Rebecca L. Fine is a founding member and CEO of Athena Art Finance and managing director, art investments at Yieldstreet, which acquired Athena in 2019.

Rebecca L. Fine is a founding member and CEO of Athena Art Finance and managing director of art investments at Yieldstreet, which acquired Athena in 2019. A graduate of Columbia Law School, she began her career as an antitrust and securities litigator before finding her way back to her true love — art. Crain Currency spoke with Fine about how she channeled her love of art into a way for family offices and other investors to diversify their portfolios.

How did you first get interested in working in art?

My genesis story is I’m third generation, matrilineally, in the art world. My great-aunt Rose Fried was the first female gallery owner in New York City. The gallery was called Pinacotheca. She died just before I was old enough to know her, but my mother grew up working in her gallery. My mom is a sculptor. My sister is an abstract painter. My brother is a figurative painter, and my other brother is a filmmaker. I was the black sheep of the family and didn’t have a modicum of talent. So instead of doing a Ph.D. in art history at Yale, which is where I thought I was going to go, I ended up applying to law school on a lark and then became a lawyer, thinking I would focus on the art market. But there were very few courses being taught at the time on art law and even fewer job opportunities.

You are involved in two art-related financial companies; can you explain the role of each?

Athena was a company we started in 2015 when we began lending. At the time we were principally funded by the Carlyle Group and a private Swiss bank, Pictet. In 2019, we were acquired by Yieldstreet. Yieldstreet, who were very prescient about this, thought they could take the loans that Athena had underwritten and pull them into investment vehicles that are highly diversified. An example is one of our funds that has more than 10 individual loans with more than 200 artworks by more than 100 different artists; and through notes that synthetically link to the underlying borrowers’ repayment of principal and interest on those underlying loans, the investors clip the note that produces very attractive double-digit yields. 

We have launched eight art debt funds or diversified art funds. And there was so much appetite for this type of investment and exposure to art that investors wanted to be one step closer to art ownership. At the end of 2021, I launched with the team our Yieldstreet diversified equity funds, where investors participate in the collective ownership of collections of artwork that we acquire, based on all of the proprietary analytics that we’ve developed over the course of nine years as a lender.

Is it better to own actual artwork or invest in an art-focused investment fund? What are the merits of each option?

For family offices that are looking for exposure to art as an asset class, who have not already invested or don’t have advisers who are advising them on acquisitions, investing in a diversified fund, such as the ones that we offer at Yieldstreet, is superior. We do not advise collectors on acquisitions. We have a lending business, and then we have these funds, but we’re not art advisers. So it really depends on their objectives. If they’re really buying for investment purposes, then they’re well-advised to consider working with experts. My perspective is that diversification is very important to investors and family offices, and that’s where our funds are superior, where they’re looking for exposure to the asset class. For people who wish to buy art — because they love it and want to enjoy looking at it — that’s a very different calculus.

Why do high-net-worth individuals typically want to get loans to purchase art?

Buying art is a good strategy for family offices, in short. But it’s highly inefficient to buy art with 100% cash. And all running family offices understand the leverage multiplier. That’s why we exist as a company. Frequently, people borrow against art they previously acquired that has appreciated greatly in value; borrowing against art is a form of equity recapitalization. It preserves their ability to obtain loans based on credit or other nonart assets.

Our art investment funds are really designed for people who are looking for exposure to art as an asset class. We don’t have advice on the sort of specific allocations, because it depends greatly on their investment horizons, their risk appetite, their existing holdings and public-private market exposure, etc. But clearly, art is a very good investment compared to others.

What is the correct way to think about art as part of a larger investment portfolio?

Historically, art has been a store of wealth during past times of recession and uncertainty. Look back at the global recession in 2009, where sales fell in value by something like 36% to a low of about $40 billion. The market bounced back really strongly in 2010. And by 2011, sales were nearly double that amount. That rebound was very short compared to the equity markets, which took until 2013 to reach their pre-recession levels again.