Helen Brown Group

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There’s No Business Like Show Business

This week we welcome HBG Senior Researcher and LA resident Mandi Matz to the blog to talk about all things Hollywood – and in particular, movie magic and money. Mandi provides us with some great resources for finding compensation and deeper financial information on everyone involved in bringing entertainment to our screens, large and small. ~Helen

        Mandi Matz

I’ve lived in Los Angeles for more than 15 years. While I’m not originally from LA, I think of it as my adopted home now. When I meet people from other states and mention where I live, I inevitably get asked two questions:

  1. Do I go to the beach every day?
  2. Do I see movie stars all the time?

The answer to both questions is “no,” but I did recently see a Hollywood A-lister at my local coffee shop.

In addition to honing my celebrity-spotting skills after all these years, I’ve spent a lot of time researching prospects in the entertainment industry, which can be a fun but challenging task. While a quick Google search can lead to an abundance of information about the latest deals for top stars, figuring out how much other people in the entertainment business earn can be tricky. While this is by no means a comprehensive list, here are some resources I’ve found to be valuable that may help you too. And while you still may not be able to calculate someone’s exact compensation, these suggestions may help you make an educated estimate with confidence.

The Guilds

A good place to start when researching a writer, director or actor is the guilds to which they likely belong. The Directors Guild of America (DGA), the Writer’s Guild of America (WGA) and SAG AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists, otherwise known as the actors’ union) all make their contracts and rates available online:

  • DGA rate cards outline the minimum salary schedules for directors, unit production managers, assistant and associate directors and stage managers. Rate cards for 2018-2019 through 2021-2022 are available here.
  • The WGA’s basic agreements from 2011, 2014, 2017 and 2020, as well as its Schedule of Minimums for 2014, 2017 and 2020 are also available. These schedules list the minimum amounts paid to screenwriters, and each type of writing job has a set price. Rates are tiered depending on the budgets of the project, type of TV show (cable vs network), etc. The WGA also makes available extensive information about residuals. The Residuals Survival Guide, in particular, offers a good basic definition of residuals and how they are calculated for various projects.
  • SAG AFTRA’s rates are available for actors of all types, including commercial, television, theatrical and voiceover. From the Contracts & Industry Resources section of its website, you can find the specific type of project and navigate to the individual rate cards.

While directors, writers and actors are typically the most recognizable names associated with a movie or television or streaming show, they are just a few of the hundreds of people who help make the entertainment we all enjoy. Many of these behind-the-scenes folks belong to United Scenic Artists, which makes its 2018-2021 film and TV – as well as theatre, opera and dance — contracts available online.  If you are looking for information about an art director, scenic or costume designer or someone who works in the art department, take a look here.

If you are researching a prospect whose job isn’t covered by one of these guilds, a little creative thinking and searching may lead you to another union of which they are a member and there’s a good chance that union’s current contract and rates are available online. Be warned though: it’s easy to go down the rabbit hole when looking at these contracts and rate cards, so keep that in mind before you start looking through them.

The Media of Record

Los Angeles is very much a company town, and there are many sources that specifically cover the business of the entertainment business. A news search through Deadline, The Hollywood Reporter, the Los Angeles Times and/or Variety may help answer some of your questions about what a prospect potentially earns. While each of these sources offers some content on their websites for free, you’ll often find that you hit a paywall quickly.  Luckily, all of them are available through LexisNexis for Development Professionals, if your shop subscribes to that resource. Lexis has content from Deadline dating back to 2016, while content from The Hollywood Reporter and Variety is available dating back to 1991 and 1993, respectively. Content from the Los Angeles Times dates back to 1985, and the Los Angeles Times Online (content from the paper’s website edition) is available since October 2020. All of these sources are updated within Lexis on a daily basis.

By the way: In 2017, The Hollywood Reporter published a salary survey covering folks at all levels of the entertainment industry, including top stars, studio heads, show runners, key grips, boom operators and make-up artists. Although this data is now a few years old, it can be a good reference point – and you may be able to cross check the information it provides with more recent news sources. What I like about this resource is that it’s straightforward and easy to use, dividing each occupation into top-, middle- and bottom-dollar.

A Few Other Ideas

I’ll apologize in advance because I’m going to show my West Coast bias with these next two recommendations. For the last few years, I’ve enjoyed listening to The Frame, a daily podcast chronicling film, TV, music, arts and entertainment and produced by Southern California Public Radio (SCPR). (Full disclosure: I’m a member of SCPR, my local public radio station). The Frame went on hiatus during the pandemic, but I hope it will come back soon. The host, John Horn, is a former Los Angeles Times staff writer who covered entertainment for more than a decade and his guests are often journalists who cover Hollywood – from both the business and the creative side. All episodes – dating back to the show’s first airing in August 2014 – are searchable and free on SCPR’s website.

Speaking of public radio, if you’re a fan, you may already listen to the business program Marketplace, which is based in Los Angeles and produced by American Public Media. While the program covers business in general, entertainment is also often on the docket. One feature I always enjoy is its occasional “Corner Office” segment. In the past, these conversations have included figures from the entertainment world including the CEOs of the Tribeca Film Festival, the chief content officer of The Walking Dead franchise and the creators of The Marvelous Mrs. Maisel. I find these conversations enlightening for what they reveal about how top executives think, how they make decisions, and how those decisions affect us as consumers.

Both The Frame and Marketplace are available from all the major podcast providers. The “Corner Office” segment is searchable and can be listened to on the Marketplace website.

And Just for Fun (But Still Relevant)

Fans of the Turner Classic Movies network may already know about its The Plot Thickens podcast, which began its second season – “The Devil’s Candy” — in July. I’ve enjoyed listening to it as both a movie lover and as someone who has a professional interest in trying to understand the business of Hollywood. For the latter, it provides interesting context. Season 2 of the podcast focuses on the making of the movie adaptation of Tom Wolfe’s The Bonfire of the Vanities and how one of the biggest books of its time turned into a box-office disaster. After listening to this season’s first few episodes (the final episode will be available August 10th), my biggest takeaway is what an incredibly complicated process it is to get a movie made. It’s a minor miracle anything makes it to our big or small screens.  Something for you to keep in mind the next time that director or actor’s salary seems outrageous or the next time you visit your local theater or binge watch something from your Netflix queue.

I hope these suggestions are helpful to you if and when you have to navigate the business of show business.  And if we ever meet in person…do ask me about that A-lister. I’ll be happy to tell you who he was – just as soon as I get back from the beach!

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Real estate and the wealthy right now

When the pandemic struck last year, (those who could) moved into their summer homes or took long rentals outside of whatever city they lived in. Since that time, there has been a reshuffling of thinking about what it means to be employed full-time and if employers will maintain offices, move to a hybrid office/work from home (WFH) situation, or just close their offices permanently.

That means that in vacation areas especially the real estate market is booming. Houses are selling within hours, some sight-unseen, for cash – and well above asking price. It’s a good time to be a real estate agent, especially if you like working 20/7. It’s also a great time to be a seller (as long as you have somewhere else to live lined up). It’s not great to be someone who is looking for a primary – or first-rung-on-the-ladder home.

Pension and private equity firms are changing the market

Institutional money pockets are as deep as the Mariana Trench right now, and those investors have to diversify their portfolios. Real estate is a great way for them to do that. What that means is that they are becoming some of the largest real estate owners in the country and are driving up prices up so that the average home seeker is getting shut out of the process.

With medium-sized investors refurbishing medium-sized homes to flip to institutional investors, it means that monthly rental fees are going up, too, for those homes that are left.

According to real estate research and investment firm John Burns Real Estate Consulting, one in five homes in the US is owned by someone who will never live in it. In Houston, investors currently account for nearly a quarter of all recent home sales. Investors aren’t just buying houses and apartment buildings, either – they’re buying whole neighborhoods.

UHNWIs

Moving down the food chain ever so slightly, what about ultra-high net worth individuals (UHNWIs) – those with a mere $30 million and more? What does real estate look like for them? How did the pandemic change their attitudes toward where they want to live?

Respected real estate firm Knight Frank publishes their Wealth Report annually, and this year’s version had fascinating insights. Just over a quarter of UHNWIs expect to buy a new primary residence this year in a coastal or rural location. Their primary goal is to have access to open spaces near their main dwelling, and their plan is to have this upgraded residence also serve as their office (or be very close to their work-place).

90% of those surveyed said that international travel would be significantly curtailed due to ongoing concerns about COVID-19, so that makes the home-as-getaway even more important.

In terms of holdings, primary and secondary homes make up about a quarter of UHNWIs investment portfolios. Their interest in investing in commercial property is way down (imagine that!) but – just like pension and private equity firms – their interest is way up for owning rental properties.

So what does this mean for prospect research and fundraising?

Well, a lot. This real estate financing situation is a whole separate world that is important for those of us in fundraising to read about to understand what’s going on with money moving around. Here are 3 specific things to consider:

  • Your nonprofit’s UHNW donors may be on the move, so keeping in touch will be even more important this year.
  • While it’s true that a donor will never* give an organization their residence(s), real estate can be an important indicator of wealth. Use the ratios and percentages in reports like the Knight Frank Wealth Report and the Capgemini World Wealth Report to help you get a sense of your prospect’s capacity when you are creating ratings.
  • This is a real estate bubble. Bubbles always burst, and we won’t know the size of it until it happens. Historically, people and institutions that are heavily invested in certain types of real estate (commercial real estate, for example) may struggle if they put too many eggs in that basket. If the top of your donor pyramid has a lot of people in this category, now would be a good time to make some asks and to think about diversifying your prospect portfolios soon.

What else? If you share this on your social channels, I’d be interested to hear your thoughts about this. I’m at @AskHelenBrown on Twitter.

*this is not actually a true statement. See planned giving.

 

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Can your prospects be found at a luxury private community?

To start off the new year on The Intelligent Edge, we hear from my colleague Heather Hoke who shares her knowledge on luxury private communities – their costs and amenities. If you have prospects and donors living in a private community, check out the resources Heather references below. ~Helen

It’s been a rocky start to 2021 and it wasn’t too long ago that I was saying how excited I was to leave 2020 behind and start a new year! Given everything, it’s not surprising that so many of us are ready for a change in geography, including the wealthy.

Many people are migrating from densely populated urban areas, to a place they can have peace-of-mind and feel a sense of security. Private residential club communities may be attractive to buyers now in the time of COVID-19. Stay-at-home mandates and social isolation may factor into an increased interest in resort lifestyle communities that are full of amenities.

You can be in any stage of life to live in a private community, but some are targeted specifically for families, retirement, or active adults over 55. Communities offer a variety of exclusive concierge services and amenities including an array of fitness and recreational activities, dining, social activities and even security and medical staff. It comes at a significant cost as the properties require an initiation fee and annual dues. Buyers are not only buying a home, but they are also buying a lifestyle.

Let’s explore some of the most exclusive private residential communities….

Bighorn Golf Club in Palm Desert, CA

www.bighorngolf.com

Bighorn is described as casual and comfortable. There are 470 residences and 520 club members. The $100K initiation fee for club membership includes two championship golf courses, social activities, dining venues, tennis and pickle ball, pools, a fitness center, a salon and spa, personal training, and nutritional counseling. There is also private jet and transportation services, and an ultraluxe auto gallery to house members beloved cars. A golf membership is an additional $250K. Current homes for sale are going for up to $9.6 million.

The Hideaway in La Quinta, CA

www.hideawaygolfclub.com

The real estate on the 600 acres includes 447 homes, ranging from designer-built bungalows and villas to custom-built homes of up to 10,000 square feet. Current real estate listings go up to $4.5 million. There is a $75K fee to join The Hideaway Golf and Country Club which is limited to 580 members. Along with two renowned 18-hole golf courses and a 51,000-square-foot clubhouse, recreational facilities feature a world-class spa, fitness center, pool, and sports courts.

Kohanaiki in Kailua-Kona, HI

https://kohanaiki.com

Kohanaiki features a Rees Jones-designed oceanfront golf course, a sports complex, and an Adventure Team that serve as personal guides to the island’s natural attractions of surfing, stand-up paddling, snorkeling, and diving and deep-sea fishing on Kohanaiki’s 39-foot boat. The 67,000-square-foot clubhouse is a place of relaxation and wellness that includes a spa, infinity pools, yoga lawns, relaxation areas and sweeping views of the ocean. It also has a bowling alley, movie theater, private dining rooms, a wine and cheese tasting room, cigar room, and poker room. There is even a master brewer crafting one-of-a-kind beers onsite. Current real estate listings go up to $12.5 million.

Kukui’ula in Koloa, HI

https://kukuiula.com

The 1,010-acre property designed for families offers outdoor adventure experiences, a 10-acre organic farm, hiking trails, spa, and an 18-hole golf course-dubbed one of the best courses in Hawaii by Golf Digest. On staff is a “cultural resource liaison” who oversees programming that delves into island culture, including lei making, hula dancing classes and sunset ritual ceremonies. Kukui’ula offers a range of home ownership opportunities from large home sites to villas and bungalows. Homes range from $600K to $12 million. 

The Madison Club in La Quinta, CA

https://madisonclubca.com

The Madison Club is a community with quiet neighborhoods of luxury estate residences, elegant villas and clubhouse suites. It offers a Tom Fazio-designed golf course, movie theater, game room, full-service spa, a fitness facility, on-site medical practitioner, and a “recreational and lifestyle wellness team.” Initiation fee is $200K plus $33K in dues. 

Ocean Reef Club in Key Largo, FL

www.oceanreef.com

This community is on a private peninsula and has its own 4,000-foot airstrip, school, museum, security force, and fire department. A marina with 175 slips and docks for yachts up to 175 feet are also offered. To live in Ocean Reef, a resident must be sponsored by two current members and purchase a membership for $200K.

Royal Palm Yacht and Country Club in Boca Raton, FL

www.rpycc.org

This 450-acre community has 700 estates, many on deep-water and golf course lots. Royal Palm is internationally acclaimed as one of the most exclusive yachting communities in the country. Notable features include a Jack Nicklaus Signature golf course and full-service marina. Membership is by invitation and the candidate selection process is overseen by the members. Current real estate listings go up to nearly $17 million.

Silo Ridge Field Club in Amenia, NY

https://siloridge.com

On 800 acres, Silo Ridge opened in 2018 and is a project of Discovery Land Company, a developer and operator of some of the world’s most exclusive residential club communities. Silo Ridge has $250 million worth of amenities, including a Tom Fazio-designed golf course with gourmet snack stations, an organic garden, farm-to-table dining, hunting, fishing, hiking, mountain biking, an equestrian center, a spa, an outdoor theater, and a pool with a 150-foot water slide. About a 90-minute drive from Manhattan, Silo Ridge is especially appealing to NYC residents. There are 245 predesigned houses priced at an average of $5 million and going up to more than $10 million. Members pay annual dues of $24K and an initiation fee of $100K. Silo Ridge has vertical membership where members’ children and parents also become members.

The Summit Club in Las Vegas, NV

https://summitclubnv.com

This ultra-luxury resort community on 555-acres had its first residents in 2018 and has contracted 154 of its 260 lots, pre-built residences, and clubhouse suites. There is a clubhouse for dining and events, a pickleball facility, sports and tennis courts, and a championship golf course designed by golf architect Tom Fazio. It also has mountain biking and hiking nearby in Red Rock Canyon National Conservation Area, a kid’s club, and residential services in which staff will do everything from grocery shopping to a turn-down service and housekeeping. Some of the homes built were more than $20 million. The average custom lot sells for more than $3.5 million. Club membership is $200K, annual dues are $39K and homeowner’s association fees are $16.8K.

Yellowstone Club in Big Sky, MT

https://yellowstoneclub.com

Yellowstone Club is the world’s only private ski and golf community. Designed by Discovery Land Company, it is situated in the Rocky Mountains spanning 15,200 acres with 2,900 acres of ski trails and an 18-hole golf course. There is a 282-acre ranch under contract there for $18 million and custom homes ranging from $11 million to $29 million. The grounds are reportedly protected by a security team that is led by a former Secret Service officer and it has its own fire department and emergency medical services team. The Club is limited to 864 members. Initial membership fees are $400K, and there is an annual fee of $41.5K.

 

These properties seem to have everything you will ever need to ease even the most stressed mind and body!

You can do some prospecting around private communities too. A helpful resource is the Private Communities Registry (www.privatecommunities.com) which is searchable by state for various community-types including gated, golf, luxury, and equestrian communities. Perhaps some of your constituents already live there!

In 2021, I am looking for wellness, peace of mind, and to be outside in nature as much as possible. Now I need to figure out a way to move to Kohanaiki! Since there is a master brewer on staff there, I have buy-in from my husband!

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December edition – Who’s Doing Well Now?

It’s been eight months since I did a blog post on the topic of “Who’s Doing Well Now” and I thought the end of the year – giving season – might be a good time to revisit that question.

If you read that original blog post and the follow-up white paper, many of the industries from that period remain at the top, but over the summer innovation (and pivotation) pushed a few other companies and industries into the spotlight. I wanted to share my resources to help you dig a little deeper to find prospects that might be flying under the radar a bit.

For example, it’s not a secret that puzzles and games are doing well, so of course we should look into who makes them. Manufacturers like privately-held (and very diversified) Allied Materials and Equipment Co. of Kansas City, MO, whose subsidiary Allied Products is the maker of Springbok puzzles, are doing well this year. According to their website, Allied also makes American flags that fly “over some of our nation’s most important institutions as a result of contracts with the United States Senate, Department of Defense, and GSA recipients.” Those flags are also used for military (and veteran) keepsakes and burials, which unfortunately have seen an uptick this year. Allied’s DOD contracts also extend to military equipment, such as chem/bio life support systems.

Want to find more suppliers with US government contracts? There’s a database for that: https://www.usaspending.gov/. You don’t have to know the name of the company, either. If you’re prospecting, the surprisingly well-built search tool allows for a large array of filters, including recipient (awardee) type, NAICS code, state, zip code, and congressional district.

Specifically interested in companies that have received contracts for COVID-related purposes? You can find that on the USASpending site, but ProPublica has also created a very search-friendly tool at https://projects.propublica.org/coronavirus-contracts/ for finding companies that have recently increased sales due to government contracts.

In the Washington, DC area, it would be natural to think that the fastest growing company would be a government contractor. Holistic Industries, which has grown 447% over the past three years and is considered an essential business will probably not be a DOD contractor anytime soon, though. The cannabis retailer reported growth over 30% for the first quarter this year and beat estimates for Q3 by $3 million. CEO and University of Maryland alumnus Josh Genderson has hopes to double sales next year. Cannabis retailers can’t use traditional banks to park their money, and they frequently donate to local nonprofits to prove their place in building up community. If your nonprofit doesn’t include cannabis retailers in your due diligence ‘no-no’ list, you may want to check out your local retailer’s leadership.

With the disruptions in the supply chains over the past several months, grocery retailers have needed to utilize more cold storage facilities to keep things fresh and relatively close-by. Two companies control nearly 60 percent of all of the cold storage in the US – Lineage Logistics and Americold Realty and both are growing quickly, according to The Wall Street Journal. The CEOs of both companies are graduates of Midwest universities that mention nonprofit interests on their LinkedIn pages.

I found the three specific company examples mentioned above by searching for “companies doing well” and limiting my search dates, but there are other resources (stronger than a search engine) that you can use to prospect for successful industries and companies (and the people who are doing well because of them) right now.

One of my all-time favorites is an expensive resource that used to be found only in hard copy in business libraries: ValueLine. Imagine my delight when I learned earlier this year that not only is ValueLine online and searchable, but my library card to my little local library gives me free access to it. (Maybe yours does, too?) ValueLine gathers information about 6,000 publicly-held companies and 18,000 mutual funds (as well as other invest-ables) and provides insights on which companies and industries are “timely” (how they’re doing as compared to others in their industry) and “safe” (the likelihood that the company will continue to do well over the coming months – or not) at the current moment.

My search in ValueLine this week showed that 26 companies are at the Venn diagram nexus for both growth and safety. The list includes several you’d expect like Clorox, Costco, General Mills, Home Depot, JM Smucker, Procter & Gamble and Walmart, with a few interesting ones like Jack Henry & Associates (payment processors for the financial services industry); Landstar (shipping and logistics); and Synopsys, an electronic design automation company focusing on silicon design, verification, and intellectual property and software security and quality.

Another resource to check for companies doing well right now is the Fortune Global Fastest 100, a listing of the fastest-growing companies in the world. I like to break their list down into industries to get an overview of sectors that are growing quickly in order to spot trends and outliers. This year the top three categories for growth are commercial banks; homebuilders, engineering, construction, and building materials; and internet services and retailing.

One last resource I wanted to mention is LinkedIn. Since it was first published on March 31, senior editor Andrew Seaman’s article, “Here’s Who’s Hiring Right Now” has been regularly updated. Its long list of companies that are doing well enough to be hiring this year is worth a look for prospecting ideas.

What places are you looking when you’re prospecting these days?

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What on Earth is a SPAC?

A few weeks ago I was doom-scrolling Twitter and saw a link to yet-another article about SPACs and thought, “I really need to know more about these things.” My colleague, Kenny, has been casually dropping the term in our team meetings for a while, while talking about research he’s been doing, and I realized it was about time I stopped faking that I knew what he was talking about.

So I did a search and got lots of articles about Space-X, because “SPAC” and Twitter’s sub-par search engine don’t mesh. Sigh.

My bad…

If you’re looking for a lost shoe, chances are good it’s not in the refrigerator.

So I stopped being lazy and did the smart-researcher thing, which was to go directly to Investopedia. I knew it would have the answer, and who has time to waste? (Well, me apparently, because I fell through the prospect research rabbit hole and spent another two hours learning about SPACs!)

There are lots more resources I’m going to link you to at the end of this article that explain things fairly clearly including a fascinating, detailed, inside-baseball explainer from Bill Gurley, a venture capital deal-maker in Silicon Valley.

But first, I’m going to share the basics.

A SPAC is a Special Purpose Acquisition Company. Anybody can start a SPAC. You can start a SPAC. You don’t need a special license or anything. You just need to be able to raise money. (Hmmmmm)

A SPAC is a publicly-held shell company formed by an investor or group of investors, also known as sponsors. These sponsors usually have knowledge or expertise in a certain industry sector.

The ultimate purpose of a SPAC is to merge that shell with a promising privately-held company in order to take that company public without the hassle or cost of the traditional IPO process.

The sponsors will do a roadshow to institutional investors like family offices and private equity firms to drum up interest in investing in this shell company. You might see a SPAC referred to as a “blank check” company, because investors are essentially putting money toward something that doesn’t exist yet.

The sponsors might (or might not yet) have a few companies in mind that they will approach for a merger, and they’re not supposed to tell the investors even if they know – at this stage anyway (more on that in a minute).

Anyone can invest in a SPAC, too, including you and me. Shares traditionally open at $10 each.

Once there’s enough money in the pot, it goes into a blind trust. The SPAC has 24 months in which to acquire/merge with the target company. If they aren’t able to do that within 24 months, all of the money gets returned to the investors.

Now, once the SPAC sponsors have decided on a company to merge with, they can go back to the institutional investors and tell them (in confidence) about it, and ask if they want to put in more money. This is what is called a PIPE deal – a “private investment in public equities.” It sounds a little sketchy, but institutional investors are not allowed to share this insider information, and they’re not allowed to trade their shares for four months after the merger. Retail investors – you and me – can sell or buy anytime.

Who’s making money, how, and how much?

So let’s say the SPAC merges with a privately-held company. What happens then? Who makes money? How do they make money?

Let’s start with the sponsors. They make money in fees: 2% of the SPAC’s value plus $2 million for administration. Plus any profit off of the sale of shares or increase on money they put in.

The owners of the privately-held company make money when their shares increase in price and/or they sell them. In addition, they save money because the IPO process is expensive, with lawyers and investment banks and lots of other people to pay. By merging with a SPAC, they’ve avoided all of that payout.

The institutional investors make money when their shares of stock increase in price. In addition, when they originally invested they were likely also given a warrant to buy future shares of stock at a discounted price at/after a particular date. Assuming that the share price has gone up, that can make for a tidy profit.

So that’s the overview of SPACs. Don’t miss these articles and resources that fill in more of the gaps:

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The Wealthy and their Art

Want to know more about high net worth individuals and the art they hold? This week we welcome my colleague Kristina Gropper to the blog to share her insights into some fascinating reports out that cover the wealthy (including Millennials and Gen-Xers) and their collections. Kristina has also researched and shared a great resource list at the end of her article if you need to do further prospect research on art-owning constituents. Once you’re finished, visit the HBG Prospect Research Links pages where they’re all bookmarked for you! ~Helen

Kristina GropperAfter graduating from college, I moved to New York City with two suitcases and a dream to work in the arts. One of my first jobs was as a legal assistant at the Metropolitan Museum of Art, which celebrates its 150th anniversary this year. Working at the museum was a great steppingstone, and one of the perks was getting lost in the museums labyrinthine basement or finding an alternative route to the administrative offices in another wing. I experienced similar joy and delight while immersing myself in a few recently published reports that cover art and wealth. This post summarizes key takeaways that may help in researching donors and prospects for your organization.

An Art Basel & UBS Report: The Impact of COVID-19 on the Gallery Sector: A 2020 Mid-Year Survey

Arts Economics, a research and consulting firm focused exclusively on the art economy, produced this mid-year study in collaboration with a sociologist from Duke University. This report focuses on how COVID-19 has shaped the gallery sector and has changed interactions with galleries and the art market. The survey also reports the response of 360 collectors in three major art markets: the US, the UK, and Hong Kong SAR (China).

According to this report:

  • Despite the pandemic, 92% of high net worth collectors have purchased art in the first six months of 2020.
  • In 2020, over half (56%) of high net worth collectors spent over $100,000 on art and 16% spent over $1 million.
  • 59% of high net worth collectors experienced in increased interest in collecting.

The Art Basel & UBS Art Market Report 2020

Arts Economics partnered with UBS to conduct this study. They surveyed over 1,300 high net worth individuals. All respondents had household investable assets in excess of $1 million, excluding real estate (see figure 6.14 for further breakdown).

According to this report:

  • Art was perceived as a haven for capital when financial markets were uncertain.
  • Global art sales hovered at $64.1 billion. The three major art hubs (US, UK and China) accounted for 82% of global art sales. The US accounted for 44% ($28.3 billion) of global art sales.
  • There were an estimated 167,349 ultra-high net worth individuals around the world. They are important consumers in the luxury market.
  • Around half (49%) of millennial high net worth collectors in the US were most likely to purchase a work of art $1 million and above. This was followed by Gen-Xers (21%) and Boomers (3%). Millennial collectors averaged a total expenditure of $3 million over the two years (2017-2019).
  • The following chart breaks down the wealth brackets of collectors by geographic area:

Knight Frank Report 2020

The Knight Frank Report utilizes The Attitudes Survey, which is based on responses from 620 private bankers and wealth advisers managing over $3.3 trillion of wealth for ultra-high net worth individuals. The survey was taken during October and November 2019.

According to this report:

  • Collectibles account for 5% of their North American clients’ investment portfolios. The report lists the following percentages allocated to collectibles (including art, wine, and cars) as an asset class:

Barclays Report from 2018

Ledbury Research surveyed 2,000 high net worth individuals ($1.5 million+ in investable assets) and 200 with more than $15 million. Respondents were drawn from 17 countries around the world, across Europe, North America, South America, the Middle East and Asia-Pacific. The interviews took place during January and February 2012. Ledbury Research also conducted a series of interviews with academics, professionals, and other experts from around the world.

According to this report:

  • Treasure assets, including fine art, jewelry, and antiques, comprise 9.6% of a wealthy individual’s total net worth.
  • Women’s treasure assets account for 11% of their net worth compared to 9% for men. These figures are based on self-estimated calculation of treasures that individuals own.
  • Precious jewelry is the most popular category for wealthy individuals to own (70% overall and 81% among women). Jewelry is popular due to its intrinsic value. The report explains that in some cultures there is a tradition of holding onto a proportion of wealth in assets like jewelry, which can be easily transported in the event of an emergency.
  • Collectors of classic automobiles who have already started a collection — although relatively few and far between in the survey — have invested an average $641,000 in their hobby.
  • The top motivation for collecting is enjoyment. The emotional motivations for wealthy individuals to own treasure can be grouped into three main categories: enjoyment, social, and heritage.
  • The report charts the percentage of wealth held in specific treasure assets. This may be helpful if the only piece of information you find is the value of a prospect’s wine or stamp collection:

Sources:

McAndrew, Clare, An Art Basel & UBS Report: The Impact of COVID-19 on the Gallery Sector: A 2020 Mid-Year Survey

McAndrew, Clare, The Art Basel & UBS Art Market Report 2020

Knight Frank, The Wealth Report 2020

Barclays, Wealth Insights Volume 15, Profit of Pleasure? Exploring the Motivations Behind Treasure Trends 2018

FOR FURTHER RESEARCH:

In addition to key points from these recent reports, here is a list of resources that cover the art market:

  • Artnet (www.artnet.com) $450/year is a paid subscription database that lists the price of fine art using illustrated auction sales results.
  • ArtMarket Monitor (www.artmarketmonitor.com) includes free articles, a fantasy art collecting game, and a podcast that explores the mysteries of the art market.
  • ArtNews (www.artnews.com/top-200-collectors/) includes a free list of the top 200 collectors in 2015-2020. Entries include net worth, source of wealth, top acquisitions, and collecting interests.
  • Artsy (www.artsy.net) includes free biographical information on artists and auction sale prices for Christie’s, Sotheby’s and Phillips. Artsy also has an informative four-part series on the art market (fairs, galleries, patrons, and auctions).
  • Blouin Art Info (http://www.blouinartinfo.com/– note: page currently under maintenance) free limited access and $30/year is a global source of news, information, and expert commentary on art, artists, and the business and pleasure of making, buying, and understanding art.
  • Christie’s (www.christies.com/results) allows one to search results on their website for free and lists estimate and price realized.
  • Larry’s List (www.larryslist.com/about-us.php) $589/year Larry’s List Art Collector Database contains over 3,500 profiles of art collectors from more than 70 countries – based on the most comprehensive research ever done on art collectors. The database provides information on private art collections including artists and artworks collected, collectors’ ranking positions, and their activities on the art market. It is a practical tool for professionals and art enthusiasts presenting a detailed and comprehensive portrait of today’s contemporary art collectors.
  • Sotheby’s (http://www.sothebys.com/en/auctions/lots-archive.html) has a free sold lot archive. Like the Christie’s and Artsy resources, the buyer is not listed.

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Real Estate in the Age of Coronavirus

COVID-19 has impacted every single industry, usually for better or worse. But with real estate, the impact of the pandemic has been both better *and* worse, depending on the area of real estate you’re looking at. In today’s article, my colleague Josh Ostroski brings his deep knowledge of real estate to help us understand how our prospects who work in real estate (or who own well-placed properties) may be impacted now. ~Helen

There has been a lot of talk about real estate trends during the coronavirus pandemic. We have all heard about the urban exodus, housing prices increasing, and people working from home. I wanted to dig a little deeper to see if what we’re hearing is true or merely anecdotal and the reasons why.

The Urban Exodus

We have all heard that families are leaving cities to find more space in the suburbs. As the country was in lockdown, many people began to re-think what was important to them. With restaurants, bars closed, and shops closed, along with food delivery service expanding to more rural areas, there was less of need to be able to walk to amenities. However, according to a recent report by Zillow’s Economic Research team, they found that in most areas of the country “suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets.”

There are some outliers, such as the Northeast, where new pending listings in urban zip codes re-accelerating more slowly than in the suburbs. “Some regions saw stronger evidence for a suburban-urban diverging trend than others. For example, in the New York City metro, home values in urban ZIP codes were decelerating in June relative to pre-COVID trends ( -0.2 pp) while suburban ZIP codes were accelerating (0.2 pp).

The same trend holds in Boston with urban home values down 0.5 percentage points and suburban homes values up 1.3 percentage points. However, this deceleration was already a trend (comparing February YoY to January YoY) in the Northeast Region overall, and the New York City metro.

Conversely, the Chicago metro area experienced the exact opposite trend with growth, decelerating in suburban areas while urban areas accelerated. And areas like Philadelphia and Miami saw accelerated growth in both regions, but more so in urban ZIP Codes.”

San Francisco is seeing a trend to becoming a buyers’ market, as inventory and days on market are up. According to Zillow’s report, “in San Francisco, list prices have fallen 4.9% year over year and inventory has risen 96% with a flood of new listings. Higher levels of inventory, up 96% year-over-year following a flood of new listings during the pandemic, are sitting on the market in the city proper, a significantly larger jump than the surrounding suburbs. In San Francisco, though, the softening is clear as sellers flood the market with their listings and buyers have not changed their pace to match.”

The markets where the largest share of renters in the center city would gain the power to buy if they looked outside city limits are San Francisco, Seattle, Washington, D.C., and Boston.

Check Out These Market Trends

Zillow: 12 mid-sized markets to watch

Realtor.com: Hottest Zip Codes

Insurify: Cities with the greatest pandemic real estate booms

Housing Price Increases

Normally in an economic crisis, housing prices drop. However, in this pandemic, prices in many locations have increased. Part of the reason is the drop in demand was matched with a drop in supply at the same time, protecting prices. Then when people began to look to move, the lack of supply has created a seller’s market, increasing prices.

Historically Low Interest Rates

Interest rates are still at an all-time low, so buying a home is more affordable. There has also been an increase in homeowners refinancing, putting themselves in a better economic situation.

Lender Standards

During the housing crisis of 2008, the use of subprime mortgages and lenient qualifications caused homeowners that were not really qualified to purchase homes out of their price range. When prices plummeted, they owed more than the house was worth (became “upside-down” or “under water” on their mortgages). Since then, the government and mortgage lenders have become much stricter in their lending qualifications. That means more homeowners are qualified now. According to CoreLogic, lenders have tightened credit requirements or increased payment requirements, making riskier loans less common. This helps to protect homeowners in a down market.

Home Wealth Gains

According to the Federal Reserve, housing wealth is a major component of total household wealth in the United States. According to the National Association of Realtors, “as of 2018, a homeowner who purchased a typical existing home five years ago (2013) gained $79,488 in wealth (equity), of which $64,200, or 81 percent was from the home price appreciation ($197,400 in 2013 to $261,600 in 2018).”

Home equity is at an all-time high in the U.S., which has not only helped weather the economic downturn, but has allowed homeowners to use that equity to their advantage by having flexibility to be able to sell their home for something that works better for them, like investing in another property (which can generate rental income), home renovation (which further increases the home value), a child’s college education, emergency or major life events, or expenses in retirement. National Association of Realtors has calculated equity reports on 181 metropolitan areas.

Default rates have also remained low during the pandemic. According to ATTOM Data Solutions, “Equity-Rich Properties Continue to Outnumber Those Seriously Under Water by Four-to-One Margin; Portion of U.S. Homes Considered Equity-Rich Ticks Up to 27.5 Percent; Seriously Under Water Properties Down to 6 Percent.”

Second Homes

Another trend that we are seeing is people are moving into their second home and using it as their primary residences. According to an article in the Colorado Sun, schools in Aspen, Vail, and Crested Butte reported record interest in enrollment as part-time resident relocated to their second homes. At the same time, the market has seen increased home sales in these resort towns as people are wanted to get away from cities.

This is also happening in New York City, which was one of the hardest hit cities by COVID-19, where people are moving into their upstate NY, Hamptons, and CT homes.

Real estate agents are also seeing an increase in people that live in cities, but are renters, buying second homes outside of the city.

As researchers, we should keep an eye on surrounding communities outside of cities that were historically vacation areas to see if there is an increase in sale prices. This could also trigger people to sell a home in a vacation area to take advantage of the increased demand.

Commercial Real Estate

One industry that is struggling is commercial real estate. As many businesses struggle to stay afloat, they have not been able to pay rent and commercial real estate companies are feeling the effects. Also, since many companies are having their employees work remotely, they are finding out they don’t need all the space they have and once their lease is up, they are either looking for smaller space or going fully remote.

Physical distancing is also changing the physical layout needed in office areas, meaning that potential tenants are going to demand less open spacing (can this mean we can finally put a nail in the open workspace concept?), updated HVAC systems, and improved amenities.

There is an increased demand for warehouse and storage space, as e-commerce has surged. Biotech companies are also seeing increased demand for lab space.

I think it would be smart to look at a commercial real estate firm’s portfolio and see what types of companies are in their portfolio. Consider using the HBG Whitepaper on who is doing well to help you determine if the RE firm has any of those clients or companies in industries that are doing well. At the same time, if the portfolio is full of restaurants or retail it could mean lean times for the commercial real estate firm.

Also, be on the lookout for commercial real estate firms to take advantage of opportunities to acquire properties at a good price and build their portfolio. Here is a good place to keep an eye on commercial real estate transactions and news.

Working Remotely

Due to the pandemic, many people were forced to work remotely. According to Business Insider, following the pandemic more than half of Americans want to continue working remotely while two-thirds of companies may render their current work-from-home policies permanent. A few major companies have announced they will continue to have employees work remotely, including Google, American Express, Uber, and Airbnb. REI plans to have its employees work remotely indefinitely and recently sold its brand new headquarters in Bellevue, WA to Facebook for $368M.

The National Association of Realtors created a Work From Home Score that studied “3,142 counties that are best poised to provide a supportive environment for working remotely, mainly, working from home.” They used nine factors to calculate the score. The top 30 work from home counties represent the top 1%. The top five counties include:

  • Forsyth County, Georgia

Part of the Atlanta-Sandy Springs-Alpharetta metropolitan area, 11.3% of the workforce already works from home and 99% of the population is served by three or more broadband internet service providers (ISPs). It’s a fast-growing area, and the population rose nearly 21% over the last five years.

  • Douglas County, Colorado

Part of the Denver-Aurora-Lakewood metropolitan area, 11.7% percent already work from home and 98% of the population is served by three or more broadband providers.

  • Los Alamos County, New Mexico

Part of the Los Alamos micropolitan area and the Albuquerque-Santa Fe-Las Vegas combined statistical area, less than 3% work from home but what stands out is that 68% of the workforce work in office-using industries. Homes are very affordable and only 11% of homeowners pay  30% or more of their income on their mortgage.

  • Collin County, Texas

Part of the Dallas-Fort Worth-Arlington metropolitan area, 8.6% of the workforce work from home, and its population expanded 17% from 2014 to 2019, indicating it is a fast-growing county.

  • Loudoun County, Virginia

Part of the Washington-Arlington-Alexandria metropolitan area, 7.5% of residents work from home, with 44% working in office-using industries. 100% of the population is served by three or more ISPs.

These areas could also be a good place to keep an eye on if you have prospects living there as they could see an increase in their property value. It is also going to change the type of home people want to purchase, which may now include two office spaces and an area that can act as a home school.

What trends are you seeing in your area?

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Companies House: a treasure trove of info on UK companies

Carrying on with the theme of prospect research and the UK for another week, I’m delighted to welcome Toby Savin as the author of today’s Intelligent Edge article on finding information about companies and company directors from Companies House. An experienced researcher and leader in the UK prospect development community, Toby is Development Research Manager at the University of Leeds. My thanks to Toby for sharing his knowledge! ~Helen

Over here in the UK, for all the challenges we face, including (and because of) a culture where it’s still seen by many as crass or taboo to discuss money even in the context of giving it away to a worthy cause, the prospect research community has one resource that our counterparts elsewhere can only dream of: Companies House.

Companies House is the UK registrar of companies and there are 4.4 million companies (and their associated filings) on the register, many of which are privately-owned. This includes not just limited companies, whether quoted on an exchange or not, but also limited partnerships (the legal business structure of choice for private equity funds and hedge funds) and limited liability partnerships (‘LLPs’), which have been astonishingly popular across many sectors of the economy since being introduced in the UK in 2001, thanks to the twin benefits of limiting partners’ liability and not incurring UK corporation tax. It also includes companies limited by guarantee (as opposed to share capital), a structure much used by charitable trusts and foundations.

What’s more, it’s free to access this data: in 2015, a Beta version of the register – freely available to anyone with an internet connection – was launched as part of the UK government’s commitment to free, open data. Sure, the register has its faults: one major issue, which was successfully used to push for a formal consultation on reforming the register last year, is that the information filed is not actually verified or checked by anyone at Companies House.

But, unlike data on non-quoted companies that many other countries are forced to rely on (typically, top line numbers self-reported to large data vendors within a voluntary and entirely unregulated framework), in the UK there is a statutory requirement to formally submit a whole range of filings and many of the accounts themselves are externally audited. Make no mistake: this is a treasure trove of public data that ought to make us the envy of researchers across the world, especially the US, where finding reliable, detailed information on privately-held companies can be difficult or impossible.

Want to know not just who owns a particular company but how much they own? Check.

Want to know the total compensation of the highest paid director? Check.

How about estimating the value of a privately-owned business? For sure, this is a tricky pursuit at the best of times (like a house, a business is only worth what someone is prepared to pay for it) but close to impossible – and perhaps even futile – if you have only sparse, unreliable numbers to hand. Here too, Companies House can help: businesses of a certain size are required file full audited accounts with a profit and loss account, balance sheet and cash flow statement.

And in addition to the hard numbers, Companies House provides an abundance of less tangible (but equally useful) information. A Chairman’s Statement on the company’s performance and strategy, for example, might be taken with a large pinch of salt by a forensic accountant looking for fraud but in the hands of a savvy prospect researcher, the salient points can be summarised and used by a frontline fundraiser to completely transform a discovery meeting with that top prospect who hitherto has been impossible to engage.

For anyone wanting to tap this most valuable of resources as part of their prospect research (or indeed gift acceptance due diligence), here are some things to take into consideration.

Firstly, if you intend to process any personal data, you’ll need to carry out an assessment as to what research is acceptable from a data protection perspective. There is an abundance of guidance available, from bodies like the Institute of Fundraising and CASE (the Council for Advancement and Support of Education).

Secondly, you’d do well to keep tabs on any changes to the legislation governing the information that companies are required to disclose (thankfully, these are widely reported across the blogosphere and beyond) as well as changes to the search functionality and other aspects of the free Companies House beta service itself (signing up to be a member of the user panel can help with this).

Last but by no means least, you really need to know what you’re doing: the proverb “a little knowledge is a dangerous thing” might as well have its origins in interpreting data in company accounts. This one is a bit trickier to address but I’d like to highlight a couple of initiatives that will help.

Here in the UK, Researchers in Fundraising (RiF), a special interest group of the Institute of Fundraising, has launched a major project to develop a Researcher’s Handbook (including a chapter specifically on estimating wealth and capacity). Work on this is in progress and in the meantime, one very enterprising former prospect researcher has been working with some of the best talent in the sector (and me) to launch a Community Interest Company called PyroTalks offering a wide range of (virtual) conferences and training sessions, including a number that are specifically aimed at helping prospect researchers navigate some of the data you can find on the Companies House register.

Companies House isn’t the only source of useful data on UK organisations and potential donors but it is an essential part of any researcher’s tool kit; and, for all its faults, we’re lucky to have it. Take a look and expand your UK company knowledge.

Toby Savin is Development Research Manager at the University of Leeds in the UK, having joined the Alumni & Development Office there in 2010. Prior to this, he spent a decade working for a leading business risk consultancy in London and then a Nasdaq-quoted fraud prevention company, carrying out investigative due diligence and background checks on employees and vendors for banks, hedge funds and FTSE 100 clients.

In between these two ten-year periods working as a researcher, he gained first hand experience of worker-controlled co-operatives at two food co-ops in Manchester and volunteered on a number of different food and environmental projects. This experience formed the basis of a dissertation on the co-operative movement as part of a Master’s degree in Food Policy at City University in London, which he successfully completed with Distinction in 2011. Toby also holds a Bachelor’s degree, with Honours, in Hispanic Studies from the University of Birmingham, UK.

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Who’s doing well now?

In the past four weeks, I haven’t gotten a single solicitation from any of the charities I support on a regular basis. Not by email, not by snail mail, not by text.

One of the newer charities I support has sent two emails with links to video showing them in action, delivering meals to COVID-impacted families, low-income folks, nurses, doctors, hospital maintenance, and more.

But that’s it. Everybody else has been dead silent. And my charity didn’t ask me to help in either email.

Now, I understand, I’m not a major donor. But I am one of those long-term nonprofit-sustaining regular donors that helps pay for rent and toilet paper and electricity through my unrestricted gifts. It’s been my honor to support “my” charities, and I have been under the impression that my support was needed. I’d think so now more than ever. Their silence confuses me.

I’m not alone. There are millions of Americans looking for a way to be helpful. Even in tough times, especially in tough times, people want to give. People do give.

Perhaps the fear is that we might bother people while they’re down.

Or maybe some fundraisers are just deer in headlights right now, trying to figure out the “best practice,” “right” thing to do and are just…immobile.

I know, we’re dealing with a pandemic. This is a whoooole new playbook. But (if there’s a plus side to be found) we’re also dealing with an economic reality that we’ve seen before. Many of us lived and worked through the Great Recession, and although it’s not what we hoped for, we can do this again.

There’s a fundraising intelligence solution to this problem

Just like in the good times, our job as prospect researchers and fundraisers is to find the people and the industries that are doing well right now. We need to build an engagement strategy with them. And move forward. Because they are looking to help and they will give.

Maybe they’re current major donors (which is always the best, of course), but they don’t have to be. They can be those next-tier people further down in your portfolios, or people, companies, and foundations that you haven’t even approached or considered yet.

To help our clients right now, my colleague Angie and I started doing research into companies, industries, and people that are thriving in this upside-down economy, and we wanted to share what we found with you, too. Spoiler alert: there are a lot of people and companies doing well right now. More than you’d think.

Let’s start with the companies and industries that won’t surprise you a bit, because these are the ones that you are probably personally are relying on right now:

  • Costco
  • BJ’s
  • Walmart (hiring 100,000 new workers) and other discount retailers
  • General Mills, ConAgra, Campbell Soup and other companies making shelf-stable food
  • Companies manufacturing cleaning products (including small/nimble companies that have pivoted to meet new opportunities like Fabrizia)
  • Amazon (hiring 100,000 new workers)
  • Comcast, Charter, Cox, RCN, and other internet providers
  • Personal fitness equipment companies (treadmills, stationary bikes, weights, etc.)
  • Companies manufacturing puzzles and games
  • Online / computer gaming (Nintendo, Electronic Arts, Activision Blizzard, etc.)
  • Online education companies
  • Zoom, GoToMeeting, and other videoconferencing services
  • Project management and collaboration software
  • Netflix (and Hulu, and Disney Plus, and every other in-home entertainment-related company)

Okay, a lot of those make sense, right? It’s easy enough to go to your database and filter on company or industry code to get a list of constituents affiliated with these companies and industries. (As long as you’ve been gathering that information and keeping it up-to-date in your database. If not, here’s your opportunity to get started).

What other companies and industries are making money now?

  • Healthcare-related (medical supplies, medical equipment, diagnostics, tele-medicine)
  • Drug / vaccine companies that are in the race right now (Moderna, Sanofi, Johnson & Johnson among many others)
  • CVS, Walgreens, Rite Aid and other drugstore retailers
  • Staples/Office suppliers
  • FedEx, UPS, supply chain services and logistics
  • Private jet companies (NetJets, Wheels Up, Delta Private Jets, etc.)
  • Industrial warehousing
  • Data centers
  • Alcohol beverage companies and retailers
  • Cannabis/CBD/hemp-related growers and sellers

Don’t forget the individuals that bet on an economic downturn. Hedge fund managers expecting a downturn shorted the market and made billions. Here are just a few:

Boaz Weinstein’s Saba Capital Management Tail Fund was up 175% in March, with an estimated gain for Saba’s funds at $500 million. According to Reuters, other winners betting on a downturn and winning big included Capstone Investment Advisors, Universa Investments LP, 36 South Capital Advisors, and Cambria Investment Management LP.

You may also have read one of the many articles about Bill Ackman (of Pershing Square Holdings) who earlier this year bet $27 million in shorted high-yield bonds that made him a profit of $2.6 billion. Ackman published this letter to investors which was leaked to the media explaining in detail how (and why) he did it.

There are whole mutual funds designed to take advantage of economic downturns. Just do a search on “tail risk fund” and you’ll be amazed at the number of funds that are in the black right now.

These people and companies are not alone. While many of our prospects don’t do well in a recession, it’s good to remember that some people (and companies) do. Some even thrive, and – like Jack Dorsey – want to help.

But you don’t have to look to the billionaires. There are lots of regular fund donors who would love to support their favorite charities right now if you make a good case for why your nonprofit is relevant – and then ask.

Your org doesn’t have to be COVID-specific, either. Botanic gardens and nonprofit parks that are open provide much-needed relief now. Symphonies and theaters are reaching out with online concerts and plays to meet our need for entertainment. Libraries, bless them, are still loaning e-books and doing story hours for kids via video.

There are prospects out there with capacity, inclination, and connection to all of our nonprofits. We have to give them the opportunity to be helpful.

FOR FURTHER READING

Coronavirus Business Tracker: How The Private Sector Is Fighting The COVID-19 Pandemic, Forbes

Some Big Investors Smell Profit in Virus-Plagued Companies, New York Times

Hedge Funds Legends Quietly Contacting Investors, Citing Historic Buying Opportunity, Institutional Investor

This Hedge Fund Saw Risks of Coronavirus Early. Now It’s Up 36%. Wall Street Journal

The Booming, Cloistered, & Rarefied World of Private Jet Pandemic Travel, Institutional Investor

Grocery delivery apps see record downloads amid coronavirus outbreak, TechCrunch – Includes download numbers. Data supplied in the TechCrunch article available here.

Gaming Stocks Are Holding Up Relatively Well as Consumers Stay Home, The Street

Coronavirus Pandemic Widens Divide Between Online, Traditional Businesses, Wall Street Journal

A note of special thanks to my colleague Angie Stapleton, who provided absolutely stellar background research for this article.

 

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A bigger boat

My brother-in-law’s voice had a huge smile in it when I picked up the phone. He might not even have bothered with a “hi.” Just: “You’re going to love this, Helen.”

As part of his and my sis-in-law’s kayak and outrigger tour business in Jaco, Costa Rica, Neil captains the Ashuma, a trimaran that guests book for day sails in Herradura Bay.

Neil’s also got a pretty good nose for prospect research, and every once in awhile he comes across a tip or resource he knows I’ll like, usually related to Central American sources or to yachts and/or the people who own them.

“I’m standing on Ashuma looking at the Hodor. Nice helicopter on the back. I’m going to send you a picture.” 10 seconds later, this pops up on What’s App:

Hodor. Photo by Neil Kahn

Now, Ashuma is not exactly a small sailboat – she’s 7.6 meters (25 feet) long, but Neil tells me she’s a dingy next to the Hodor, which I later learn is 66 meters long (216 feet).

As Neil is talking about what she looks like, I click the link to the article on the building of the Hodor on Super Yacht Times that he sent after the photo. It’s got lots of nice pictures which I start to scan through.

I see a helicopter, three or four boats on the deck, a winchy-crane-looking thing, three dune buggies, a gorgeous cabin and galley…

I’m skimming, skimming, mainly looking at the pictures, not really reading because he’s still on the phone…and that’s when I see it.

“Wait! Neil??!?”

Neil chuckles at the tone of my voice: “I was waiting for you to find that.” Simultaneously he and I both say, “SHE’S THE SUPPORT YACHT.”

My exhale turns into an almost-silent “holy cow.”

Lonian. Photo by Neil Kahn

Hodor is essentially a floating carriage house carrying the 20 support crew and toys that don’t fit on – or that they don’t want crowding up – the $125 million, 87 meter (285 foot) superyacht Lonian. Lonian is owned by 51-year-old Las Vegas billionaire, philanthropist, and art collector Lorenzo Fertitta and his wife, Theresa. The megayacht only has room for 12 guests, so you can imagine how big each stateroom is.

There are lots more resources

As we were about to hang up, I mentioned to Neil that two weeks ago my colleague Rick Snyder (no relation to this fine craft) wrote an article chock-full of resources that can help us think about (and estimate) the additional costs that a wealthy lifestyle entails. Nannies, housekeepers, family office managers – all of the people needed to keep the small village of everyday high net worth life running smoothly.

Neil’s call was another reminder to me (and to all of us) not to take things we see at face value, but to look behind the cost of the big yacht (or house, or island) to see if there’s an even bigger one to consider. Fortunately, there’s lots of information about these wealth indicators if you know where to look for them.

For example, if you ever happen to be walking down a wharf and see a yacht in a slip (or slipping down the waterway you’re walking by) you can check it out on the very handy MarineTraffic.com. The website/app doesn’t go into detail about a watercraft’s ownership, but you can get a lot of information for free about that ship sailing by.

Besides that and the other sources linked in this article, help yourself to lots more yacht (and art, and horse, and jet) resources which can be found in the “Wealth Indicators” section of the HBG Prospect Research Links (Americas page). Access is free; we just require your email address (which we don’t use to mail you) to register to access the pages.

If you have other favorites, don’t be shy – share them here with all of us, and I’ll add them to the links page for everyone to use.

The Helen Brown Group LLC
489 Mt. Auburn Street, Suite 4
Watertown, MA 02472
617-393-1983
info@helenbrowngroup.com