Art Equity Fund IV

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Accepting $15,000 - $500,000 investments

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Accepting $15,000 - $500,000 investments

Overview

Performance Update

• View the most recent update for other Art Equity offerings: Art Equity Fund I and Art Equity Fund II.

Invest in a diversified fund of artworks by globally acclaimed contemporary artists including Jean-Michel Basquiat, Damien Hirst, Edward Ruscha, and Lucio Fontana, among others.

  • Defensive characteristics: Art’s historically low correlation to the stock market, potentially lucrative returns, and potential to act as a store of wealth to hedge against inflation makes it a viable investment opportunity for investors looking to diversify their portfolio.
  • Resilient asset: Based on MeiMoses, the leading art index at the time of the global financial crisis, from 2007 to 2009, auction prices fell by roughly 27.2%, while the S&P 500 fell 57% from its peak and hit a 12-year low in early March 2009. By 2011, total art sales had reached pre-crisis trading levels, while the S&P 500 took an additional two years, indicating that the art market has the potential to recover at a faster rate.
  • Outsized returns: The artists have historically outperformed their pre-auction valuations and are expected to maintain strong sales performance throughout the duration of the Fund. Collectively, the artists’ average sales compound annual growth rate of 13.5% demonstrates their ability to generate outsized returns for investors.

Video: Yieldstreet recently sat down with Jean-Michel Basquiat's sisters to discuss his 2022 exhibition, 'Jean-Michel Basquiat: KING PLEASURE, watch the interview now.

Premise

Investment details

What am I investing in?

  • Equity exposure to a Fund consisting of 6 artworks by blue-chip artists. The Fund has sought 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 artworks’ fair market value, and the conditions of all artworks are evaluated and assessed by a museum conservator before purchase. Anchored by a Jean-Michel Basquiat piece and supported by exclusive works by Damien Hirst, Edward Ruscha, and Lucio Fontana, among others. 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 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.---

Investment strategy

What is the value proposition?

  • 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.
  • The Fund has sought to acquire only exceptional examples of each artist’s most iconic subject matters, from the most important period of their careers.
  • 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, and potentially reduces downside risk.
  • At auction, bidding for works by these artists is highly active, representing strong institutional and private interest in each artist which could benefit investors in the Fund when works are sold within 5 years time.
  • Notably, 12 paintings by Jean-Michel Basquiat were auctioned in November 2022 with an average price of $13.1m and an aggregate hammer price of $157.4M.
  • A comparable Hirst work was auctioned in November 2022 for 200% above the low auction estimate.

Behind the investment

How was the Fund curated and who is the manager?

  • The manager, Athena Art Finance, has evaluated over $2.5B of art and has funded over $600M worth of fine art investments.
  • Investment decisions will utilize third-party appraisals and expertise, supplemented with analysis from a proprietary database managed by Athena Art Finance.
  • Prior to purchasing the works, a third-party appraiser estimates the art’s value, providing an additional and independent assessment of the artworks’ fair market value.
  • Additionally, the conditions of all artworks are evaluated and assessed by a museum conservator before purchase.
  • 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.The value-oriented approach to asset acquisition is designed to provide a margin-of-safety on each investment.
  • 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 other exhibition spaces, as these exhibitions tend to increase the future demand for the works.

Video: Rebecca Fine, Managing Director and Head of Art Investments at Yieldstreet recently sat down with Courtney Kremers, Head of Private Sales, Americas at Sotheby's to discuss how artworks are selected for our Art Equity Funds.


Market backdrop

Why should you consider investing?

  • 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.
  • The asset class has also demonstrated resilience during downturns of the past. Based on MeiMoses, the leading art index at the time of the global financial crisis, from 2007 to 2009, auction prices fell by roughly 27.2%. Meanwhile, the S&P 500 fell 57% from its peak and hit a 12-year low in early March 2009. But by 2011, total art sales matched 2007 levels. The S&P 500, by comparison, took an additional two years to reach pre-crisis trading levels in 2013, indicating that the art market has the potential to recover at a faster rate.
  • The artists featured in the Fund have an average sales compound annual growth rate of 13.5% demonstrating their ability to generate outsized returns for investors. The adjacent charts analyze historical sales of works by artists featured in this Fund.
  • Art’s historically low correlation to the stock market, potentially lucrative returns, and potential ability to hedge against inflation makes art investment funds a viable investment opportunity for investors looking to hedge against a turbulent stock market.

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Essentials

Please refer to the Private Placement Memorandum for more details about this offering.

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

How do I get paid?

  • 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, management fees and other fees and expenses as further described in the operating agreement 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.

Accessibility

Who can invest?

  • The Fund provides investors with access to valuable art opportunities only previously available to the fortunate few
  • Eligible investors must verify that they are accredited investors. Please refer to the Private Placement Memorandum for more information.

Returns & Management fees

Annual management fee

2.0%

Target ann'l net return

Login to view

Target equity multiple

2.2x

Inv share in excess profits

85%

Incentive fee

15%

Schedule

Payment schedule

Event based

Target term

4.5 years

Target liquidity event

Year 3

Structure

Tax document

K-1

Offering structure

SPV

Ann'l flat expense

0.25%

Slide 1 of 3
  • Returns & Management fees

    Annual management fee

    2.0%

    Target ann'l net return

    Login to view

    Target equity multiple

    2.2x

    Inv share in excess profits

    85%

    Incentive fee

    15%

  • Schedule

    Payment schedule

    Event based

    Target term

    4.5 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 IV LLC ("Fund"). The Offering is made only by means of the Private Placement Memorandum dated May 12, 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.