Overview
Invest in a diversified fund of artworks by globally recognized contemporary artists including Banksy, Takashi Murakami, and Yayoi Kusama among others. All artists included within the Fund have historically outperformed their auction sales expectations and are expected to maintain strong sales performance over the life of the Fund.
Additionally, artists included within the Fund are considered art market leaders and have a demonstrated track record of price momentum, strong demand and popular interest.
Premise
Potential benefits of adding art and the Fund to your portfolio include:
Potential benefits of adding art and the Fund to your portfolio include:
- In addition to potentially lucrative returns, art may act as a store of wealth to hedge against inflation and maintain purchasing power.
- Art’s historically low correlation to the stock market makes it a viable investment opportunity for investors looking to diversify their investment portfolio.
- The diversified nature of the Fund could help reduce concentration risk for investors relative to investing in a single piece of art.
- This Fund is designed to democratize access to and reduce the barriers of investing in art due to its lower minimums allowing retail investors to capitalize on the historical returns generated by the art market.
Contemporary art is the best bet for investors
Contemporary art is the best bet for investors
- According to the Artprice 100 Index, blue-chip art has historically outperformed the S&P 500 by over 300% from 2000–2018*, based on the most recent data available.
- According to Citi, contemporary art has been the top performing art category.
- According to Artprice, $2.7 billion of contemporary art was sold during 2021, representing a stronger, more diverse and deeper market than ever before.
- A total of over 100k contemporary works changed hands in 2021, 10x more than 20 years ago.
- The global total from auction sales of contemporary art in the first six months of 2021, exceeded the total for full-year 2020, illustrating the resilience of the art market during uncertain times.
Fund comprised of artworks created by some of the most sought after artists
Fund comprised of artworks created by some of the most sought after artists
- The Fund is expected to own works by artists including Banksy, Takashi Murakami, Mickalene Thomas, Amoako Boafo, Glenn Ligon, Stanley Whitney and Harold Ancart, among others.
- All artists in the Fund have an average sales CAGR of at least ~10%, with some artists achieving extremely strong CAGRs in the high double and even triple digits. For example, Stanley Whitney has a CAGR of 55% and Amoako Boafo has an impressive CAGR of 133% for works sold at auction.
- At auction, bidding for works by these artists is highly active, representing strong institutional and private interest in each artist.
- These are some of the most influential artists of this century, who have gained wide recognition in the world of art history and cultural significance.
- A number of the artists are the subjects of important museum exhibits and continue to be heavily promoted by the most important galleries worldwide, which further bolsters demand for their art.
Experienced art manager with works vetted rigorously by industry leaders
Experienced art manager with works vetted rigorously by industry leaders
- Investment decisions will utilize third-party appraisals and expertise, supplemented with analysis from a proprietary database managed by Athena Art Finance.
- Athena has evaluated over $2B of art and has funded over $600M worth of fine art investments.
- The value-oriented approach to asset acquisition is designed to provide a margin-of-safety on each investment.
Thorough investment strategy and approach to investment selection
Thorough investment strategy and approach to investment selection
- The Fund seeks to acquire only exceptional examples of each artist’s most iconic subject matters, from the most important period of their careers.
- Prior to purchasing the works, a third-party appraiser estimates the art’s value, providing an additional and independent assessment of the artwork fair market value.
- Additionally, the conditions of all artworks are evaluated and assessed by a museum conservator before purchase.
- The investment team seeks to capitalize on market inefficiencies due to mispricing across the auction and dealer markets in order to acquire artworks at or below their appraised value.
- Artworks in the Fund, as well as the art market at large, are continuously monitored and their value is assessed based on sales data to optimize timing of purchases and sales.
Rest assured that the art is insured and safely secured
Rest assured that the art is insured and safely secured
- At all times, the artworks will be insured by a wall-to-wall fine art insurance policy providing coverage up to the appraised total value for the Fund.
- Yieldstreet and Athena will maintain possession of all artworks at all times, except when artworks in the Fund are requested to be exhibited, for example by museums, major institutions or important gallery exhibitions.
Essentials
Please refer to the Private Placement Memorandum in the Documents section for more details about this offering.
Please refer to the Private Placement Memorandum in the Documents section for more details about this offering.
Capital structure
Capital structure
Where does Yieldstreet lie in terms of priority?
- The Fund is expected to own the entire equity portion of a portfolio of artworks. The Fund does not expect to employ any leverage.
Cash flow
Cash flow
How do I get paid?
- Over the life of the investment, investors are expected to receive a target annualized return of 16 - 20%, net of management, servicing and acquisition fees and expenses as further described in the Private Placement Memorandum.
- Principal and returns are expected to be achieved via appreciation of each artwork’s value at the time of its sale, which is anticipated to be within 5 years.
- As cash flows are received by the Fund from the sale of individual artworks, unpaid fund expenses, reserve amounts, management and servicing fees and annual member expenses are deducted first.
- Capital contributions are then returned to investors.
- The remaining proceeds are next paid to investors up to a 15% annualized net return on invested capital.
- Additional remaining proceeds are split between investors (85%) and the Manager (15%).
- Please refer to the Private Placement Memorandum for a detailed explanation on all fees.
Target returns are not referenced to past performance, not guaranteed and realized results may differ.
Returns & Management fees
Ann'l management fee
2.0%
Target ann'l net return
16 - 20%
Inv share in excess profits
85%
Incentive fee
15%
Schedule
Payment schedule
Event based
Target term
5 years
Target liquidity event
Year 3
Structure
Tax document
K-1
Offering structure
SPV
Ann'l flat expense
0.25%
Docs
This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS AEF III LLC ("Fund"). The Offering is made only by means of the Private Placement Memorandum dated March 15, 2022 relating to the Offering (the "PPM"). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the PPM, or as incorporated in the PPM by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the PPM or in any marketing or sales literature issued by the Fund or Yieldstreet Management, LLC, as adviser thereto, and referred to in the PPM, and, if given or made, such information or representations must not be relied upon. All investors must read the PPM in its entirety prior to investing in the securities.
Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.
2 Represents an average net realized internal rate of return (IRR) with respect to all matured investments in your portfolio, utilizing the effective dates and amounts to and from the investments and net of management fees and all other expenses charged to the investments. Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. All securities involve risk and may result in significant losses, including the loss of principal invested.[read more]