Two Masterworks Paintings Closed Their Offerings the Same Day. One Returned 142.8% a Year, the Other 16.5%

Masterworks Vault 1, LLC filed its semiannual report on September 23, recording the sale of the painting held by its Series 377. It is the vault's second completed sale, and placing it beside the first produces the clearest illustration yet of what an annualized return figure does to a short holding period. Both series closed their offerings on the same day, October 12, 2023. One was sold 76 days later and reported an IRR of 142.8%. The other was sold 930 days later and reported 16.5%. The multiples were 1.20 and 1.48.

The two waterfalls, side by side

Masterworks files a liquidation waterfall as an exhibit to the Form 1-U that reports each sale, and the two exhibits use the same arithmetic. Gross sale proceeds, plus cash on the balance sheet, less any sale expenses charged to the issuer, gives net liquidation proceeds. From that the Class B shares and the Class B profit share are deducted, and what remains is divided across the Class A shares outstanding at the time of the sale.

On Series 377 that chain runs from $450,000 of gross proceeds to $450,130 of net liquidation proceeds, less $100 of Class B shares and a $33,574 Class B profit share, leaving $416,456 for Class A. Divided across 14,108 shares it is $29.52 a share against the $20.00 initial offering price, which the exhibit expresses as a multiple on invested capital of 1.476 and an IRR of 16.5% over an IRR period of 2.55 years.

On Series 322 the same chain ran from $600,000 to $600,110, less $100 and a $24,270 profit share, leaving $575,740 across 23,933 shares. That is $24.06 a share, a multiple of 1.20, and, over an IRR period the exhibit puts at 0.21 years, a stated IRR of 142.8%.

• —Series 322, Ernie Barnes: $600,000 gross, $575,740 to Class A, 23,933 shares, $24.06 per share, MOIC 1.20, 76 days, stated IRR 142.8%
• —Series 377, Christine Ay Tjoe: $450,000 gross, $416,456 to Class A, 14,108 shares, $29.52 per share, MOIC 1.476, 930 days, stated IRR 16.5%
• —Class B profit share: $24,270 on Series 322, $33,574 on Series 377
• —Administrative service fee shares held by Masterworks at the sale: 83 of 23,933 on Series 322, 492 of 14,108 on Series 377

Why the same multiple maths produced a nine-fold difference

Both exhibits compute the IRR period from the final offering close date to the cash receipt date, and both series record the same final close, October 12, 2023. Series 322 received cash on December 27, 2023, which the exhibit puts at 76 days, or 0.21 years. Series 377 received cash on April 29, 2026, which the exhibit puts at 930 days, or 2.55 years.

Annualizing a 1.20 multiple over 0.21 years produces 142.8%. Annualizing a 1.476 multiple over 2.55 years produces 16.5%. The second series returned more capital per share than the first, $29.52 against $24.06, and the annualized figure is roughly one ninth as large. Nothing in either number is wrong. They are simply answering different questions, and only one of the two is a rate an investor could have expected to repeat.

The fee accrual moves the other way and reinforces the point. Masterworks is paid its management services fee in preferred shares that convert one for one into the same Class A shares investors hold, accruing at 1.5% of the segregated portfolio's total equity interests per annum with no stated limit. On the 76-day holding, 83 fee shares were outstanding at the sale out of 23,933. On the 930-day holding, 492 out of 14,108, or about 3.5% of the final count.

What this corrects in AltStreet's records

AltStreet's exit records carried this sale as a platform-reported entry captured from masterworks.com in May 2026, with placeholder dates of January 2022 and January 2023 and a low confidence rating. The filings supply the real dates and the filed waterfall, and the records have been corrected against them.

One element of the platform-reported entry turns out to have been the company's own filed figure all along. The 16.5% carried on that record appears in the Form 1-U exhibit, not only on the website, so it is filing-verified. What the website did not carry was the 2.55-year period that produced it, or the $29.52 per share behind it.

AltStreet's Masterworks review, last updated September 17, 2026, records the change of Chief Executive Officer and Chief Financial Officer that this semiannual report repeats in its subsequent-events note. Nigel S. Glenday resigned from both roles on September 1, 2026 and the founder, Scott W. Lynn, was appointed to both the same day, serving as principal executive officer, principal financial officer and principal accounting officer. That is not new information and is noted here only because it appears in this filing.

Why it matters

Vault 1 has raised $56,732,580 across 58 series and completed two sales. That is a thin record on which to judge a vehicle, and it is the whole of the evidence about what a full cycle pays. Both exits returned more than the $20.00 subscription price, at 1.20 and 1.476 times, and both did so with no sale expenses charged to the issuer.

The useful comparison is not which artwork did better but what the two disclosures show about reading any single annualized figure from this sponsor. A platform that sells a 76-day holding period can report a triple-digit annual rate on a 20% gain. The same arithmetic on a nearly three-year holding period, with a larger gain, reports 16.5%. An investor choosing between series cannot control which of those two patterns they end up in, because the sale timing is the sponsor's decision.

What the filings do not show

Neither exhibit states what the series paid for its artwork or when it bought it. The recognized gain of $177,982 on gross proceeds of $450,000 implies a carrying amount of about $272,018 for Series 377, but a carrying amount is not necessarily a purchase price, and no acquisition date is given. The IRR periods in both exhibits run from the final offering close, not from acquisition.

The per-share figures are distributions to the Class A class as a whole, which includes the fee shares held by Masterworks. They are not statements of what any individual investor received, and they are before tax.

This article compares the only two completed sales in Vault 1. It is not a sample from which platform-wide performance can be inferred, and Masterworks operates many other vaults and individual series with their own records. The FY2025 annual report shows no gain on sale of artwork for any Vault 1 series in 2024 or 2025, so no sale between the two described here has been omitted.

Artwork values carried on the series balance sheets are management estimates. The semiannual report states that the value management estimates has no effect on the number of SPC Preferred shares issued, and the financial statements in it are unaudited and have not been reviewed.