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One of the biggest ways that the investment landscape has evolved in recent years is through fractional ownership of expensive assets like art, high-end real-estate, and other cherished collectables once only available to the ultra-wealthy.
Now, companies like aShareX and Arrived are leading a revolution with a concept called fractional ownership for alternative investments. This innovative approach is making it possible for just about anyone to invest in alternative investments. That was once out of reach for most people.
Understanding Fractional Ownership: A Gateway to Exclusive Investments
Simply put, fractional ownership means you don’t have to buy a whole asset to invest in it. Instead, you can own a part of it, like owning a piece of a pie, and not the entire pie. This method is not entirely new — it’s been used in various forms, such as shared vacation homes, fractional stock ownership, mutual funds, just to name a few. Now, thanks to technology, it’s becoming more popular and accessible, especially in alternative investments like art.
The How-to of Fractional Ownership: Democratizing Ownership
The essence of fractional ownership is teamwork and economies of scale. Investors pool their resources to collectively own a part of an asset. This process is usually organized through companies that set up a legal structure to hold the asset. Some companies, like aShareX, use auctions to sell shares of the asset, allowing people to bid on either a fraction or the whole item. This process expands investors’ options, brings a missing cohort of bidders to auctions, and allows investors to own a share of an expensive painting or a piece of real estate without buying it outright.
Breaking Down Barriers
Historically, investing in high-value items was exclusive to the ultra-rich and big institutions. This left most people on the sidelines, unable to participate in these potentially profitable and non-correlated opportunities. High upfront costs and the complex nature of managing these investments were significant hurdles. But the rise of fractional ownership is changing this, making it easier and more affordable to diversify investment portfolios with alternative assets.
Based on information provided by aShareX, since 2017, as an industry, over $1 billion of art and collectible assets have been securitized. This includes some well known artists such as Basquiat, Banksy, Monet and Warhol. At least a few hundred million of real estate assets have been securitized. Arrived, on their website, says that $128M of property value is owned by investors.
aShareX and Arrived: Democratizing High-Value Investments
Fractional ownership platforms like aShareX and Arrived have opened the door to investments in art and more.
Arrived focuses primarily on real estate. With as little as $100, investors can buy shares in single-family homes or vacation rentals. Arrived takes care of all the management, offering a hassle-free way to invest in real estate. Backed by big names and with hundreds of properties funded, Arrived is making real estate investment accessible for everyone. The company is backed by some well-known investors including, but not limited to, the SalesforceCRM.com founder Marc Benioff, through Time Ventures, the Zillow GroupZ former CEO Spencer Rascoff, and the UberUBER CEO Dara Khosrowshahi. Other companies also offer fractional ownership. Here’s an example, not from Arrived, where someone can only invest $129,000 and get fractional ownership in a stunning Lake Superior house.
A Better Way to Invest
aShareX and Arrived solve the flaws of traditional alternative asset structures. Both companies anticipate allowing investors to trade their shares in a secondary market improving their assets’ liquidity profile. aShareX goes even further by giving investors an entry point at the assets true market-based price and offering investors control over exits. “It is past time to empower investors,” Alan Snyder, the CEO and founder of aShareX said. “They are putting up the cash and paying all the costs; they should have the control over their investments.”
The Advantages of Going Fractional: Why It’s Worth Considering
Investing through fractional ownership comes with several benefits. It allows for diversification, non-correlated returns, and spreading out various risks across different assets. It also provides access to markets like art and real estate, which often move independently from the stock market, potentially offering balanced returns even when other, more traditional, investments are down. Plus, it’s flexible, giving investors the chance to be part of something bigger without the full responsibility of ownership.
Expanding Horizons: Arrived’s Impact on Real Estate
Arrived is changing the game in real estate investing. By lowering the entry point, it’s inviting more people to invest in property markets across the U.S. With a growing portfolio and a focus on investor returns, Arrived is a prime example of how fractional ownership is evolving, offering new ways to invest and grow wealth.
Conclusion: A Bright Future for Investing
The rise of fractional ownership signals a new era for investors, where access and opportunity are more widely available than ever before. As platforms like aShareX and Arrived continue to innovate, the promise of inclusive, diversified, and accessible investing becomes a reality. This revolution is not just about opening doors to high-end investments; it’s about leveling the playing field, offering everyone a chance to invest in ways that were once unimaginable for the masses.
Disclosure: In the past I have done consulting work for aShareX.com. I do not have a financial interest in the company or any company mentioned herein. No investment advice is being given. Everything is for general informational and educational purposes, only. Past performance is not indicative of future returns. No earnings claims are being made. Results are not typical. Investing involves risk.
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