Alts open up everything from Harlem Renaissance art to Japanese whisky
The new products not only provide investment opportunities that aren't available on the open market, but can also combine a client’s passions — for things like antique cars or even musical instruments — with their investment portfolios.
Faith Ringgold, a 91-year-old Black female artist, is renowned for her activism, artistic expression and “narrative quilts” that combine both painting and quilting. What’s less well-known is that clients can now invest in her artwork, and that of other artists associated with the Harlem Renaissance.
A new fund, offered by digital alternative investment provider Yieldstreet Inc., celebrates Black and female visual artists working in New York — two groups that have long been under-represented — and whose works are highly coveted by collectors, museums and major institutions, according to the company.
“The accomplishments of this movement laid the groundwork for the civil rights movement decades later and in many ways has helped shape modern American culture,” said Rebecca Fine, head of art financing at Yieldstreet.
Fintech companies like Yieldstreet are now using automation to combine numerous investors into a single fund, bringing down the minimum for everyone and allowing entry to funds that used to be the domain of the ultrarich.
“Simply put, people are modernizing their portfolios,” said Michael Weisz, founder and president of Yieldstreet. “Like all the major institutional investors, they have turned to alternatives — private equity, private credit, venture and passion. This is how they will find the kind of returns they need to generate long-term wealth creation.”
InvestmentNews wants to hear from you! Please take a minute to complete this form, so we can better understand and serve our readers.
"*" indicates required fields
Research from PricewaterhouseCoopers suggests alternatives will grow significantly in the coming years; it predicts assets will double between 2017 and 2025. Real assets, which include infrastructure and real estate, are expected to be the fastest-growing segment.
A major factor in alts’ popularity has been the declining number of publicly traded companies, which fell by half between 1997 and 2017. Alternative investments are giving clients an avenue to gain exposure to private firms and expand their investing universe.
They’re not only providing opportunities that aren’t available on the open market, but are also combining a client’s passions — for things like artwork, antique cars or even musical instruments — with their portfolios.
Vint, a SEC-qualified wine investment platform, was the first wine investment platform to offer shares of wine and spirits collections and now has $1 million in investments on the platform in less than seven months, according to the company.
The latest collection offers rare whisky from a producer called Karuizawa, which ranks as royalty among Japanese whiskies. At $34 a share, clients, including nonaccredited investors, can own a piece.
“The collection is one of the few known complete sets in existence,” said Vint CEO Nick King. “The producer stopped making the whisky and actually closed down, so the combination of scarcity and strong demand, coupled with the fact that there’s no more of this whiskey ever going to be produced, created a really interesting risk-reward.”
According to King, investments in Japanese whiskies on average returned more than 40% in 2021. Vint didn’t disclose the number of its users, but the fintech company said it has sold more than 30,000 shares across nearly 2,200 bottles of wine and whisky.
While alts are bringing down barriers to entry and opening up vast new investment opportunities around the globe, they are also highlighting important moments in American history, Fine said. The artists in the Yieldstreet fund, for example, are finally being reevaluated and appreciated by some of the country’s most preeminent museums.
Fine cited another artist in the fund, Alice Neel, who painted portraits, working in Spanish Harlem, and has garnered intense interest over the last five years, including an exhibit at the Metropolitan Museum of Art last year.
Ringgold will be the subject of a retrospective at the New Museum in New York City opening next month.
“A century later, Harlem’s rich culture continues to inspire the creative community, producing some of the most respected and highly sought-after artists today,” Fine said.
Death of 60/40 boosts interest in alts
Learn more about reprints and licensing for this article.
