Pablo Picasso, Les Femme d’Algers (Version “O”), 1955.
Photo: Courtesy Christie’s.
In the past, wealth managers at banks haven’t been incredibly successful in retaining relationships with the children of existing clients. Citigroup Inc. is looking to reverse this trend. According to a 2014 study by the Center on Wealth and Philanthropy at Boston College, around $36 trillion is expected to transfer to heirs in U.S households from 2007 to 2061.
One method the bank is trying is to teach young wealthy heirs how to invest in art—a rapidly growing asset class in any elite player’s financial portfolio. Last year, record prices for art hit a new high.
Citi Private Bank invites the children of wealthy clients—most of whom are in their twenties but some are as young as 13—to attend an educational week-long event to educate heirs about sustainable investing, philanthropy, and entrepreneurship, reports Bloomberg Business. One seminar included a class on how to review quality, rarity, condition, and history of ownership of art. The seminar conducted in partnership with Christie’s auction house, consisted, in part, in doling out $100,000 in fake money to the participants grouped into teams for use in a mock auction.
Inside the salesroom during Christie’s record-setting $745 million sale.
Photo courtesy Christie’s.
First, experts from Christie’s helped members review a mock catalogue to determine the value of the work. Inside the catalogue real works of art that had been at past auctions were featured, including a Warhol Polaroid print of Giorgio Armani and a pair of earrings by Seaman Schepps once owned by Duchess of Windsor. After the mock auction was over, Senior Vice President of Christie’s Tash Perrin divulged what the work really sold for.
One example, reported by Bloomberg Business, included a team that bid $95,000 on a portrait of Kate Moss by Andy Warhol, which failed to sell in reality.
Citibank is not the only private bank to organize such events, Credit Suisse Group AG, Deutsche Bank AG, and UBS Group AG all have jumped on the bandwagon for “training camps” for heirs.
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