we've bought a piece from Bridget Riley, and Bridget Riley is a British modern artist who, the best way to describe her work is it lends itself extremely well to a digital age today. I mean, this was created far before digital age began. So her stuff, you look at it and it looks like it was digitally created, but I mean, this was back in the seventies and I mean, it was long before computer software and everything. So yeah, I mean, at the time, she was very groundbreaking. And today, I mean, it's clear that her pieces speak for themselves in terms of how society values them over time. And so we do have a small Bridget Riley piece for our fund, which we're very proud of. She's also getting very old, she unfortunately won't be with us for too much longer. And so that does play into things as well.
00:06:48
Sean Aylmer: Now, many of us, when we think about art, many of we less sophisticated people, think about art, you always think about the Impressionists. You talk about there is actually an opportunity, I mean, it's very difficult to go and buy a Monet or even part of a Monet, but there are opportunities in lesser- known impressionists.
00:07:05
Stefan von Imhof: Yeah, it's interesting you think of Impressionism and you think of Monet, Renoir, but there were other Impressionists that just they're not as the household names as the big ones. So Pissarro is one, Alfred Sisley. It's a great way to buy Impressionism that although the history books haven't been as kind to these types of artists, they're still underrated in our minds.
00:07:28
Sean Aylmer: Oh, I'm partnered to someone who studied the Impressionists and so wherever we go, if there's an art gallery, I find myself looking at Impressionist art of people I had never heard before. So I get that totally. Stefan. Tell me-
00:07:42
Stefan von Imhof: It's funny, Impressionism is actually how I got into artwork back in middle school. That was really when I started to realize just how intense and interesting and how time- consuming it can be to create a masterpiece. So it's funny, I think, for me, it was kind of like a gateway drug into the art world.
00:07:59
Sean Aylmer: Yeah, okay. Now, take me through how fractional art investing works. Really interesting for most people who don't have millions of dollars to invest in art.
00:08:08
Stefan von Imhof: Fractionalization is a huge trend in a lot of alternative assets right now, and artwork is absolutely one of them. So with fractionalization, a company will buy a piece at auction. It doesn't have to be at auction, it can be, but they'll buy a piece in full and then they basically IPO that piece. So in a sense, they fractionalize the piece into shares and sell each of those shares for it can be as low as $ 100 or so. The biggest platform that people may have heard of or should know about is called Masterworks. And of all the alternative investing fractionalization platforms, Masterworks is really leading the way in terms of educating people on investing in art and in investing through fractionalization. I personally have definitely invested with Masterworks, and it's one of my favorite platforms.
00:08:56
Sean Aylmer: Fantastic. What about buying pieces on your own? I mean, is having an art broker important?
00:09:02
Stefan von Imhof: You don't have to use a broker. I would definitely recommend it. So you can just go to an auction. Anyone, there's nothing stopping you from just going to an auction, raising your hand and committing to a buy. The problem is you're going to pay a buyer's premium. When that hammer goes down, they're going to add 25%. So I mean, that is a lot to stomach for a lot of people. For many collectors, that's too much. There's also galleries, you can buy from galleries, especially special showings and stuff like that. But if you're really serious about it, just do what we did, which is, yeah, find a broker, find a trusted broker. And so we have a lot of folks in our community who are really into art collecting, and one of them, we've developed a great relationship, a gentleman in the UK. And so he is basically our go- to guy. He'll give us ideas for what's hot, what's coming next. We talk to him about once every few months or so. He's our broker, he's our guy, and I would definitely recommend others do the same.
00:09:52
Sean Aylmer: Now, if anyone's interested, so it's Alts Academy. If you Google Alts Academy, and it's the second issue of Alts Academy, fascinating look at how to invest in art or why you should invest in art, everything. Stefan, you wrote that piece, I presume, did you? Because I got glued to it.
00:10:08
Stefan von Imhof: I'd love to take credit. That was actually my co- founder, Wyatt, who wrote that one.
00:10:13
Sean Aylmer: You can take credit as far as I'm concerned. Look, Stefan, thank you very much though for talking to us this morning on Fear & Greed.
00:10:18
Stefan von Imhof: Oh, thank you.
00:10:20
Sean Aylmer: That was Stefan von Imhof, co- founder of alternative investing community fund alts. co, A- L- T- S. co. This is the Fear & Greed Daily Interview. Remember, this is general information only, and you should seek professional advice before making any investment decision. Join us every morning for the full episode of Fear & Greed, Australia's most popular business podcast. I'm Sean Aylmer, enjoy your day.
Sean Aylmer: Welcome to the Fear & Greed Daily Interview, I'm Sean Aylmer. You might remember a while ago, we talked about a few unusual asset classes. There's a whole range of alternative assets out there, and we explored some of the more left- field ones, shall we say, from tequila and vinyl records to buying domain names. Today, we're going back to Stefan von Imhof, the co- founder of alternative investing community fund, alts. co, A-L-T-S.co, for a lesson on investing in art. Of course, this is general information only, and you should certainly seek professional advice before making any investment decisions. Stefan, welcome back to Fear & Greed.
00:00:43
Stefan von Imhof: Hey, great to be here again. Thank you.
00:00:44
Sean Aylmer: So why is art such an interesting space for investors, particularly at the moment?
00:00:50
Stefan von Imhof: Well, it's funny you mentioned left- field investments, and I'm not actually sure that art falls into the left field.
00:00:57
Sean Aylmer: True.
00:00:57
Stefan von Imhof: Depending on how you look at it. I think art is either the oldest new alternative investment or the newest old alternative.
00:01:06
Sean Aylmer: Right, yeah.
00:01:07
Stefan von Imhof: Kind of like right in the middle. So it has a lot of history. Wealthy investors have been collecting fine art for hundreds of years, but along with other alternative assets like farmland and wine and whiskey, there's been a Cambrian explosion of new platforms that allow retail investors to invest in fine art over the past four or five years. So it's definitely having a moment right now.
00:01:27
Sean Aylmer: Okay. So what's considered, I suppose, the equivalent of blue chip companies, blue chip art, what is blue chip art?
00:01:35
Stefan von Imhof: Well, art is usually, there's two distinct buckets. There's classical and there's contemporary. So basically think of contemporary art as mid- 20th century and onward.
00:01:45
Sean Aylmer: Mm- hmm.
00:01:46
Stefan von Imhof: Blue chip is, it really comes down to a few different things. What you really want to look for is you want to look for artists that have a long, strong history of auctions, artists who have been exhibited in major galleries, institutions, and whose work is held by major collectors. So provenance is very important here. Blue chip would not be someone like Banksy, for example. So yes, Banksy is very famous and he's internationally famous, and there's a lot of people that collect Banksy, but the Banksy paintings are more vulnerable to volatility, it's not actually as established as someone like Basquiat, for example.
00:02:28
Sean Aylmer: Okay. So I'm actually going to jump in. So Banksy, because you're going to have to teach me some of this, so he's the street artist?
00:02:34
Stefan von Imhof: Yeah, Banksy's famous for, I don't know if you saw the banana taped to the canvas or the exploding self- destructive art, that he's kind of like a very, very postmodern artist.
00:02:46
Sean Aylmer: Yeah, yeah.
00:02:46
Stefan von Imhof: Yeah, that's Banksy. And then someone with a little bit more blue chip would be someone like Basquiat. So Basquiat, he is from the seventies, the New York scene. And I mean, basically he tackled race and a lot of social commentary. His art is very intense and in your face, and he had a short career, but he died young. And after he died, I mean, his pieces have started to really skyrocket and they've been elevated ever since. And so he's someone who you'd consider a contemporary blue chip artist.
00:03:21
Sean Aylmer: Okay. Now, you wrote a piece recently, and I mean, it's fascinating and I recommend anyone that would like to go and read it if you're interested in investing in art. And well, one of the many things I found interesting was the process of it, and you talk about the process in it, but then things like prints, you describe prints as being underrated.
00:03:41
Stefan von Imhof: Yeah, prints, it's interesting you picked up on that, prints, they have a bad rap in the world. If you don't know much about it, you might think, " Oh, it's not an original. Why does that matter?" But the fact is that for blue chip artists, releasing prints is a very big deal. And it's not like your friend who's an artist who just, everything they do gets released as a print and that way everyone can afford it for $ 500. It's not like that at the high end of the world. Prints are rare, prints, it's very rare to see them in the market and see them in the wild. It's also frowned upon and it's getting maybe a little too deep into the weeds, but it's actually frowned upon to flip prints. And so...
00:04:17
Sean Aylmer: Why's that?
00:04:19
Stefan von Imhof: Because the auction houses want to keep the prices and the demand controlled and high. And it's meant to be enjoyed, truly. I mean, that is one of the fundamental things about art is that the type of people who collect art, unlike many other asset classes, there's not actually a big flipping culture with art. You're supposed to enjoy it, you're supposed to get personal enjoyment from it and showcase it and keep it for a long time. I mean, like I said, provenance is a really important part of art collecting, so yeah.
00:04:46
Sean Aylmer: Stay with me, Stefan, we'll be back in a minute. My guest this morning is Stefan von Imhof, co- founder of alternative investing community fund alts. co. Well, I mean, another one thing you talk about, young contemporary artists. Why are people drawn to young contemporary artists, and is it actually a good investment? I mean, it must be a risky investment.
00:05:14
Stefan von Imhof: It's risky. I mean, young contemporary is a way to get into contemporary, but you're basically placing a bet on the artist's future. These are artists who show a lot of promise, but they don't really have a strong multi- decade history of strength in the numbers. And so it's risky, it's volatile. For our fund, we don't have any young contemporary, all of ours are old contemporary.
00:05:35
Sean Aylmer: Okay. And then along those lines, you talk about underrepresented and female artists. It's another area you've picked out as undervalued. I suppose, again, they're high risk, probably more opportunity, but still high risk.
00:05:47
Stefan von Imhof: Not necessarily. So underrepresented isn't necessarily high risk, they aren't really that related.
00:05:54
Sean Aylmer: Okay.
00:05:54
Stefan von Imhof: I mean, (inaudible) someone underrepresented would be a lot of contemporary female artists. So for our fund, we've bought a piece from Bridget Riley, and Bridget Riley is a British modern artist who, the best way to describe her work is it lends itself extremely well to a digital age today. I mean, this was created far before digital age began. So her stuff, you look at it and it looks like it was digitally created, but I mean, this was back in the seventies and I mean, it was long before computer software and everything. So yeah, I mean, at the time, she was very groundbreaking. And today, I mean, it's clear that her pieces speak for themselves in terms of how society values them over time. And so we do have a small Bridget Riley piece for our fund, which we're very proud of. She's also getting very old, she unfortunately won't be with us for too much longer. And so that does play into things as well.
00:06:48
Sean Aylmer: Now, many of us, when we think about art, many of we less sophisticated people, think about art, you always think about the Impressionists. You talk about there is actually an opportunity, I mean, it's very difficult to go and buy a Monet or even part of a Monet, but there are opportunities in lesser- known impressionists.
00:07:05
Stefan von Imhof: Yeah, it's interesting you think of Impressionism and you think of Monet, Renoir, but there were other Impressionists that just they're not as the household names as the big ones. So Pissarro is one, Alfred Sisley. It's a great way to buy Impressionism that although the history books haven't been as kind to these types of artists, they're still underrated in our minds.
00:07:28
Sean Aylmer: Oh, I'm partnered to someone who studied the Impressionists and so wherever we go, if there's an art gallery, I find myself looking at Impressionist art of people I had never heard before. So I get that totally. Stefan. Tell me-
00:07:42
Stefan von Imhof: It's funny, Impressionism is actually how I got into artwork back in middle school. That was really when I started to realize just how intense and interesting and how time- consuming it can be to create a masterpiece. So it's funny, I think, for me, it was kind of like a gateway drug into the art world.
00:07:59
Sean Aylmer: Yeah, okay. Now, take me through how fractional art investing works. Really interesting for most people who don't have millions of dollars to invest in art.
00:08:08
Stefan von Imhof: Fractionalization is a huge trend in a lot of alternative assets right now, and artwork is absolutely one of them. So with fractionalization, a company will buy a piece at auction. It doesn't have to be at auction, it can be, but they'll buy a piece in full and then they basically IPO that piece. So in a sense, they fractionalize the piece into shares and sell each of those shares for it can be as low as $ 100 or so. The biggest platform that people may have heard of or should know about is called Masterworks. And of all the alternative investing fractionalization platforms, Masterworks is really leading the way in terms of educating people on investing in art and in investing through fractionalization. I personally have definitely invested with Masterworks, and it's one of my favorite platforms.
00:08:56
Sean Aylmer: Fantastic. What about buying pieces on your own? I mean, is having an art broker important?
00:09:02
Stefan von Imhof: You don't have to use a broker. I would definitely recommend it. So you can just go to an auction. Anyone, there's nothing stopping you from just going to an auction, raising your hand and committing to a buy. The problem is you're going to pay a buyer's premium. When that hammer goes down, they're going to add 25%. So I mean, that is a lot to stomach for a lot of people. For many collectors, that's too much. There's also galleries, you can buy from galleries, especially special showings and stuff like that. But if you're really serious about it, just do what we did, which is, yeah, find a broker, find a trusted broker. And so we have a lot of folks in our community who are really into art collecting, and one of them, we've developed a great relationship, a gentleman in the UK. And so he is basically our go- to guy. He'll give us ideas for what's hot, what's coming next. We talk to him about once every few months or so. He's our broker, he's our guy, and I would definitely recommend others do the same.
00:09:52
Sean Aylmer: Now, if anyone's interested, so it's Alts Academy. If you Google Alts Academy, and it's the second issue of Alts Academy, fascinating look at how to invest in art or why you should invest in art, everything. Stefan, you wrote that piece, I presume, did you? Because I got glued to it.
00:10:08
Stefan von Imhof: I'd love to take credit. That was actually my co- founder, Wyatt, who wrote that one.
00:10:13
Sean Aylmer: You can take credit as far as I'm concerned. Look, Stefan, thank you very much though for talking to us this morning on Fear & Greed.
00:10:18
Stefan von Imhof: Oh, thank you.
00:10:20
Sean Aylmer: That was Stefan von Imhof, co- founder of alternative investing community fund alts. co, A- L- T- S. co. This is the Fear & Greed Daily Interview. Remember, this is general information only, and you should seek professional advice before making any investment decision. Join us every morning for the full episode of Fear & Greed, Australia's most popular business podcast. I'm Sean Aylmer, enjoy your day.
