A collector’s perspective on Artsplit
Five years ago, I began collecting investment-grade artworks and quickly identified three major pain points. Starting with the most obvious issue, cataloguing artworks, especially when you have more than 20 pieces. Collectors often have an insatiable desire to amass an ever-increasing number of artworks, sometimes, numbering in the thousands. How do you keep track of everything you do? How do you document them in a way that reflects the narrative that is relevant and central to the work? How do you quickly refer to the works and provide a detailed analysis of your investment portfolio based on AI-indicated valuations? That was the first symptom I noticed.
The second major source of discomfort was double loading. These investment-grade works are exorbitantly priced. A Yusuf Grillo, for example, will easily set you back $300,000, as will El-Anatsui, Ben Enwonwu and Irma Stern. That is not easy to come by anymore, and sometimes, when the desire to collect is strong, it is best to investigate the option of co-ownership of artwork, but there is no easy platform to do so. The flip side of the second issue is that most collectors have more works than available wall space. I know we all feel this way, and depending on the extent of your pain, some of you may have purchased houses specifically to house these artworks. How do we convert the cost burden of artwork storage into a steady stream of revenue from leasing these works and the altruistic disposition of allowing the works to be displayed?
The third discomfort is critical to being a finance professional. Most collectors have spent a fortune over the years acquiring exceptional works of art. Even though the works have an active auction market with ready buyers at known price levels, such collectors will find it extremely difficult to access liquidity using their art portfolio. This is a significant challenge for the financially savvy men.
If you have any of these issues or have had a similar experience, investigate Artsplit; it may be useful to you as it has been to me. Before I share my product experience, please keep the following points in mind. Based on my personal experience and art-related pain-points, I was instrumental in the design of Artsplit. The second is that VFD Group, of which I am GMD/CEO, invested $1 million in Artsplit two months before the app’s release.
Having said that, my personal experience with the app has been outstanding, barring a few minor bugs and product redesigns. By far my favourite app feature is the cataloguing feature. Over the course of five years, I have amassed a collection of over 500 works of art. I recognise every work I own when I see it, but I can’t recall all of them offhand. I also don’t remember all of the minor details of my works, which are necessary for the story-telling aspect of any remarkable work. I’ve catalogued most of my works so far, and the feeling is out of this world. It is simple to retrieve work details and share them with friends. The online catalogue is so well formatted that it can be sent to print without being altered.
I also like the app’s co-ownership functionality, which is referred to as “splits.” I have co-acquired top investment grade African works that I could not have afforded on my own in the last 14 days. It has also provided me with excellent portfolio diversification. Enwonwu’s Ogolo in Motion (1982), Irma Stern’s Grape Cutter – 1955 and A Spanish City Beyond – 1962, Abdoulaye Aboudia’s Untitled – 2014 and Noutchy Graffiti – 2020, William Joseph Kentridge’s Sophiatown At Civitavecchia – 1988, and Uzo Egonu’s Women Gathering – 1962. I don’t own these works entirely, but I enjoy the same return profile in relation to the amount invested. It’s also worth noting that these same works, which are only partially owned, are reflected and properly documented in the catalogue.
I introduced a South African friend to Artsplit last weekend, and he was ecstatic. It didn’t take long for me to figure out why, and he was open about it. He desperately needed $50,000 and couldn’t get it despite having an art portfolio worth more than $6 million. The reason is straightforward: there are no widely accepted structures for arts-related lending and transactions. He received the necessary funding within 24 hours, and I am sure he is still stunned.
The team is currently developing an arts acquisition finance product that will provide credit at the touch of an icon. It will also provide the portfolio valuation required to support any credit appraisal or loan consideration. I believe the section’s resolution point is, “How do we structure and package arts to become a relevant financial instrument?” That, I believe, is the primary challenge confronting the African arts community.
Okpala, an art enthusiast, is Group Managing Director of VFD Tech and VFD Group Plc, a proprietary investment firm with holdings in banking, technology, real estate, art and hospitality.