This might be a strange thing for me to say, as someone to whom collecting is a core part of their identity, but I try not to have attachment to works that I own with the hope that objects can live multiple lives. Perhaps this is rooted in my training as an archaeologist, which has caused me to see the objecthood of any given artifact as separate from its erstwhile owners. This transience is something I appreciate—I’m grateful that I get to live alongside the pieces that make it into my collection, and it feels exciting to me that, hopefully, their existence on the historical record will exceed my own.
I think about this a lot in the context of the so-called Great Wealth Transfer, which has been all the buzz in market reports. In August, ARTnews pointed out that, according to the Deloitte Private and ArtTactic Art & Finance Report, close to $1 trillion worth of art could transfer in the next decade. The wealth of art accumulated by members of the Silent Generation and Baby Boomers will move into the hands of their Gen X, Millennial, and Zoomer progeny, and considering how shifts in taste have accelerated across generations, it’s a point of immense curiosity what an estate boom will do to the secondary art market. It certainly is for me.
Enter David Schrader, former Head of Private Sales at Sotheby’s and now a co-founder, along with art dealer Emmanuel Di Donna and Pace Gallery, of Pace Di Donna Schrader Galleries, a gallery dedicated to the sale of secondary market artworks. (The 7,000-square-foot gallery will open its first exhibition next spring in Di Donna’s former space on the Upper East Side.) Having moved from the world of auction houses into the gallery world, Schrader occupies a distinct perch from which to consider the consequences of this transfer of wealth and other questions about the future of the big-money market.
In our conversation, Schrader discussed the logic behind the new gallery, which elements of the art business need a rethink, and why he’s not so convinced by the Great Wealth Transfer headlines. As the market becomes more diffuse and financially scrutinized, he argues that research, education, and connoisseurship—not simply access to capital—will, or, at the very least, should, determine how the next generation builds its collections.
May that, indeed, be true.
Before we get into talking about the Generational Wealth Transfer, I’d love to hear about your journey with Pace Di Donna Schrader Galleries so far—also about your leaving Sotheby’s and moving to this new model. What was your mindset in moving to a gallery from an auction hour?
It was sort of interesting to start in a moment when everyone’s closing and shrinking and shuttering. As a purely secondary market gallery, there’s like five dealers or six dealers in the world who do the same thing at a similar scale—it’s a pretty big market that had bottomed.
We’ve arrived in a world where there’s less expertise and the competition keeps decreasing, and I thought it was a really interesting moment to come in with a different cost structure, and the notion that we don’t need 10 galleries or 12 galleries. We can mount several shows a year, deal purely in the secondary market, and advise on collections. And again, there’s not that many people doing it. So it sort of felt like the right moment.
What’s interesting is that people aren’t doing it at such a public level. I know a ton of secondary market art dealers, but they’re kind of one-man or smaller operations. This is not the approach you’ve taken. Why?
There’s been a lot of conversation around consolidation. If you have three galleries in the same city, you need three sets of front desk people and three sets of art handlers, and three sets of registrars, versus just having one. So is that a better model for the future when people aren’t in New York anymore from January to March, or not at all? Perhaps, I’m being facetious, but the question really is: How do you accommodate these changes?
Between Marc [Glimcher], Emmanuel [Di Donna] and me, we don’t really have that much overlap in expertise. And we oddly don’t have that much overlap and clients. So it kind of made sense.
You’re doing this at a time when a big conversation in the art world is about the great wealth transfer. We hear that it’s going to bring a ton of high value art to the market but it might not change the audience that’s buying it. How do you think about the change in clientele at the market’s top level, as the transfer is happening?
I’m not sure anything’s really changed yet. The upper end of the market are the same people that were there for the last 20 years, and I think we’re just starting to see new people enter. There’s the nuance of how wealth creation works right now, which is that it predominantly happens in the tech sector. We’re really observing a once-in-a-generation surge of wealth creation, and are starting to enter, what feels like to me, a K-shaped economy. We’re seeing it in real estate, watches, and any other commercially available thing in the luxury sector, and evidence shows that art is an under-performer here. It poses a couple questions: What art is relevant? What will new people care about? Do you care what your parents cared about? How is that taste going to affect who wants what and what they value?
Speaking of new clients, of your last, like, let’s say like 20 deals, what proportion do you think came from collectors that weren’t active in the art market a decade ago?
Ten percent. Maybe 20 percent. I don’t think we’ve seen the big new transfer come in quite yet.
Generally, wealth is transferred to the spouse first. So the movement of wealth is more horizontal than we tend to think. And in the case of collectors—and any sexism here is a matter of historical fact, unfortunately—it tends to be men transferring their collections to their wives. Is this something you’ve observed in your career? An increase in women collecting at higher prices?
Yes, and I think you are seeing women change the direction of the collection. There’s sort of a selling and rebegging—that might be an age gap thing, or just might be taste. But I think you’ve also seen the rise of serious women collectors over the last 10 years, one that could not have happened 30 years before.
I’m curious to hear—and this is what I talk about a lot with my younger clients—how the rising generation of collectors is thinking about creating value from their collection. Are they comfortable with art loans, guarantees? Do you find that that’s kind of an older model that people are not tapping into as much?
I’m actually not seeing newer collectors use leverage in the same way as older collectors, although I really never felt that that generation was using leverage to buy more art. I think it was just leverage as an asset, whether it be a house, a car, a plane, a painting, it was sort of fungible and not really being put back in the system.
For this next generation of collectors, the wealth is massive—some of these people don’t need to leverage as much, or they’re buying art to have fun.
I think one of the questions is like, how do we make it fun again [for the older buyers]? And you know, when you started growing up around art, and when I started collecting, you wanted to go to the dinners and the openings and you wanted them to see what was new. Maybe it’s the proliferation of information or the way it’s disseminated, that has made things a lot more diffuse.
Yes! And also, collecting brought interesting people together. You knew when you went to a Gagosian dinner that you were going to be surrounded by people who were movers and shakers. This has shifted a little bit because of the tech base—that’s who the movers and shakers are now. The head honchos, so to say, are not the ones showing up to art events… I wonder, how do we make it interesting for young people to want to be a part of that world?
My sense is that the new collectors coming in, while they don’t want to lose a bunch of money, are less focused on art as an asset, which I think is healthy. One of the issues we’ve had—really what brought us here—is the financialization of the art market. And, you know, for true collectors, it was never really about how much money you were making in a painting; it was having the ability to live with an object and pass it to the next generation.
It’s interesting to see how people are changing and mixing their collections. You know, say, Jonas Wood with more classical art as well as design. I look at the design market as a pretty interesting example—it has kind of replaced primary market art for a lot of people.
What do you see as the biggest opportunity in the art market right now for collectors?
I’m generally the most excited that I’ve been in a long time. I think the opportunity is gonna be in the widening out of the funnel in which the world is super concentrated on 10 or 15 artists, which I don’t think will change structurally, but as the prices and availability shift, perhaps it’s time to make a move towards your favorite artist that has maybe fallen out of favor. There are a lot of very classical artists who aren’t making any more work, that are in every museum, that have markets that are down 50 percent. That’s where I’m most focused myself.
And what do you see as the biggest opportunity for art sellers?
I think we’re entering into a moment where sellers should have more confidence than they’ve had in the last seven or eight years, as evidenced by people’s lack of desire for guarantees at auction. For us, it’s quite difficult to get material. We’re not really seeing people who need money—the works that come through our doors usually do so because of a desire for an upgrade, replacement, generational transfer, or other opportunities.
Or decorating your house.
Or decorating your house, which I think has been a lot of the market for the last handful of years.
Financially speaking, do you think we need to scale back on anything in the art market right now—be it endless art fairs or printed catalogues?
Look, everyone is, for the first time, looking at these as businesses. The costs are real, whether it’s printed catalogs at an auction house or dinners, travel, insurance, shipping. These costs were never the focus, because [the businesses] have never been run by financially minded people. What’s more likely is that we’ll see infrastructure consolidation in the back end of galleries. With the art fairs… look, I’ve only done two and it’s new for me to be someone standing in a booth for someone walking through the fair.
You haven’t had full fatigue yet. You’re not there yet.
I think it’s pretty fun. The art fairs serve a purpose, and I wonder if they’re not just more regionalized than they were before.
What do you think the people in the industry are not spending enough money on?
Research. At the end of the day, to me, the thing that’s missing the most from the market today is research and expertise. We need to teach new collectors about artists and get them excited to have this context. I think we’ve seen a real brain drain out of auction houses and galleries.
What names are you hearing people really want to get their hands on this season?
I would say it’s not a changed list from what it’s been, but I think within the artists that we deal with, it’s Picasso, Warhol, Basquiat, Magritte, Dalí, Calder, and Mitchell. I’ve seen a little pick up in Fontana.
The heavy hitters, basically.
Yeah, and I think with Emmanuel [Di Donna]’s expertise in Surrealism, that’s been a pretty good section of the market. So I would say I’m feeling more exposed to some of those second-tier Surrealists.
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