Q&A With Managing Partners of Liquid Rarity Exchange Part 2 – artmarketblog.com
Liquid Rarity Exchange (LRE) is a business method patent development and licensing company that has been granted the exclusive rights to the establishment of a new and innovative financial exchange archetype based on the securitization of tangible assets – in other words, a system allowing art to be owned in fractional shares and publicly traded for the first time.
Nic Forrest, Owner of the Art Market Blog, was recently afforded the opportunity to find out more about the venture from the managing partners.
See part 2 of the interview below. Part 1 can be viewed here
Q. Why will the Liquid Rarity Exchange succeed where others have failed?
- We feel that we have created a better approach with our model; however, we do not agree with the statement that others in this space have failed. Many well managed private art funds have enjoyed double digit returns and have outpaced the S&P 500.
- There is simply more information available now regarding art as an investment. In the last few years, global data has been gathered from several academic and professional experts such as the Maastricht University, ArtTactic, ArtInsight and the Mei Moses founders. Their expertise in valuation and in the study of art as a financial investment will help investors understand the market better than they were able to in the past. The LRE MGT tools will consolidate both qualitative and qualitative data. The Deloitte Art & Finance Conference has been recently established. These conferences address the business opportunities art and collectible assets could generate. Furthermore, Liquid Rarity Exchange is a board member of the “The Art Fund Association” – this association is the leader in establishing best practices and standards for the industry.
-We believe that the LRE Rarity Sector is not an alternative investment, but rather should be considered as another mainstream investment sector in the same manner one should consider energy stocks or telecommunication or consumer staples for example. We want to provide the average investor as well as the institutional investor a Rarity Fund investment choice as part of the investor’s diversified portfolio. Investment advisors will determine suitability and evaluate each LRE fund.
Q. What are the benefits of investing with the Liquid Rarity Exchange?
A. The benefits of investing in LRE Funds are to provide a diversified tangible asset investment, which has a very low correlation to the financial markets.
The fund will be managed in much the same manner as a corporation, with short- term ROI investment strategy, as well as intermediate and long-term (buy and hold). For example, a LRE Classic Car component could consist of lower costs muscle cars, which could be bought and sold with more frequency since the acquisition price points are much lower that Italian sports cars, which could provide a longer-term, buy and hold strategic investment.
Q. Will the antique and art market benefit from the development of the Liquid Rarity Exchange?
A. LRE believes that the overall benefit of the art market will be enormous. For the first time in history, millions of rarity lovers will experience pride of ownership and understand that rarities are mankind’s and the world’s treasures that must be protected and preserved. LRE’s basic principle is to get the public involved in ownership of rarities to achieve greater awareness while preserving these treasures.
Besides, we feel it will become a serious consideration of many investors’ asset portfolios.
Q. When will the Exchange be launched?
These funds will be registered with the SEC and offered to the public within the year.
Q. Explain what the investment process will involve?
Investment companies licensed to offer LRE Funds will file a prospectus with the SEC. Most Rarity Funds will be over $35 million dollars. There will be an initial public offering and the public will be allowed to buy shares. After the IPO, the shares will be bought and sold through a market maker until enough shares are trading for it to be on an exchange.
**Nicholas Forrest is a Sydney/London based art market analyst, art consultant and writer. He is the founder of the Art Market Blog (artmarketblog.com) which offers independent commentaries as well as research and analysis on the current art market, and has recently been published in Fabrik magazine, Verve magazine, Visual Art Beat magazine, Australian Art Collector magazine, Art & Investment magazine and many others. Nic has made several radio appearances (both nationally and internationally) as an art market expert and has received press from the likes of the New York Times, Conde Nast Portfolio and Times of London.
- Q&A With Managing Partners of Liquid Rarity Exchange Part 1 – artmarketblog.com
- 20×200 Suspended and Haunch of Venison Abandoned – artmarketblog.com
- Video: Skate’s 2012/13 Art Market Overview – artmarketblog.com
- The Lure of Long-Lost Art: William Webbe’s White Owl – artmarketblog.com
- Last Chance to Invest in Desirable Artists at Royal Academy Auction – artmarketblog.com