Leslie Rankow Fine Arts

INTERNATIONAL ART ADVISORY SERVICE

Tag: art lending services

The future of the art market with Dana Prussian, Art Lending Service, Bank of American Private Bank

Dana Prussian
Art Lending Services
Bank of America Private Bank

THE ART BASEL AND UBS GLOBAL MARKET REPORT, AUTHORED BY THE RENOWNED CULTURAL ECONOMIST, DR. CLARE McANDREW, WHO FOUNDED THE RESEARCH CONSULTING FIRM FOCUSED EXCLUSIVELY ON THE ART ECONOMY IN 2005, REPRESENTS THE PINNACLE OF ART MARKET RESEARCH AND ANALYSIS. THE 2019 REPORT PROVIDED 5 KEY INSIGHTS INTO THE ART MARKET PINPOINTING A 6% INCREASE IN GLOBAL ART SALES WORLDWIDE, ACTIVE BUYING BY MILLENNIALS  AND A GROWING PARTICIPATION IN ONLINE SALES AS LEADING INFLUENCES IN THE CURRENT ART MARKET.

HERE ARE THEIR FIGURES:

Art Basel

1. The US retained its position as market leader

In 2018, the US sustained its position as the world’s largest art market, accounting for 44% of sales by value – or a total of $29.9 billion, the highest recorded level to-date. The UK regained its position as the second-largest market at 21%. China was the third largest market at 19%, with sales reaching $12.9 billion – a decline of 3% year-on-year.

2. Millennials emerged as active market participants

“A very positive finding of the research this year was the dynamism in collecting by global millennials.While respondents in the US were predominantly aged 50 and above, in Singapore, 46% of collectors surveyed were millennials, while in Hong Kong the figure was 39%. Collectively, millennials accounted for just under half (45%) of high-end spenders, underlining the importance of this demographic.

3. The online market witnessed continued growth

The online market reached an estimated new high of $6 billion in 2018, representing 9% of global sales – up 11% year-on-year.

4. Auction figures rose 3% year-on-year

While economic and political issues drove risk-averse buyers and sellers towards private sales in the dealer market, sales of fine and decorative art and antiques at public auction still rose in value, reaching $29.1 billion. High-value works had the greatest impact on this sum, accounting for 61% of total sales by value.

5. Art Fairs continued to shape the global market

Art fairs continued to play a central role in the global art market, with aggregate sales estimated to have reached $16.5 billion in 2018 – up 6% year-on-year. The share of the total value of global dealer sales made at art fairs was 46%.

https://www.ubs.com/global/en/our-firm/art/2019/art-basel.html

 

Lee Krasner
Free Space Blue, 1975

AT BANK OF AMERICA PRIVATE BANK, ART LENDING SERVICES, DANA PRUSSIAN, VP, HAS AN INSIDER’S VANTAGE POINT IN TRACKING THE EBB AND FLOW OF THE ART MARKET FROM THE PERSPECTIVE OF THE INDIVIDUAL COLLECTOR, DEALERS, AND ART AND CULTURAL INSTITUTIONS.

https://www.privatebank.bankofamerica.com/solutions/individuals-families/art-services.html

DANA, A WARM WELCOME BACK.

HOW DO YOU SEE THE CURRENT ART MARKET?

Even though total art sales has slowed since 2012, we’re still seeing a strong art market. Low interest rates and stratified wealth creation worldwide continue to drive capital toward art. The art market is ultimately driven by sentiment, so the greatest risk is a major geopolitical event that impedes global capital flow.

John Chamberlain
Chinati Foundation
Marfa, Texas

HOW DO YOU ANTICIPATE THE ARCH OF THE ART MARKET OVER THE NEXT FEW YEARS? DO YOU SEE A RETURN TO THE GALLERY SYSTEM OF THE PAST AND A RESURGENCE OF SMALLER GALLERIES OR FURTHER EXPANSION OF THE “UBER” GALLERIES?

We should keep our eye on how technology changes the landscape (online sales have yet to deliver meaningful scale or margin expansion), art fair fatigue, and new revenue opportunities for the major auction houses. I think the future of the gallery system will be based, in large part, on how a current push-pull resolves itself over the next decade.

The mega galleries, particularly the big 4 featured in Michael Shnayerson’s Boom (Gagosian, Hauser & Wirth, Zwirner, and Pace), are at a critical juncture. They are currently expanding their global footprints-and Chelsea footprints- in a big way. At the same time, the mega dealers who have built these empires are not getting any younger. We will have to see what their succession plans look like. With Pace, the Glimchers will look to next-of-kin, Marc. With Gagosian, Larry could be looking to Andrew Fabricant. It will be interesting to see how it all plays out. 

Evan Robarts
Untitled Tenant, 2015
Bruce Wolkowitz Gallery

DO YOU COLLECT YOURSELF?

Working on it! One of the many things I love about my fiancé, Joel, is that he was interested in art well before I met him in 2015. He owned a mix of prints and lithographs by Miro, Sam Francis, and Dali, all of which we brought with us when we moved into an apartment together. Since then, we have acquired a few pieces together, most recently a massive Evan Robarts Mop Painting from Bryce Wolkowitz Gallery. It’s a wonderfully textural black and white on linoleum from his Super Reliable series.   

Helen Frankenthaler
Mnuchin Gallery: The Art of Marriage

WHO ARE SOME OF THE ARTISTS THAT YOU WISH YOU OWNED?

A Chamberlain crushed steel sculpture is at the top of my list. Before he passed away, I had the chance to see Chamberlain at work in his Shelter Island studio, which is an experience that I will never forget. Of course, we are in the age of identity, so I would love to start a female collection: Grosse, Krasner, Frankenthaler…I would weep with happiness! Also Shantell Martin. I met her this summer at the Parrish Midsummer Party. She’s simply the coolest. 

Shantell Martin
New York City Ballet commission

DANA, THANK YOU SO MUCH! THE LRFA BLOG IS SO APPRECIATIVE OF YOUR INSIGHTS.

BANK OF AMERICA PRIVATE BANK, ART LENDING SERVICES, IS NOT ONLY ATTENTIVE TO THE FINANCIAL ASPECTS OF ACQUIRING, COLLATERALIZING AND DEACCESSIONING ART BUT ALSO TO THE IMPORTANT PLACE THAT CULTURAL AND CONSERVATION PROJECTS ARE IN THE CURRENT ART WORLD.

 

Katharina Grosse
Hamburger Bahnhof – Museum für Gegenwart – Berlin

 

 

Introducing Dana Prussian, Bank of America Private Bank Art Services, combining business acumen and a passion for art

Dana Prussian
VP, Art Services, Bank of America Private Bank

IN MARCH 2016, THE NEW YORK TIMES PUBLISHED A STUDY ON A TREND IN THE ART MARKET WHICH HAS BEEN ON THE RISE  FOR AT LEAST THE LAST DECADE: ART AS AN ALTERNATIVE ASSET AND AS COLLATERAL FOR A LOAN.

Highlights from

ART AS COLLATERAL IN A FICKLE MARKET, Scott Rayburn, March 7, 2016, New York Times

Art and money have long been closely linked, but in the 21st century, it seems, the two have become synonymous.

One way to extract the latter from the former is art-based lending, in which paintings or sculptures are used as collateral for loans. Now that the notoriously fickle and opaque art market is seemingly headed toward a downturn, with money tighter and the prices of many artworks lower, will this kind of niche financing become more attractive to collectors?

Art lenders who have offered full-recourse loans, secured by a range of personal assets, have faced unfavorable publicity. During the financial crisis of 2008-2009, the photographer Annie Leibovitz pledged her four homes and the rights to her images to secure a $24 million loan from Art Capital. She was unable to service the debt, and a high-profile court action ensued.

“This is an opportunity,” Andrea Danese, a co-founder of Athena and the company’s chief executive, said in a telephone interview. Mr. Danese said there was potentially about $150 billion worth of art in private hands that could be collateralized. He identified three groups to whom his company’s products might appeal.

“First, there are billionaires who put the money into private equity deals, where they make 20 to 25 percent,” he said. “Then there are collectors with, say, $30 million of art they leverage to buy another piece. And thirdly there are the art-rich and cash-poor in their 70s and 80s who don’t want to sell because of capital gains or estate taxes.”

But art lenders, like pawnbrokers, can get a boost when markets dip.

THIS UNPRECEDENTED DEVELOPMENT IN THE ART MARKET OVER THE LAST DECADE HAS RESULTED IN A FOCUS ON THE FINANCIAL ASPECTS OF ART. ART IS SEEN NOT ONLY AS AN OBJECT THAT IS AESTHETIC PLEASING OR CHALLENGING AND INTELLECTUALLY FULFILLING BUT ALSO AS A NEW ALTERNATIVE ASSET CLASS OFFERING INTERESTING BUSINESS OPPORTUNITIES. THUS, IT HAS PRODUCED AN OPPORTUNITY FOR EXPERTS IN THE FINANCIAL WORLD WHO ARE INTERESTED IN ART TO ENJOY EXCITING AND INNOVATIVE CAREERS THAT COMBINE THE TWO.

DANA PRUSSIAN, VICE PRESIDENT, ART SERVICES AT BANK OF AMERICA PRIVATE BANK, IS AN IMPRESSIVE, ARTICULATE AND KNOWLEDGEABLE WOMAN WHO IS  APPLYING HER INVESTMENT AND FINANCIAL BACKGROUND AND TRAINING TO ASSIST INDIVIDUAL COLLECTORS  AND ART INSTITUTIONS IN THE ACQUISITION, DONATION AND DEACCESSION ART AND TO USE ART AS AN ALTERNATIVE INVESTMENT VEHICLE.

Linnea in Monet’s Garden

THE LRFA BLOG IS HONORED TO WELCOME DANA PRUSSIAN.

DANA, SO MANY THANKS FOR TAKING THE TIME TO CONTRIBUTE TO THE LRFA BLOG. WHERE DID YOU GROW UP? DID YOU HAVE AN INTEREST IN ART AT AN EARLY AGE AND, IF SO, HOW DID THAT COME ABOUT?

I grew up in Louisville. My parents encouraged me to be active in the arts- I danced with the Louisville Ballet, took acting classes, played the violin. I’m not sure where my interest in fine art came about, though I do remember being obsessed with Linnea in Monet’s Garden when I was very young. Did anyone else have that doll? Book? Video? Childhood affinity for Giverny?

Diego Rivera Industry Murals
Detroit Institute of the Arts

WAS YOUR FAMILY INTERESTED IN OR COLLECT ART?

Not particularly, but my family has always supported the arts, whether it was the symphony, the theater, or the ballet. Much of my extended family lives in Bloomfield Hills, MI, and my aunt was a docent at the Detroit Institute of Arts (DIA) while I was growing up. I vividly remember visiting Rivera’s Detroit Industry Murals and the beautifully intricate Dutch Golden Age paintings.

Gerard der Borch, The Younger
Lady at Her Toilette
Collection of the Detroit Institute of the Arts

WHAT IS YOUR ACADEMIC BACKGROUND?

I moved to New York City 10 years ago to attend Barnard College at Columbia University where I received a degree in both Art History and Political Science. It was really my secondary school that influenced me more than anything. I went to Louisville Collegiate School, which is this very close-knit, traditional college prep school, and I still feel endlessly lucky to have attended. We had a required course, HATA (or, History and the Arts) that was a two-year world history class with corresponding art, dance, music, and religion. It was my first serious exposure to art history and the material was woven in this organic, experiential way. After that course, I moved right into AP Art History, and it was a love story from there. I ended up passing out of the first three levels of art history when I arrived at Columbia. Even though I was so influenced by Collegiate, that there is nothing, NOTHING like being an Art History student in New York City. My senior seminar was at the Met on Monday mornings (the good old days when the Met was closed on Mondays and we essentially had the museum to ourselves), and I vividly remember meeting classmates on the Met steps on crisp autumn mornings, taking class with one of the Met’s curators, and then heading down 5th avenue to Christie’s for my fall internship. You simply cannot replicate that experience anywhere else.

Johannes Vermeer
Young Woman with a Pitcher
Metropolitan Museum of Art

WHAT DID YOU INTEND YOUR CAREER PATH TO BE WHEN YOU FIRST STARTED WORKING?

My exact role, except it did not exist when I graduated!

IN OUR NEXT LRFA BLOG POST, DANA WILL START TO DETAIL HER PROFESSIONAL ROLES THAT LEAD HER TO HER CURRENT POSITION. GREAT INSIGHTS FOR EVERYONE INTERESTED IN COLLECTING OR IN FOLLOWING IN HER FOOTSTEPS!

PLEASE JOIN US!