“You're really dipping your toe in such a small pool,” warns Read.
Fractional owners have little control over when they see payouts. No fractional art ownership company currently offers dividends, in fact they charge yearly management fees. Some fractional companies that do not offer blockchain options do have secondary markets where shares can be traded. In the case of Masterworks, a New York-based fractional ownership company that does not have blockchain offerings, only registered investors can see share prices.
The model in itself is tricky. Until companies can sell all the shares for a given artwork, the seller retains ownership, and investors' money is held in escrow. In the case of Freeport, once all the shares for an artwork are sold, the company takes control via a limited liability subsidiary for each print, and the artwork in question will be transported to Delaware for safekeeping, Johnson tellsthat was created to hold the print.
The system she described would later be applied to art ownership. By the end of the decade, several fractional companies like Feral Horses, Maecenas and LookLateral had launched, primarily focusing on art, but a lack of regulation minimized investor interest. In 2018 Masterworks sold its first securitized shares registered in the United States with the Securities and Exchange Commission and investors through Maecenas and for $1.