Art collectors as venture capitalists

Amy Whitaker and Roman Kräussl

No 696, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: Employing the art-collection records of Burton and Emily Hall Tremaine, we consider whether early-stage art investors can be understood as venture capitalists. Because the Tremaines bought artists' work very close to an artwork's creation, with 69% of works in our study purchased within one year of the year when they were made, their collecting practice can best be framed as venture-capital investment in art. The Tremaines also illustrate art collecting as social-impact investment, owing to their combined strategy of art sales and museum donations for which the collectors received a tax credit under US rules. Because the Tremaines' museum donations took place at a time that U.S. marginal tax rates from 70% to 91%, the near "donation parity" with markets, creating a parallel to ESG investment in the management of multiple forms of value.

Keywords: Art investment; venture capital; social impact; portfolio management; tax arbitrage (search for similar items in EconPapers)
JEL-codes: D31 G11 L31 Z11 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cul
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:696

DOI: 10.2139/ssrn.4316020

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