London art exchange lets collectors buy shares of a Banksy

LONDON - It may look more like a trading floor than an art show. Hundreds of well-heeled Londoners mill about, checking screens to see the latest trades and buy shares in initial public offerings. But the Banksy paintings and Shepard Fairey print point to a serious art gallery.

My Art Invest opened its doors in East London on Thursday, providing art collectors with a front for an online trading platform where they can buy shares in works by important street artists for as little as 5 pounds (S$10).

"We want to democratise art," Tom-David Bastok, My Art Invest's 25-year-old French founder, told Reuters. "For me, it's very, very, very important that everybody can put a foot in the art market."

He called My Art Invest "Gallery 2.0" and indeed, upon entering, would-be buyers are given iPads they can use to check the price and availability of shares, and make purchases.

A buyer who acquires one quarter of piece's shares can take it home for three months, or one quarter of a year.

Many in the young, artsy crowd liked the idea of being able to actually own works of fine art, but some viewed it as a step toward 'commoditisation' of culture.

"I like the idea, I like that artists are being recognised... but it does feed into this consumerism," said Azziza Tillock, a 28-year-old Londoner who works in catering.

The global art market totaled US$65.9 billion (S$82.5 billion) last year, an increase of 8 per cent and the highest level since 2007, according to a report by the European Fine Art Foundation.

Initial prices are set by My Art Invest, based on the market value and the more expensive a piece is, the more shares are issued.

Once the initial offering is completed and all the shares are sold, owners can list their shares on the gallery's secondary exchange for resale at any price they like.

ART AND FINANCE

My Art Invest does not monitor or manage the trades, choosing, like eBay, to let market forces play out.

"We are not a financial market but we try to be a cultural market," said Bastok, who spent his youth accompanying his mother at art shows, after which they would buy canvases and paint to recreate their favourite works.

He came up with the idea for My Art Invest while studying finance at Paris's Ecole Supérieure de Gestion et Finance and founded the company in Paris in 2011.

"I wanted to put my two favourite things, art and finance, into the same concept," he said.

In France, the exchange traded a Jeff Koons sculpture called"Blue Balloon Dog", with shares launched at 55 euros (S$95) each and later trading at 200 euros, as well as "Rome Pays Off" by Jean-Michel Basquiat, whose shares climbed from 200 euros to 350 euros.

The average appreciation, however, is a more modest 30 per cent in a period no longer than three years, says Bastok.

That compares with an average return, according to My Art Invest, of about 4 per cent over a period of five to 10 years in art investing.

Bastok is far from the first to start a financial vehicle for art investing. Back in 2001, ex-Christie's advisor Philip Hoffman launched The Fine Art Fund Group in London. The art hedge fund no longer has any active funds, but still advises five pooled funds with assets under contract worth more than $200 million, according to its website.

London is My Art Invest's first international foray, but Bastok has plans for New York and Miami, and hopes to follow that with Shanghai and Hong Kong. The business makes money by trying to buy pieces at a discount and then takes a commission on every trade.

One of the most sought-after pieces in its collection is a stenciled painting on canvas by elusive UK artist Banksy called "Heavy Artillery" that features an elephant weighed down by a missile strapped to its back.

Its 1000 shares were listed at 120 pounds each.