Build Wealth Through Culture by Investing in Art with Clare Baukham
Did you know that you can invest in ART and add this alternative asset to your portfolio? Find out how you can own a piece of culture and legacy and diversify your portfolio, all while supporting emerging and established artists.
In this episode, we explore the unique world of art as an investment vehicle. Clare Baukham, founder of Clear Art Reserve, joins us to explain how fractional ownership lets you hold a piece of world-class art, why art can beat the S&P 500, and how cultural assets can build long-term wealth.
Key takeaways:
Fractional investing opens big doors: With Clear Art Reserve, investors can own fractions of blue-chip, mid-career, or even emerging artists’ works—without needing millions to get started.
Art isn’t just for the ultra-wealthy: Whether you’re new to alternative investments or looking to diversify beyond real estate and stocks, fine art can combine cultural appreciation with long-term growth potential.
Expertise matters: Selecting art with true upside requires deep market knowledge and a strong network. Relying on a specialized advisory team (instead of guessing or following trends) can give you an edge and help mitigate risks.
Whether you’re an experienced investor looking for your next strategic move or simply curious, this episode promises valuable insights into a truly alternative and unconventional investment.
Curious about adding art to your portfolio? Check out Clear Art Reserve and explore a new way to build wealth through culture.
Website: https://www.clear-art-reserve.com/
Instagram: @clarebaukham / @clearartreserve
Take the quiz - How Alternative Assets Can Fit in Your Portfolio
Time Stamps
00:00 Podcast Welcome
00:24 Why Art Investing
02:10 Handbags as Assets
03:26 Art as Portfolio Alpha
05:04 Origin Story Bel Air
06:12 Fractional Art Model
07:59 Collections and Allocation
11:22 Hold Period and Exits
12:44 Expert Network Edge
15:54 Market Dynamics and Risks
19:30 Mid Tier Artist Examples
22:01 Reporting and App Plans
23:05 Where to Learn More
23:45 Closing and Next Steps
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Podcast Welcome
Welcome to the Unconventional Investor Podcast. I'm your host, Michelle Moses, certified financial planner, licensed realtor, and founder of ME Financial. If you're an accredited investor feeling overwhelmed by managing your portfolio and looking for alternative investment strategies that go beyond the traditional stock market, you're in the right place.
Let's head into today's episode so you can start taking control of your financial future.
Why Art Investing
Hello everyone and thank you so much for tuning in. We have a very different topic today and I am really, I always say this, I'm really excited to talk about this. I wouldn't have her on if I wasn't excited to talk about this.
And I know that normally we talk about, a lot of real estate investments and investing in notes. And today we are gonna be talking about investing in. Art, and I cannot wait to hear about this and to talk about that. We have Clare Baukham and she is the founder of Clear Art Reserve, a private art investment initiative, creating the unique opportunity for investors to diversify their portfolios while simultaneously building wealth through culture.
Thank you for joining us. Thank you for having me. Excited to be here. Yeah. I and I was telling Clare before we got started that I was, I am having her on because I was listening to a podcast about something completely separate. It's about wellness and the host was talking about how she buys expensive handbags because she can resell them and get her money back.
And I was like, God, I've never even thought about that because. I was just thinking, oh, this whatever, $200 handbag is just fine, because then I'm just gonna give it away or sell it at the thrift store or, whatever. And and then when I saw this come across, because I have always thought about art and how much it adds to your life because your.
I think anybody that's into art and into doing houses, you understand that an aesthetic and that art really makes a difference in your life. And and so I would love to talk about this, so I'm very excited to get into this. Clare, could you give just an overview of what this is and what you do, and then we'll get into some nitty gritty of the details.
Yeah, definitely.
Handbags as Assets
Actually, let me say something about the handbag. Oh, okay. This was of interest. Yeah. This was of interest to me as well, so I looked into it. Because I thought alternative assets. Ooh, let's buy some Hermes or some Chanel. So I actually started to look into it, and I have a few experts who are in the fashion industry and they said no, Clare, you don't understand those handbags that will go up like eight to 14% or whatever, 20% a year.
Those are reserved. You've heard about that list that we can't all get on. And if you walk into the, say the Hermes store on Rodeo Drive, I'm going to LA next week. So I have that on my mind. You walk in there and you say can I get the limited edition such and such Hermes? And they're, oh no, we're at we're outta stock.
Or No that's reserved for somebody else. So it's very difficult to actually get your hands on them. If you can, great. Then yes, you have a good you have a good investment on your hands. Probably don't even use it, right? 'cause you want it in prime condition. So it's interesting because when I was looking at something else outside of the regular, traditional investment space and when I came across art, I actually couldn't believe I couldn't believe what I was seeing basically.
Art as Portfolio Alpha
And I think a lot of people, that's why they listen to the podcast and why I have a lot of clients is because they're tired of just the stock market. Like they want to enjoy their wealth, but they also want it to grow and they want it to do something. Which is why the alternative investments are sometimes great.
And I think that's why there, the Airbnbs were great, for a while and. While people love to invest in something that they act, they understand because a lot of the stock market and derivatives and options, they don't understand 'em. It's just, they're not tangible. You can't put your hands on them.
So I could see art b in the same way. Exactly. I came from options trading, so I, you're speaking my language. I totally understand how convoluted those things can be. And then when you put them in front of people who, a lot of my clients are entrepreneurs. They've built businesses, they've sold businesses.
But they come from, a lot of them come from the trenches and when you, they're not going home at night. And you know this with what you do as well to look at tax codes. Should I put money in the 401k? All of those, they're not looking at all that. They're just home with their family and they're done for the day.
And if they're a constructions business owner, for example, this is the last thing from their mind, right? So it's our job to bring those. To the people, right? So I totally agree with your traditional portfolio, that's your beta, right? You're making your 8, 10, 15, whatever percent based on your risk profile return every year.
Great. But like you said, that little piece of the portfolio, that's your alpha, what are we doing to create alpha, right?
Origin Story Bel Air
With my journey, I actually ran into, I was studying in a $65 million mansion in Bel Air one year studying mindset of all things and, mindset, business growth, all of those like a, almost like a Tony Robbins, but a little bit different.
So I was studying and I got to really feel the feeling of being in this mansion in Bel Air, I was there all day. I went and I changed and for dinner. 'cause we all got to, use the rooms upstairs and I came down. And there was the owner and I thought I would love to meet the owner of this place and let him know how much I love it and how it's changed my life today.
Right? So I went up to him and I met him and right beside him was the art dealer. And the art dealer said to me, have you ever thought he knew I was in wealth? And he said, have you ever thought about art as an asset class? And I said, I have. But traditionally, we're not trained in that. So I started to go down the rabbit hole and my favorite story to explain Clear Art Reserve and why it was born.
It's, everyone knows Andy Warhol, right? It's super well known like the one of the masters, right?
Fractional Art Model
So when there was an Andy Warhol painting that was two and a half million dollars. A lot of people, even at an accredited level, they may not be buying that one painting unless there's a big passion for that artist or that piece in particular.
They're not gonna put two, they're not gonna allocate two and a half million dollars to one painting, not necessarily however. Five years later, that painting sold for $28 million. So that's 1,020 thousand and 40% rate of return over the five year period. So a lot of people, their jaws usually drop when I tell them that story and they think, oh my goodness, couldn't I just buy the corner?
'cause I don't wanna allocate that much of my portfolio. And I said Yes. And that's exactly what I did, is I buy the painting, I will cut it up, I'll sell you a share them a share me a share, and I sell. So we basically have fractionalized. These beautiful pieces of art, which are, as we mentioned, mid-level and blue chip and some masters as well.
We do have some conversations around, getting into your 50 and $60 million pieces depending on how much capital's coming in at that time, and where is the art once you buy it Then. Usually we have it sitting in a a storage facility that's meant for not like your typical warehouse. It's meant for fine art, whiskey, cigars, like all of those collective, the bags.
We just talked about all those collectibles would be stored there under proper climate control. However we are looking now that we're growing and growing at, having almost like a gallery space that's not open to the public every day, but so that our collectors can go in and take a look at that piece of culture that they've invested in.
Yeah, absolutely. I think that would be some, like a selling point, that you invest in part of it. Yeah. And then you would be able to go and look at it.
Collections and Allocation
And so do you pick when you're, like, when you're investing, do you pick whether you're doing like a blue chip or a mid-career or the different levels?
Are there three different levels or are there two. No, the there's probably four if you're looking at masters, which the masters are still they're a blue chip as well. So masters, blue chip, your your mid-level and then emerging. So very much like a stock portfolio where you're gonna throw in emerging markets, some Europe, some US and Canada da. You're, so we, every collection we put together usually has six or seven pieces and it will have something from all of those areas. So I am. Still in that advisor mode in thinking, okay. But there still needs to be, if somebody's gonna come in and they have a, they say they, let's say they bring in $2 million.
That 2 million may be spread across a few different collections. It may not just go into collection 20 or whatever the number is because maybe there's another piece that we know is coming in that I think would be really good for that person. Sometimes they wanna pick, they wanna see what we have in the collection, and that's absolutely fine as well.
But most of the time, as when you are, you usually are the one picking the portfolio for a client. It's not usually, unless they have a little bit of that background, you're not, they're not usually gonna be a. Because when they're investing, they're trusting your expertise that you know what to pick and you know what to put in there that's going to appreciate.
And so when you're buying these, like how long does the fund stay open to for you that you're raising funds? And then how long do you hold [00:09:00] onto the art before you sell it? So far the collections will be purchased, but they get filled right away. So we have a lot of capital we need to deploy. And it's more about, it's funny, somebody asked me this, what is it more of a problem that you have more art or more capital?
And right now it's been great. We've had, there's always lots of art that we wanna buy. We have a lot of that information, which in the stock world is illegal. So now having that information on a certain artist who's going big is. Totally legal and part of the market, right? And so having that team behind you, who knows which artist is going where is crucial, right?
So yeah. So they'll get spread and allocated, but it. It really depends on the individual as well. And what they would like to see. Okay. How they wanna be involved. Okay. Yeah. Oh, so that it's not like a set fund. You can actually say, okay, I just wanna buy a piece, no one piece of art.
Or they could say, I wanna buy two pieces of art, or, you'll probably [00:10:00] advise them, I have this much money, what can I do with it? Yeah. Okay. I have had some younger children of some more affluent clients come in with, 10 or $50,000. They'll then we will, we'll have a conversation about, let's just wait.
Let me hold onto the funds for now. But we don't pool the money. That's what makes it really interesting as well. I know there's another larger company that does pool all of the assets together. We don't do that. So we're literally selling fractions of these painting. Okay. Rather than shares of a fund.
Okay.
Hold Period and Exits
And then how do they know, I guess you're just advising them on what to do, and then do you advise them on when to sell it also, or do people just come to you and say, I'm ready to sell, I want to get out of this? 'cause I assume that there's good times in the market and then there's bad times in the market to take advantage of.
Absolutely. Yeah. And not like the stock market. It's more. More good than bad. We rarely have those downturns like we do in the stock market. It's up to us when we need to sell, and they know that when they sign their subscription agreements is, it's not if now if they have an emergency situation I'll buy the shares from them, or someone will buy the shares from them.
So we can take those back if we really need to. But no, the idea is that we're looking at least a five year hold in some cases longer. I always tell everyone that if you're gonna come in and we're at say, a three year mark or a four year mark, and we think we might sell, but we think that if we waited a year that if, let's say we're gonna go to auction, or we may have a private buyer on the exit side.
We may wait. If we're gonna get another X amount of return, why would we, it's it's almost like knowing a stock is gonna go up another 10 or 20%. Why would you sell it when you know you're gonna get that extra gain, right? Yeah. So that brings up another question.
Expert Network Edge
So how do you what is your sphere of influence?
Like to know all of this and to, who are you networking with or working with? Do you have other advisors? Can you speak a little bit about that, about what that world is like? Yeah. I am very clear that I am more the capital side to everyone. I have a, now I have a great education in the art world, but I do not try to make the decisions on my own.
I have a team of. The best in the business that I have sought out. One of them was the gentleman who I met in the mansion, and that was how this all started. He's now become the portfolio manager for us. And then within his network, because he's been doing this for 20 plus years, we have people who are like market makers.
They'll see an artist bring them in, do like a residency with them, but then when they're done, their pieces that we're maybe selling for a thousand or 2000 are now selling for 10 or 15. And in fact, in a few years time, we'll be selling into the millions. So we have those surrounding. Oh, so you also help some artists break out also?
Yeah. Oh, that's nice too. I'm sure the artists really appreciate that. Yeah. Also the exposure. They do. Yeah, they do. Yeah. Just life changes drastically for them. Yeah. Yeah. It's really interesting. Yeah. And I think it's probably like any other, networking and knowing who is who and who has what gallery and just like any other industry.
Yeah. There's a whole world around it. There is. And I, and that's the funny thing is I never knew about it and I don't know if, will you, as you mentioned at the beginning of the call, this is something you've always wanted to know about. It's such a fascinating industry and it's much like the fashion world but different, because art as well, art represents culture and legacy to a lot of these families where they're looking for something to put their money into.
That is. So sometimes we get into a much longer term hold. So it's not necessarily that we're not trying to flip, but it's not necessarily that we're trying to make a big return on it, it's to park money for the next generation. So we've done a lot of estate planning. I, that, that was what I did the most of in my career when I was a financial advisor as well, was advanced estate planning.
So that conversation, it's funny because my past life has helped me into this as well. Oh, I'm sure. Because those are the conversations that. That level's having, and because it's that they need to have the base portfolio of, the stocks and the real estate and all of that.
And then this, the kind of, I, I think of this as when people are investing in wineries and or individual luxury hotels, you start to get into some of this stuff that just tends to be more fun, I think, for people. Yeah. But you need to have that base that is. A little bit more protected, exactly.
Market Dynamics and Risks
And the beauty of art is actually, it's funny you say wineries. 'cause we have a friend who growing up his family had quite a bit of affluence as well. And he said, I never understood, but my family would say, okay, we need to go buy a winery to take care of some tax issues that we're having.
Yeah. So it's really funny. But art is interesting because. When I was first learning about all of this, I remember I was at the Santa Monica airport for freeze, which is coming up actually next week. Their art week, right? And I was talking to my team and I said does this not go down in price?
For example I had just purchased a $30,000 piece myself. I wanted to see how it went before I started the whole project. And they said, no it won't. Once it's evaluated at a certain price, it's not gonna go down. And I said, what if this is, remember we went through the whole, the Harvey Weinstein and the Me Too and all of that?
I said what if that kind of thing happens? And they said, you know what? The art market is so interesting that people would actually collect more because there's now fame around that artist. And I said, what if the artist passes away? And they said, unfortunately that's even better. Yeah, that makes it rare.
'cause now they're not making any and that makes it rare and yeah. And better. Yeah. Yeah. So there's no instance where the art actually goes down. It's more about holding it for it to appreciate and do you have enough time for it to appreciate Exactly. Yeah. Exactly. For the pieces that we look, so Art has beat the s and p 500 for the last 25 or 30 years.
So that's pretty decent. It depends on what sector you're buying in and who you're buying. So clients will get excited and just start going to buy it, whatever. It's not whatever, it really has to be a specialized decision, otherwise you're not gonna be able to make that return. Okay. So and that's ultimately what certain it, certain artists, it's certain artists that have that clout that the price will not go down.
But there's others of, if you're just out there buying, you don't know necessarily what you're doing. Like you don't know if what they're doing is exactly like somebody else across the country. And so that's why you need an advisor to do it. It is funny you say that as well. I was, I, so I'm in Mexico.
I live here in the winter 'cause I have to get out of Canadian winters. It's very snowy at home apparently. I was down at the pool yesterday and actually I ran into an artist and I was talking to my my, my PM about it and he said a lot of artists will, they almost look like they're copying another artist who you can't get a piece from them because they're just way too popular.
So he said, some artists, they don't get beyond that, that peak level. So you have to be very careful. It's not a go by art and it'll appreciate, it's really, you need the specialized team behind you. We also will do individual sales as well through my team. So we have a lot of like higher net worth where, you know, what they would like the piece in their house.
Matisse, Picasso, like all of that level. I think my partner's working on an $85 million Picasso right now, we do have those as well where they wanna hang it in their their main room. Or their living room or whatever. So we don't always do the shares. So sometimes, but sometimes you'll help people just, sometimes it works out.
And so I imagine that we all know what Blue Chip is. The Picassos. The Matisse, like all, we know a lot of people know all those.
Mid Tier Artist Examples
So who would be like the mid-tier? You mean like you want me to like actual give you art? Yeah. What or examples of what that would be? Yeah. Are there certain.
Yeah. A person or a quality to it or? Yeah. They'll range anywhere from, it's more of a price point and whether there's heat under them, whether there's buzz around them. So for example, we got word that a particular artist. Her paintings were going for like between 22 and 30,000, but we got word that she would be represented at a very prominent gallery in the uk and she would do a two year residency with them.
And so your cv, your resume, you build up. I used to be an actor, so we would have to build up films that we've done underneath us. A painting will build up provenance. Underneath it. So the more places it's been or, and the artists will build up that CV as well, right? So the more prominent galleries, it gets exclusive access or get, they get exclusive access to that artist and so on, right?
So once we got word of that that person went from say, 22,000, which in the next few years will be selling into the a hundred thousand. That's wonderful. So it's those mid-level or anywhere from that price point into the few hundred thousand. Okay. So that somebody could come in and theoretically have an art piece if they wanted to invest 25,000 or $50,000 and they were really hung up on having it in their house.
Like they wanted something that you know, that to hang over their fireplace or something. Yeah. Okay. So anything we're selling shares of? No, because it's, then everyone's gonna get jealous that you've got custody of the child and they don't. Oh so what percentage of people shares, what percentage of people do shares versus owning the actual art themselves?
Right now. My pm has been doing this for over 20 years, so he has a huge client base who just wanna own the piece themselves. But for Clear Art Reserve, I would say like 95% would be through shares. Oh, really? Okay. And then there's just some people that wanna Yeah, because I normally refer, yeah.
I refer them out to the other team if they wanna own it. Okay. All right.
Reporting and App Plans
And so then you're managing, and so then it's more a long term thing and they get, do they get like statements or something like that about their shares and then updates about when you might sell it? We're working on an app right now.
The world nowadays with all this digital is you can go and create your own, you can use somebody else's back office. So we're playing with which way we wanna go next, because now we're just, we're getting too big. So we really need to start allowing people to see their money.
Not much will change on the day to day. It's not like the markets, probably be updated every other month. So it's. Not as volatile and exciting. If you'll, but it's a little bit boring once you invest in it. And I get that. Yeah. Because that's how a lot of the alternatives are, is I'm like, then you're gonna just sit here for a couple years.
Yeah. It's like private equity, right? Like we've been involved in the private equity space and you're like. Okay. Yeah. Here's the two 50 and we'll see. Yeah. And then we're just gonna wait a little bit and see what happens. Yeah. Okay.
Where to Learn More
And so where can people find out more if they're interested in checking you out and, and finding out more information?
Yeah. Social media my, at Clare Baukham, we have at Clear Art Reserve on Instagram or just the website's. The best, I think is just clear Artreserve.com. Okay. And you guys, I'll have that in the show notes. If you need to have the link to check out this investment. And Clare, thank you so much for being on and enlightening us about investing in art because this is definitely something that I have been interested in.
And so I'm glad to learn more. So thanks for taking the time to be on today. Absolutely my pleasure. Thank you.
Closing and Next Steps
And you guys, thank you so much for listening. Let me know if you have any questions or if you have any ideas for shows. I would love to hear them and I hope that something special happens to you today.
Thank you so much for listening. Thank you for listening to The Unconventional Investor Podcast. I hope you feel more confident in how you can grow your wealth using the strategies I shared in this episode. If you're ready to take the next step in diversifying your portfolio outside the stock market with alternative investments, head to me financial.net/contact us to book a 15 minute consult call with me.
Let's discuss how we can work together to achieve your financial goals. Until then, I'll see you on the next episode.
Disclaimer: The information provided in this podcast is for general informational purposes only and should not be construed as professional financial advice. Always consult with a qualified financial advisor or professional before making any financial decisions. The hosts and guests of this podcast are not responsible for any actions taken based on the information presented.