Vintage Wine Sale Prices in Asia

If you hold low-cost stock of great Burgundy and Bordeax wines, it pays to know what attracts the interest of Asian wine enthusiasts, who are buying up rare vintages for investment reasons. Our colleagues at Barron’s Penta Asia recently published an interesting article outlining how the latest Sotheby’s wine sales went in Hong Kong. The top seller was  a bottle of Domaine de la Romanee-Conti La Tache 1990, which sold for HKD50,000 ($6,500.)

Our take: If you own low-cost stock of Romanee-Conti, consider selling. Such prices won’t be around forever. Eventually some other vintage du jour will grab the interests of Chinese and Russian moguls.

Deluxe Hospital Stays

A hospital stay usually means institutional rooms and worse food. But over the years, an appealing choice has emerged. A number of major hospitals have built deluxe wings for in-patient care, as are common in the best private hospitals in Europe, and they can feature gourmet chefs, private dining, concierge services, sleep-over accommodations for guests, designer décor, Wi-Fi, abundant entertainment choices, and more.

Phillips House is a long-running upscale unit of Boston’s Massachusetts General. The name refers to its first location, for wealthier Bostonians in the 19^th century, who discovered that in-hospital care was actually better than their private in-home care. Phillips is now on the top three floors of MG’s Ellison Building.

Bessie Manley, Phillips’ nursing director, says the 59-bed site draws an international clientele, including from the Mideast, as well as politicians and sports stars. Those who specifically request the wing pay a fee of “about $400 above insurance,” per night, she says. In all cases, ask what is included in the basic room charge, and what – such as a manicure or a massage– might require additional fees. The Phillips House amenities mirror those of its peers, and includes enhanced security, specially prepared meals, unlimited visiting, guest facilities, and stunning views.

Knowing the Family History

A family’s code, its set of defining characteristics, is left in traces all along the family tree, which is why later generations, born into wealth, are wise to better understand their family’s humble roots, and how their family reinvented itself over subsequent generations. That understanding of the ancestral code will help current family members define their mutual goals and objectives. For such reasons, private bankers at Abbot Downing, Wells Fargo’s advisory for clients with $50 million in assets or more, are ordering up history lessons for their clients.

Abbot Downing’s in-house history team of nine is led by chief historian Andy Anderson; they assemble for each family a dossier of pictures and historical documents, from naturalization papers to passenger lists. Those documents tell the story of each family, chronicling back at least four generations. The reports can take between five weeks to six months to compile, and are available at no extra charge to Abbot Downing’s clients.

Anderson has occasionally discovered family members who were slave owners, had entirely separate families, children out of wedlock, and drug addiction. In such cases, he discreetly passes the information to the patriarch and matriarch, concerned that it might not be suitable for children’s ears. Still, having a frank discussion about the family’s past is important because the ultimate goal is to ground the family and discuss the values that will carry them forward, says Anderson.

The Zaslow family is from Wyncote, Pa., and built a small linens store into ATD-American, a major manufacturer and supplier of textiles and furniture. The family knew bits and pieces of the hardships endured by their Eastern European relatives before coming to America, but they asked Abbot Downing for the full story. “Where we’ve been will determine where we’re going,” explains Arnie Zaslow, 84, a second-generation heir.

Collectors: Limited-Edition Books

As avid readers drop hardcovers for E-books, some collectors are bucking the trend and snapping up well-made limited-edition books. Collectors say we are reaching an inflection point, where dust-collecting books will, in this digital age, be increasingly bought and displayed like artwork.

That’s certainly the call of Barnes & Noble (ticker: BKS) founder and chairman Leonard Riggio. At Riggio’s upper-East side apartment on Park Avenue, he stoked interest in his ever growing collection of works produced by the limited-edition bookmaker Arion Press. Particularly telling was Riggio’s four Arion Press books – including Sampler by Emily Dickinson and Porgy & Bess by Du Bose Heyward and Ira Gershwin – prominently displayed on a sideboard cabinet. The books were tellingly positioned below a cubist Picasso portrait, signaling to all of us in attendance what he thinks of his new collectibles.

The Riggio soiree also commemorated the printing of Arion Press’s 100^th book, Walt Whitman’s originally self-published collection of poems, Leaves of Grass. The book’s pages were printed on hand-made cotton rag paper from England and hand-fed through a 1920s platen press. Perhaps an indication of growing interest in this archaic form of quality bookmaking, since announcing the book’s production in June, all 275 of the copies have sold for $1,250 each.

Philanthropic Speed-Dating

The Wealth & Giving Forum is a small but respected peer-to-peer network of wealthy individuals who gather annually to share best practices on charitable giving. Their annual event recently took place at the Rubin Museum of Art in New York, and had speakers like billionaire investor Ron Baron reflecting on the connection between his investments and his philanthropic works.

But one of the best segments of the Wealth & Giving Forum workshops always takes place when Glen Macdonald, the organization’s president and a Hillview Capital Advisor senior vice president, invites up on the stage nine philanthropic thought-leaders. The philanthropists are allowed to pitch the audience in rapid succession in a kind of speed-dating game for the eleemosynary set. Each philanthropist has only a few minutes to tell their life story and woo the audience to their cause, and while it sounds hokey, it’s remarkably effective in quickly conveying a sense of the person and their deeply-felt cause.

Funds That Buy Medical Patents

For investors looking to cash in on tomorrow’s blockbuster cancer drug, buying shares of richly valued biotech stocks might not be your best option. A “bond-like” alternative is buying a private equity fund that specializes in purchasing medical royalties, fees that flow from licensing its patents to other manufacturers.

Essentially, fund managers that have raised funds from investors, buy a diversified basket of ten to twenty five different drug and medical device royalties, treating diseases ranging from cancer to rheumatoid arthritis. The specialty funds doing this kind of work employ doctors and physicians, as well as financial analysts. They identify cash-strapped drug researchers, like universities and biotech companies, and buy their neglected patents, before partnering with a manufacturer who can produce, distribute, and market drugs derived from the patents. Yields, net of fees, can exceed 10%.

With 10-year Treasuries earning just 2.3%, while junk bonds yield just 5.5%, Michael Eisner, chief investing officer at Market Street Trust, is investing in medical royalty funds for his clients. “They offer a stream of payments,” he says, that are like a bond and “uncorrelated to the stock market.” Plus, “It is one of the easier alternatives to discuss with clients,” Eisner says. Everyone uses drugs and entrepreneurial clients often know the royalty game from their own businesses. (Read more about Market Street Trust in our Penta Daily, “A Family-Office Co-Op.”)

Art Funds Take a Dive

There’s a shake-out under way among art funds, vehicles that invest in art and have hedge fund-like structures, high fees, and long-term lock-ups. Through the end of June, there were an estimated 72 art funds globally, with 55 in China and the rest in Europe and the U.S. That’s down considerably from the peak of 115 funds recorded in 2012, 90 of which were in China.

Assets under management also have declined, by some 40% since 2012, to an estimated $1.3 billion, according to a recently released report by London-based ArtTactic, a market research firm, and Deloitte Luxembourg. “There is mixed confidence. There is a positive trend for art and wealth management, and a negative trend for art as an investment,” says Adriano Picinati di Torcello, Deloitte Luxembourg’s advisory and consulting director.

That’s probably because the unregulated art market and strong demand for art funds has attracted some scoundrels. Earlier this year, the Autorité des Marchés Financiers, France’s SEC equivalent, announced that it would bolster its scrutiny of nontraditional asset funds. The AMF said it would verify “a posteriori” that all risks attached to these investments are outlined.

The authority’s move came after an entity known as Marble Art Invest promised hundreds of investors a 16% per annum return on the resale of artworks, which, the French regulators noted, was “unrealistic in light of current interest rates.” The AMF fined the founder of the art fund one million euros ($1.3 million).

The U.K. has imposed similar regulations on marketing materials of “unregulated collective investment schemes.” Closer scrutiny in China revealed that 80% of the Middle Kingdom’s art funds were apparently finance vehicles for other investments; some leveraged artworks to fund real-estate deals. China’s Ministry of Finance and others are currently working on a new regulatory framework for the rapidly growing Chinese art market. U.S. regulators have been quiet because the U.S. art fund scene has been quiet, too

A Pension Plan For Artists

The word “artist” almost paints a picture of itself: life in poverty with little room for retirement. The Artist Pension Trust (APT), based in New York City, intends to change all that. The APT is a kind of art collecting mutual fund, and it’s attempting to provide artists with financial stability in old age, while, at the same time, handsomely profiting from building the world’s largest contemporary art collection.

The artists picked to participate in the scheme deposit in the trust 20 artworks over 20 years. APT holds these works until it seems smart to sell. When a work is sold, 40% goes back to the individual artist; 32% is distributed evenly among all the artists participating in that specific trust’s pool; and the remaining 28% goes to APT.

The firm has, since its founding in 2004, set up eight regional trusts with 250 artists each, in cities like New York, Los Angeles and London. It is now sitting on 12,000 works from artists in 75 countries. The art pieces on deposit are estimated to be worth $150 million, but if all the works committed to the trust at future dates are also taken into consideration, the collection is theoretically worth around $700 million. The fund will, says Moti Shniberg, APT’s co-founder and CEO , break the billion-dollar mark late next year.

New Help For Addicted Kids

It’s a pleasant ride through Bethlehem, Connecticut, where the roads are lined with pumpkin patches and dairy farms, on the way to treatment center Newport Academy. It’s so easy to forget the solemnity with which most families make the trek.

Newport Academy treats teenagers struggling with serious mental health, substance and alcohol abuse issues. The academy was founded in California, in May of 2009, by ambitious 33-year old Jamison Monroe, who comes from a wealthy Texas family and has struggled with his own substance abuse issues. Patients quickly filled the beds in Orange, California, flocking to Newport Academy from all over the U.S. To meet East Coast demand, Monroe opened his Connecticut facility last year.

Not every kid does well in the scare-‘em-straight wards of grim hospitals. Monroe wanted to create a beautiful and safe 12-bed residential facility to treat male and female young adults, ages 12 to 20 years old, separated by gender. Patients follow a regimented program with 20 hours of counseling, which includes group, individual and family sessions, coupled with 12 hours of therapeutic activities including yoga, art, music, and equine-assisted therapies. Patients also complete three hours of schooling in Newport Academy’s classroom five days per week, overseen by a teacher. In this way, treatment doesn’t adversely affect their school lives when they ultimately move on.

How Stable is Your Rothko?

If you’re about to purchase a major art work, there is one more bit of due diligence you will want to perform before you pay your bill: Check out the stability of the materials the artist used in the work. It’s a key bit of information you need to have before making a major purchase.

Consider what happened to Harvard University. In 1962, five Mark Rothko panels were commissioned by the university and hung in Harvard’s Holyoke Center. The murals were removed in the late 1970s and put into dark storage, after years of damaging exposure in the light-filled Holyoke Center. The materials Rothko commonly used to paint his remarkable color studies are unstable. The paint is made from animal glue and dried pigment, and if the paintings are exposed to high levels of light, they can fade within a decade.  It is for such reasons the Getty Trust is studying and testing the acrylic paints used by many modern painters, so that future conservators can properly restore late 20^th century masterpieces.

“A great deal of art being sold today may deteriorate quickly and cause the monetary value to decline – precipitously in some cases,” says Emily MacDonald-Korth, founder of the conservation practice Longevity Art Preservation LLC and formerly an Associate Project Specialist at the Getty Conservation Institute.