•  Art & Collectibles

Mintus Review -- 🎨 Fractional Investing in Fine Art

UK-Based Mintus offers fractional investments in Fine Art from artists like Andy Warhol

Mintus

  • Founded: 2020
  • Investment Types: Art & Collectibles
  • Sectors: Fine Art
  • Minimum Investment: $3,000
  • Must be accredited
 Pros
  • Low market correlation
  • Easy-to-use website
  • Open to international investors
 Cons
  • Short track record
  • Opaque fee structure
  • Sparse offerings
  • High minimum investment

Overview

This Mintus Review will help you learn more about Mintus's investment offerings, including how the alternative investments on Mintus are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.

Mintus offers fractional investments in fine art, from well-known painters like Andy Warhol and George Condo. UK-based Mintus was founded in 2020 by Tamer Ozmen, an executive who previously worked for Microsoft, Orange, and Priceline.

Fine Art has long been a popular alternative investment among the wealthy, and as with many other asset classes, is now much more accessible to everyday investors.

As is common with many private investment funds, Mintus and associated entities are entitled to substantial fees (some tied to performance, some not) associated with investments on Mintus. Before investing, you will need to decide whether those fees are reasonable compensation for strong performance. Put another way: if you trust Mr. Ozen and his team to acquire paintings that will appreciate by more than enough to cover the sizable fees and still deliver a strong return, then Mintus may be a good option for adding fine art to your portfolio.

Is Mintus legit?

Yes, Mintus is “legit” in the sense that it is a legitimate UK business offering a legitimate alternative investment option to accredited investors. Fine art is a legitimate alternative investment asset class, and there is ample historical price and performance data available.

Types of investments Mintus offers

When you invest on Mintus, you’re investing in fractional ownership of a specific work of art. According to Mintus they intend to hold the art works for 2-7 years and then resell at a profit.

To date, Mintus is offering fractional interests in two paintings, one by Andy Warhol, the other by George Condo.

What do you get when investing with Mintus?

When you invest in an offering on Mintus, you’re investing in fractional ownership of a specific collectible or work of art. As an investor, you receive a membership interest in a Special Purpose Entity, which is what actually owns the underlying art work.

While most US-based investment platforms use LLCs, in the case of Mintus investors receive Class A Shares in a “segregated portfolio company” incorporate in the Cayman Islands.

How does Mintus make money?

There are no direct fees charged to investors on Mintus to make an investment. That said, compared with other alternative investment platforms, the fees associated with investments on Mintus are relatively high. While they vary by investment, typical fees on Mintus include:

  • A “Management Fee” of 1.5% annually for the first 4 years
  • An “Operational Charge” of 8% of the total amount raised
  • An “Exit Fee” of 1% upon the sale of the artwork
  • An “Uplift” of 20% of the post-tax profits following the sale of any artwork

Note that those fees are deducted from the total amount raised for each offering (or put another way, they are capitalized into the full offering price).

Prospective investors should review the details of the specific offering to be sure they understand all of the fees associated with the offering.

Potential returns and cashflow

There is no ongoing cashflow on investments made with Mintus. Investors receive a return (if any) when the painting is sold, which according to Mintus is expected after a 2-7 year hold period.

Mintus shows several examples of appreciate for art similar to what’s offered on their platform, though investors should note those returns are shown without deducting the Mintus fees.

There is currently no secondary market for shares purchased from Mintus, though the company says they have plans to offer a secondary market in the future.

Breadth of offerings on Mintus

As of this writing, there are 2 current offerings available on Mintus, and they have previously offered 52 paintings.

Investors should note that their actual return will likely be quite a bit lower than the raw appreciation of the painting at auction because of the various fees and expenses paid to Mintus entities, as well as the 20% profit share that Mintus earns when a painting is sold.

Regulatory framework and due diligence expectations

Mintus does not provide much detail on their selection process beyond the following paragraph from an FAQ on their website:

Artwork is acquired through our unique relationships with the world’s most renowned collectors and galleries. Our Fine Art Team marries their own expertise with insights from fellow industry experts to identify one-of-a-kind investment opportunities from established artists with high-growth potential. Our team examines metrics such as the artist’s market track record, recent price velocity and momentum, and the size of their international collector base when making investment decisions.

Mintus does, however, provide prospective investors with independent appraisals at fair market value for the artwork.

Investments made on Mintus are offered in the US through SEC Regulation D and are open only to accredited investors.

This review was first published on 09 November 2022.


Our Rating

Very Good

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