Comments on: Masterworks Review: Is This Art Investment Platform a Scam or Legit?

By: Jeff

Jeff — Sun, 24 Mar 2024 18:59:52 +0000

In reply to Mark Piekny. The Masterworks advertised rate of return is the ANNUAL rate of return, and is NET of all fees and expenses. In other words, the returns achieved are 13.8% per year, net of fees and expenses. If you invested $10,000 and Masterworks sold the painting exactly three years later, your actual payout would be $10,000 x 0.138 x 3 = $4,140.

By: Francis

Francis — Sat, 16 Dec 2023 18:52:12 +0000

I gave $600k to a company three years ago with the promise of making a huge profit. But in reality, my capital has gone down by 5% since I started investing with them (I’m not a US citizen).

They assured me that I could sell my shares on the 2nd market whenever I wanted to. Since the return is negative, I decided to sell my shares. But as a non-US citizen, they don’t allow me to sell my shares, and I am stuck with them until they decide to sell the painting.

By: Barry Wittman

Barry Wittman — Thu, 31 Aug 2023 20:27:56 +0000

After reviewing my current portfolio and goals, the interviewer suggested that it was not in my best interest to invest with them. However, he continued to answer questions at my request. He mentioned that he was a fiduciary agent and was obligated to advise me in my best interest. I observed that of all the artworks sold, none had a holding period exceeding three years, and only one came close—perhaps the average holding period was one year. The minimum investment cited was $500. They also openly discussed tax issues, as well as a management fee of 1.5% per year and a sales fee of 20% of the profit.

My experience with them seems to be markedly different from yours.

By: Chris

Chris — Mon, 31 Jul 2023 20:35:05 +0000

I have known about Masterworks for a while, and while I remain interested in the company, I also made the decision not to open an account. But for me, the reasons really came down to the art. On my “interview” I asked them where the art is held while Masterworks owns it (in warehouses), and what level of insurance they hold on the artwork they own (never got a good answer). I guess I could get past not being able to hang the art above my fireplace, but it seems completely backwards that an art lover would spend a bunch of money buying a fractional ownership of artwork (that they presumably think is compelling) only to have it sit in moth balls for a decade. At least have a “Masterworks Gallery” where people can go view this stuff.

By: Sally M.

Sally M. — Mon, 17 Jul 2023 19:14:51 +0000

In reply to Ryan. They suggested investing 5% of your liquid assets in the artwork. But I was told the minimum for any one piece was $15,000 and that is what their documentation indicates as well.

By: Sally M.

Sally M. — Mon, 17 Jul 2023 19:11:34 +0000

In reply to Erika.

Yes, during my interview they indicated Masterworks retains a partial ownership in the piece so they have “skin in the game” — interviewer’s words.

By: Sally M.

Sally M. — Mon, 17 Jul 2023 19:07:05 +0000

In reply to Domen. I just had my interview. I didn't feel too pressured. they did want to close a sale today, but it was easy to put that off. I guess the entry price has substantially jumped to a minimum investment of $15,000! I would take that as a bad sign that they are having trouble getting investors to cover their expenses. Thank you for your article -- very helpful in deciding not to invest on this avenue!

By: Ryan

Ryan — Tue, 25 Apr 2023 21:46:38 +0000

I had two interviews/phone calls. The first call with Hunter Zhang. I was told “MY” minimum investment is $20k based on my available liquidity. I stated I didn’t want to invest that much and would rather start with a much smaller amount. The reply was basically call back when I was ready to invest the $20k. My second call (about a year later) was with Brendan Miles. After reviewing notes from my last call he asked me what’s my current liquidity. I told him, but also stated I only had $5k – $10k to invest this time. He told me as a “fiduciary” he does not recommend that I invest if I only have $5-$10k to place. I replied okay, thanked him for the time and hung up. #redflags

By: R.J. Weiss

R.J. Weiss — Wed, 19 Apr 2023 13:16:27 +0000

In reply to Erika. Hi Erika, The 1.5% fee mentioned is an annual management fee. If they mentioned receiving a share, it's likely they were referring to the performance fee. Masterworks charges a 20% performance fee on the profit generated from the sale of artwork. This fee is separate from the 1.5% annual management fee. I hope this clarifies any confusion!

By: Erika

Erika — Mon, 17 Apr 2023 23:30:52 +0000

In reply to Mark Piekny. Thanks for sharing . When I spoke to them I was told they would also get a share. Do you know if that is the 1.5% fee or did you forget to add that ?