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Fractional ownership in collectables hits the UK

Fractional ownership in collectables UK

Dan Carter Co-Founder of Showpiece with the 1C Magenta stamp

Amid the current stock market volatility, armchair investors are increasingly seeking out more novel ways to protect their wealth and grow their returns.

While the world of fine art and rarefied antiquities has long been seen as the domain of a tightly-knit moneyed elite, all that’s beginning to change thanks to the acceleration of digital technologies.

These days DIY investors can buy shares in iconic collectables for as little as £50 — in the same way someone can buy shares in Tesla or Apple via an app on their mobile phone.

The trend towards fractional ownership in collectables, which began in the United States a few short years ago, has now arrived in the U.K. and is starting to make waves.

Pioneering the idea here is Showpiece.com who made headlines in November when it announced a public offering of the world’s most expensive stamp — the 1856 One Cent Magenta from British Guiana which they purchased at Sotheby’s in New York, for £6.2million.

Sales have been brisk with more than £1million worth of shares sold at £100 each to buyers from 50 different countries.

Many of them will be hobbyists — but many more are understood to be investors who see blue-chip collectables as a useful diversifier in these uncertain times.

Beginning in May, a secondary market will be hosted on the Showpiece website which will allow shareholders to trade the highs and lows of the “Magenta market” using just their phone.

It’s expected some will maintain a buy-and-hold strategy, sitting tight until a whale investor arrives to take the stamp back into private ownership.

In this instance, the rules governing a buyout are spelled out on the Showpiece.com website. “If an offer is made to purchase the whole item, all owners will receive a vote for every fraction they hold. If over 60% of the pieces voted are in favour of selling, we will sell the underlying item and distribute the net proceeds to owners pro-rata according to the number of pieces they hold.”

The Magenta stamp has been a rich man’s obsession for more than a century-and-a-half. Previous owners have included the the flamboyant American footwear designer Stuart Weitzman, and the philanthropist John E du Pont, whose murder trial was chronicled in the 2014 Netflix documentary Foxcatcher.

Experts say the stamp’s allure stems from the fact it is the only survivor of a small batch printed in haste on British Guinea after a ship from England thought to be delivering 50,000 stamps arrived with only 5,000 stamps aboard.

Postmaster E.T.E. Dalton authorised the publishers of the colony’s Royal Gazette newspaper to carry out a small print-run of much-needed stamps to keep post on the colony moving while they waited on a fresh shipment. To prevent forgery he ordered each stamp to be signed off by a post clerk to prevent forgery. The surviving stamp is signed ‘E.D.W.’ by the clerk Edmond D. Wight.

Once a schoolboy’s hobby, stamp-collecting and coin collecting — philately and numismatics to give them their proper names — are fast becoming big business.

Mr Weitzman recently sold a rare 1933 Double Eagle gold coin at auction for around £14million.

Meanwhile, Showpiece.com’s next offering will be the more modestly priced 1937 King Edward VIII penny, which never entered circulation owing to the monarch’s abdication just days before minting was due to commence.

In 2019 it sold at auction for £133,000, and its most recent appraisal of £200,000 — by the London coin dealers A. H. Baldwin & Sons — means its value has shot up another 50% in just two-and-a-half years. Shares in the coin are priced at £50 and go on sale on March 8.

Showpiece CEO Dan Carter said: “The challenge for us going forward is in deciding what comes next.

“It might be a Picasso or it could be a Banksy — but equally it could be an Aston Martin car from an early James Bond movie, or maybe even a menu that survived the Titanic disaster.

“I get so many suggestions that the possibilities are endless. We’re really only getting started but we’ve got the firepower behind us to stay the course.”

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