Advisers to the Ultra-Rich Try to Treat Art as Just Another Asset

A small conference in New York this spring brought together two secretive, expanding industries serving the wealthy: the art market and the family office. It was part of the Armory Show, a contemporary-art bazaar that sprawled over two Hudson River piers for five days in March. Attendees were pitched products ranging from art funds to derivatives linked to art prices. Nearby, a massive cube of what looked like concrete, priced at $350,000, defied gravity as it rotated in midair.

A family office is a firm set up to run a single fortune that’s too lofty to be left to the usual private bankers and wealth managers. Among the 185 attendees at the conference were representatives of the office of billionaire investor Steven Cohen and an executive working for a family of U.S. oil heirs who have about 900 pieces of Western and cowboy art in their portfolio. “Art is on the agenda of every sophisticated family office,” says Philip Hoffman, chief executive officer of the London-based Fine Art Group, which advises 125 families around the world.