Fractional ownership
What is fractional ownership?
Fractional ownership means dividing ownership of a single work among several people. You do not own the whole painting but a part of it — a share, rather than the artwork itself. The model arose as a response to rising art prices and opens the door to smaller investors who could not afford a whole work.
How does fractional ownership work in practice?
The whole process is handled by a specialist platform, which first selects a suitable work, buys it and then offers shares in it to investors. Art Part Club is built on exactly this idea: the club selects and acquires the work through a special purpose vehicle (an SPV, a legal entity set up solely for that work), and arranges its management, insurance and storage in a depository. The work stays physically in one place while you hold your share.
How do I get my money back?
After a few years the work is sold, either at auction or to a private collector, and the proceeds are divided among the shareholders. You do not have to wait for that final sale, though. Art Part Club is building liquidity through its own marketplace (a marketplace for shares), where you can offer your share for sale before parting with the work itself.
Who is fractional ownership for?
Above all for anyone who wants a taste of art without having to put millions down for a whole work at once. According to the data, a large proportion of younger collectors are considering co-ownership of art; it is the fastest-growing segment of the market and is open to Generation Z as well. Co-ownership is often the first step towards a collection of one's own.
How does fractional ownership stand in the Czech context?
In the Czech context it is still a relatively new concept, appearing hand in hand with growing interest in collecting and investing in art. In future, fractional ownership may well change the whole structure of the art market. And this is not mere impression — the figures on the growth of younger collectors point the same way.
— Anna Pulkertová, founder of Art Part Club