Anyone can easily own a Basquiat painting, a pair of Yeezy sneakers or even a Ferrari – at least, that’s the promise of a growing number of fractional ownership platforms that sell shares of these rare items, starting at just a few dollars.
One platform, Masterworks, in 2020 turned the $6 million painting The Mosque by Jean-Michel Basquiat into 284,420 shares at $20 each.
With fractional ownership, there’s no chance of hanging the painting in a buyer’s home or parking a Lamborghini in their garage.
But by owning at least a piece of the property – at least on paper, like the shares of a publicly listed company – anyone can now directly benefit from an increase in the item’s value, just like a wealthy collector.
The ways that people can participate in [the market] and experience it, enjoy it, have just dramatically changed in the last six months
Whether it’s paintings or baseball cards, “it’s not a new industry”, Ezra Levine, the chief executive of Collectable, a platform that specialises in sports paraphernalia, said.
“It’s not like cryptocurrencies where it was literally invented five or 10 years ago,” he said. “It’s just that the ways that people can participate in [the market] and experience it, enjoy it, have just dramatically changed in the last six months.”
Slugger, the username of a collector who preferred to stay anonymous, made a 500 per cent profit on a few shares of a box of Pokemon cards, initially priced at $125,000.
The platform Rally had offered the box via an initial public offering, similar to the listing of a company on the stock market and also subject to controls by the US market regulator, the Securities and Exchange Commission.
“These fractional platforms just open up the class to people who can’t afford to buy a full [Michael] Jordan [trading] card,” John Schuck, 43, whose holdings amount to about $20,000 in cars, paintings or sports memorabilia, said.
The concept of shared ownership of physical assets started with real estate. Over the past 20 years, it has expanded to include private jets and yachts, but entry prices have remained high and largely inaccessible to the general public.
The new fractional platforms have drastically lowered prices, sometimes to less than $10 a share.
Such entry prices allow sneaker enthusiasts, for instance, who initially built the “sneakerhead” culture but were priced out, to own at least a part of cult pieces, Gerome Sapp said.
His platform, Rares, will in June list a pair of the Nike Air Yeezy 1 inspired by musician Kanye West, which it acquired for a record-breaking $1.8 million in late April.
But the emotional aspect of buying is not quite the same, as most shareholders will never actually see the object in person, unlike old-school collectors. Rally opened a museum in New York that displays some of the pieces listed online, and Masterworks has a gallery, but few people plan on visiting.
“The fact that I can’t touch it kind of takes away the emotion of it,” Gregg Love, who belongs to this new generation of collectors, said.
“I don’t feel a connection at all to any of these assets,” Slugger said. “This is purely an investment and entertainment for me.”
Considered a pioneer of this new fractional ownership trend, Rally has seen a major surge in interest during the coronavirus pandemic, surpassing 200,000 users, with about $25m in assets listed on the platform.
The fact that I can't touch it kind of takes away the emotion of it
Behind Rally, three competing platforms – Otis, Collectable and the more art-focused Masterworks – have more than 200,000 users combined. Many of those users, however, are active on several platforms at the same time.
During the pandemic, remote work, lockdowns and reduced leisure activities provided time and savings to many, especially young professionals, who turned to the stock market or new investments.
“Many people had a lot of money in their account and were looking for a place to put it. We have been spoiled this past year with some of the returns we have seen,” Mr Schuck said.
But as wealthy countries slowly emerge from the pandemic, Mr Schuck said he has started to notice a “slowdown” in the fractional ownership market.
Others also point to the effect of a potentially too-rapid increase in supply.
Even though many assets are still priced, sometimes significantly, above their listing value, there is some concern about sharp price swings, which are much more pronounced than in the stock market.
Fractional ownership is still an experimental market, where price risks are very real. Slugger cites “panic selling” by recent investors, even though “nothing has fundamentally changed for the majority of these assets”.
For Collectable chief Mr Levine, in the long term, these platforms still offer “a much more efficient way of pricing things” than before.
The platforms increase transparency and democratise access, so that “a lot of people can impact prices, not just ... a very select few”, he said.
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
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Other must-tries
Tomato and walnut salad
A lesson in simple, seasonal eating. Wedges of tomato, chunks of cucumber, thinly sliced red onion, coriander or parsley leaves, and perhaps some fresh dill are drizzled with a crushed walnut and garlic dressing. Do consider yourself warned: if you eat this salad in Georgia during the summer months, the tomatoes will be so ripe and flavourful that every tomato you eat from that day forth will taste lacklustre in comparison.
Badrijani nigvzit
A delicious vegetarian snack or starter. It consists of thinly sliced, fried then cooled aubergine smothered with a thick and creamy walnut sauce and folded or rolled. Take note, even though it seems like you should be able to pick these morsels up with your hands, they’re not as durable as they look. A knife and fork is the way to go.
Pkhali
This healthy little dish (a nice antidote to the khachapuri) is usually made with steamed then chopped cabbage, spinach, beetroot or green beans, combined with walnuts, garlic and herbs to make a vegetable pâté or paste. The mix is then often formed into rounds, chilled in the fridge and topped with pomegranate seeds before being served.
The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
Engine: 5.7L V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 556Nm @ 3,950rpm
Fuel economy, combined: 12.7L / 100km
Global state-owned investor ranking by size
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Managing the separation process
- Choose your nursery carefully in the first place
- Relax – and hopefully your child will follow suit
- Inform the staff in advance of your child’s likes and dislikes.
- If you need some extra time to talk to the teachers, make an appointment a few days in advance, rather than attempting to chat on your child’s first day
- The longer you stay, the more upset your child will become. As difficult as it is, walk away. Say a proper goodbye and reassure your child that you will be back
- Be patient. Your child might love it one day and hate it the next
- Stick at it. Don’t give up after the first day or week. It takes time for children to settle into a new routine.And, finally, don’t feel guilty.
MATCH INFO
Real Madrid 2
Vinicius Junior (71') Mariano (90 2')
Barcelona 0
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
UAE currency: the story behind the money in your pockets
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
The specs: 2018 Alfa Romeo Stelvio
Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
KILLING OF QASSEM SULEIMANI
more from Janine di Giovanni
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
