NEWSLETTER

Family office insights this week:

• The growing influence of billionaires on art

• A podcast for the discerning art investor

• A landmark book on finance

• Is perfectionism just procrastination in disguise?

• Jobs: Senior executive, chief of staff, finance director

How billionaires are shaping the art world

Billionaires are using art as a flex and it’s impacting the market

Last year, Chinese crypto billionaire Justin Sun outbid several others to buy an art piece by Italian artist Maurizio Cattelan made solely of a banana duct taped to a wall - at a price of $6.2 million.

The sale shook the art world (sales of Picasso’s paintings in 2021 sold on average at approximately $8.8 million per artwork!). It seemed to mark a new er of billionaire largesse.

The influence of billionaires in the art world has become undeniable in recent years, as they shape trends, drive up prices, and transform art into a highly commercialized asset class.

As the number of billionaires worldwide has more than quadrupled since 2000, it has increased the pool of ultra-wealthy individuals capable of investing in the rarest artworks. 

Some are buying for status and recognition, but of course many collect as a passion. It’s also now part of wealth management strategies as an alternative asset to diversify portfolios. 

The value of art and collectibles owned by the world’s wealthiest individuals exceeds $2 trillion. This is a serious asset class and billionaires are influencing the entire ecosystem behind it.

Today we look at the effects of billionaire art collectors.

Commercializing the role of the art dealer

Billionaires have shifted the role of art dealers. Once seen as intermediaries, are dealers are now more business-oriented and commercial. 

Larry Gagosian is perhaps the best known example, positioning art as a financial investment to a lucrative network of billionaire collectors.

Modern art dealers like Gagosian have helped elevate contemporary art, with artists gaining massive attention and seeing their works significantly appreciate in value.  

Forming exclusive networks 

Billionaires have access to exclusive networks where art is exchanged and discussed in private viewings and auctions.

This enables UHNW individuals to build direct relationships with museum curators, dealers, critics, artists and galleries. Billionaires shape the tastes of other collectors and galleries.

Creating new art hubs 

Where the money grows, the art flows, and billionaires have helped the art scene expand beyond the more traditional centers. 

As centers of wealth have grown, cities like Hong Kong and Dubai have joined London and New York as global art hubs.

Billionaires have fueled the global expansion of art fairs where collectors and dealers meet to trade artwork on a global scale. 

Art Basel is perhaps the most famous example, growing from its Swiss origins to events in Miami, Hong Kong and Paris. 

The proliferation of these events has also made art trading more international, breaking down geographic and cultural barriers.

Aside from this, they’ve become a fixture on the billionaire calendar, an opportunity for wealthy buyers to get noticed and secure significant pieces.

Influencing art institutions

Art institutions often rely heavily on billionaire patrons for funding, which inevitably influences the direction of their exhibitions, acquisitions, and even their institutional culture. 

Billionaires that aim to leverage their influence in the art world may also establish foundations and buy cultural institutions themselves, often to steer focus and create demand for certain artists or artworks.

French billionaire François Pinault purchased Christie's auction house in 1998: just this month the auction house will host an exhibition at Frieze Los Angeles from his collection.

Creating a hype cycle 

Billionaire collectors spending lavishly has led to skyrocketing prices for contemporary art, as they drive up the demand for fashionable artists and pieces.  

Consequently, the market has become increasingly concentrated, with a small number of artists and buyers dictating the flow of art.

Consolidating the market 

At the same time as billionaire collectors drive the values of these artworks, there is an argument that they contribute to the recent slowdown in sales of the art market overall.

The last Deloitte Private and ArtTactic report stated that three-quarters of auction sales are generated by the work of a little more than 1% of all artists.

A tiny number of artists and buyers can move the entire art market.

The inheritance effect

The Great Wealth Transfer also affects the art market.

Aside from shifting preferences in art, many inherited collections are so valuable that when sold off in entirety, they contribute a material amount to global art world sales.

Late beauty mogul Sydell Miller’s collection sold last year for $216 million, which is dwarfed by the sale of the late Microsoft co-founder Paul Allen’s artworks, which sold for over $1.6 billion in 2022.

Let them eat bananas

Billionaires undeniably shape the modern art world: their influence drives up prices, shapes art trends, and can single-handedly decide the trajectories of artists. 

The concentration of wealth and their ability to influence the market does however raise questions about access, control and the future of the art market.

Regardless of these questions, as the number of billionaires continues to rise, their influence is likely to increase.

But how they invest in art and what their objectives are behind it, are ultimately up to them…

Just over a week after his $6.2 million purchase, Justin Sun ate the banana in front of a media-filled room.

𝕏 highlights

How Crypto’s richest man founded a family office.

Another story of a hedge fund that became a family office.

Readers: you are the smart people, you get it!

 💼 where to work

Three notable family office job opportunities currently open…

President of Membership - Family Office Exchange FOX (Chicago / Service Provider)

Chief of Staff - Private Family Office (New York / Single Family Office)

Head of Finance - Private Family Office (Singapore / Single Family Office)

📚 what to read

It’s a classic this week. The Ascent of Money by Niall Ferguson is a sweeping historical account of finance, tracing the evolution of money, banking, and markets from ancient times to modern capitalism. Ferguson argues that financial innovation has both driven human progress and caused crises.

📻 what to listen to

Here’s one for serious art investors. The ArtTactic podcast discusses the global art market and art investing. In each episode a leading figure from the art world is interviewed.

📺 what to watch

Is perfectionism just procrastination in disguise?

This is a fun 5 mi, but it has an important message. Youtuber Jon Youshaei argues that being prolific and not a perfectionist is the key to creative success.

And finally…

Next week is Valentine’s and love is in the air! It’s a look at the highs and lows of UHNW dating, marriage, prenups and trusts. 💗

The Buzz will be back on Monday as usual with a new section to look out for.

Here’s the last Buzz if you missed it.

There’s a website in development and it will become a lot easier to find the content you need. But for new subscribers, here’s a selection of newsletters from the archive:

Profile: How One Family Maintained Wealth for Centuries

Golden Passports Made Easy

Why Family Offices Are Turning to Fractional Talent

How to get a job at a Family Office

That’s all for today, if you haven’t already, come and say hello on 𝕏 or LinkedIn!

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