When it comes to how the top 1% spend their wealth, US Trust knows a thing or two, being one of the largest private wealth management firms in the United States, if not the world. Anxious to remain attentive to the needs of its clients, the company conducts an annual survey of high net worth individuals who have entrusted it with the management of their money. Among the surprises that come out of his most recent survey of wealth and worth is a major shift between the sexes when it comes to collecting art, a traditionally decidedly masculine activity. In 2018, women made up about 36% of the collectors they serve, a dramatic increase from just 16% last year.
To better understand this demographic change, Muse caught up with Evan Beard leading US Trust National Arts Services Division.
Can you tell us a bit about how US Trust gleaned its knowledge of the art world?
As it turns out, US Trust is the world’s largest art lender. We created our National Arts Services group a few years ago to develop and adapt our client services in this area. We currently manage four types of activities related to the art world. We lend against private collections, primarily to private equity hedge fund managers and real estate principals who use it to inject capital back into other parts of their financial lives. Second, we have a team of around five art planners – most of whom are former trust and estate attorneys – who work with collectors, not only on cross-border sales and tax strategies, but also to structure trusts or entities to hold art, and make bequests to museums and other cultural institutions, everything related to philanthropic donations and the creation of private foundations. A third area of ââactivity concerns consignment negotiations in auction houses on behalf of our clients. And finally, we manage a hundred museum endowments across the country.
Collectively, our work in these areas has given us a window into the art space. Perhaps more importantly, we’re big enough to really see the art world as an industry in its own right and be very talented and suited to institutional and private collectors.
According to your last report, men still represent 64% of art buyers. However, they ceded part of this land to women. What explains this seemingly sudden increase in the number of women collecting art?
Historically, those responsible for building large, valuable art collections have been almost exclusively men, especially from the early 20th century onwards such people as JP Morgan and Henry Huntington. And until recently, it has continued to be dominated by men who make financial deals, whether that be art loans, sophisticated estate planning, or negotiating deals. auction around their collection. And almost all of them have been owners of private equity, hedge funds, real estate and independent contractors. These are the four paths to wealth that animate the art world in the United States. If you look at the art loans that we have in our books, especially the ones that made their money in these areas in the 1980s and 1990s, 95% went to Men.
But this is changing largely due to a shift in the distribution of wealth and new opportunities for women. Women have more control over their financial lives than ever before, at least in the United States where we have found that women are the primary or equal earner in four out of ten households; half of them have entered into a relationship with more working people than their partners. They start to diversify and become more independent in the way they allocate capital and some of that capital goes into art. In the past two years alone, we have extended more art loans to women, who now represent about 15% of our loans, and we expect the upward trend to continue.
âIn the past two years, we have given more art loans to women,
which now represent around 15 percent of our loans,
and we expect the uptrend to continue.
The report also showed that there is much more interest among women than men when it comes to buying art online.
There are some, especially among young women entrepreneurs. They’ve really taken the lead using social media, whether it’s on Instagram or through digital sales channels, places like Artsy or Paddle8. These platforms provide the convenience of not having to go through a lot of gallery nonsense or deal with the hassle of going to the auction. Thus, we are seeing more and more female collectors entering the digital channel. Not only are these easy entry points to the market, the prices are much lower.
And have you seen them go from selling online to auction houses?
Collectors new to the market often come here for decorative reasons. As they get richer, those with the collecting bug really start to improve their game. They see new artists on Instagram and follow the market more closely. As we see more and more women in leadership and industry positions – entrepreneurs, private equity executives, real estate executives, etc., who are independently wealthier or have more control over the business. financial situation of their marriage, this digital sales channel because art has just become a very easy transition for them. We’re also starting to see them switch to buying in online auctions only at Christie’s, Sotheby’s and Phillips, with some actually venturing into the auction room. Suddenly they come up to us and say, âHey, I’m really into this. Letâs be serious here.
Do you see them investing on an equal basis with men in the near future?
In terms of value, the current crop of major collectors are still the boys who made it big in the 1980s. However, as this group fades away, it’s clear we’re going to see a lot more. gender equity in financial negotiation in the art world.