Most Wanted on Museum Boards: Hedge Fund Managers

Most Wanted on Museum Boards: Hedge Fund Managers
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LinkedinDiggFacebookMixxMySpaceYahoo! BuzzPermalinkBy LANDON THOMAS Jr.
Published: December 13, 2006
How do you know you have landed the right hedge fund executive for your museum board? When he rakes in $4 million as co-chairman of the year’s top fund-raising gala.

So it went at the Guggenheim International dinner last month when David K. Ganek and his wife occupied center stage, holding forth with the likes of Dennis Hopper and Mayor Michael R. Bloomberg.

“It was incredible, the best year we have ever had,” said Lisa Dennison, the museum’s director, who recruited Mr. Ganek to be a Guggenheim trustee and has appointed him to lead a committee charged with advising her on how to revitalize the museum’s mission in New York.

For the 43-year-old Mr. Ganek, a prominent collector of contemporary art who has just moved from Greenwich, Conn., to Manhattan, the event represented, in many ways, his public debut on the New York arts scene. A few days later, he gave a private dinner for art world notables in his $19 million apartment at 740 Park Avenue, one of the city’s most prestigious co-ops, where he displayed his collection, which ranges from Richard Prince to Jeff Koons.

In the fast-shifting sands of New York’s moneyed classes, the explosion of hedge fund wealth has created a new financial pecking order. A century ago, the steel and oil money of Frick and Rockefeller was deemed to be new until it came to endow some of New York’s great cultural institutions. In the 1980s and 1990s, the buyout kings Henry R. Kravis and Ronald O. Perelman became billionaires and were furiously courted to join museum boards.

Now institutions like the Guggenheim, the Whitney Museum and Lincoln Center are making a push for the newest money on the block as they try to lure hedge fund executives to join their boards. This effort has dovetailed with an emerging tendency by hedge fund moguls to spread their wings a bit in greater New York society.

“A lot of these guys when they get their wealth and power, they want something to go along with that,” said David Patrick Columbia, who has occasionally featured photographs of Mr. Ganek and his wife, Danielle, on his Web site, New York Social Diary. “Some collect art, some want to be philanthropists and once they get into the swim they find themselves being wined and dined by a variety of people. This experience gives them an affirmation of their social magnitude and that is an alluring thing for someone who makes a billion dollars.” The bait has always been simple: It is one thing to be rich and have world-class art on your walls, but it may not match the frisson that comes with having your name attached to a wing, rotunda or atrium. So, Mr. Kravis joined the board at the Metropolitan Museum of Art and got his wing; Mr. Perelman cast his lot with the Guggenheim and endowed a rotunda. More recently, Donald B. Marron, the former chief executive of PaineWebber and past president of the Museum of Modern Art board, had an atrium named after him and his wife.

Now with top hedge fund executives expected to receive annual bonuses that should exceed $1 billion this year — by comparison, the best- paid Wall Street chief executive may get $50 million — they have become even more lucrative game.

So far, the most aggressive institution has been Lincoln Center, which for the third year this April will hold a gala dinner supported by those in the hedge fund industry.

The board has also relied on the reputation of one of its trustees and biggest donors, Bruce Kovner of Caxton Associates, to make its case to the next generation of hedge fund managers. A few weeks ago, Mr. Kovner presided over a breakfast at his office with David M. Rubenstein of the Carlyle Group. In attendance were Eric Mindich of Eton Park, Daniel H. Stern of Reservoir Capital, Glenn R. Dubin of Highbridge Capital, Steven T. Mnuchin of Dune Capital and Marc Lasry of Avenue Capital. Both Mr. Mnuchin, a neighbor of Mr. Ganek’s at 740 Park, and Mr. Mindich are on the Whitney board.

Given the billions of dollars that hedge fund executives have spent on art — Steven A. Cohen of SAC Capital has invested well over $500 million himself — there have been only a few defining contributions made so far. Kenneth C. Griffin, 38, the founder of Citadel, has donated $19 million to the Art Institute of Chicago’s new modern wing, which will be called the Kenneth and Ann Griffin Court. And Mr. Kovner, whose interests veer more toward music manuscripts, has given $20 million for Lincoln Center’s new campus.

While Mr. Cohen has joined the Modern’s painting and sculpture committee and Mr. Ganek sits on the Metropolitan Museum of Art’s photographs committee, no hedge fund executives sit on their main boards, nor those of New York’s other old-guard institutions like the New York Public Library or the Frick Collection. Experts say this may be a reflection of how recent the hedge fund fortunes are as well as the fact that for some their wealth allows them to create their own private museums.

“I can’t imagine that Steve Cohen would want to go to a board meeting at the Met or MoMA if he can spend over $100 million on a De Kooning,” said Michael M. Thomas, a former partner at Lehman Brothers and a close follower of the art world. And the boards of the city’s major institutions, may be reluctant to embrace too quickly this era’s titans.

The Whitney’s courtship of L. Dennis Kozlowski, the former chief executive of Tyco, in 2001, before he was indicted on charges that included skirting sales taxes on his art acquisitions, remains a cautionary tale.

For the Guggenheim, it is Mr. Ganek’s 20-year interest in collecting modern art that makes him an ideal catch. “David has a real passion for this,” said Ms. Dennison, who has made it a priority to recruit younger financial executives to her board.

The son of a money manager, Mr. Ganek grew up in New York City. He is a former protégé of Mr. Cohen and left SAC Capital in 2003 to set up his new fund, Level Global Investors. By the standards of today’s giant funds, his new $2.4 billion offering, which is up from $550 million at its inception, is by no means big. Nor has it been an extraordinary performer this year: Mr. Ganek’s fondness for betting that stocks will go down by selling them short has hampered his returns: he is up 9 percent through the first week of December, compared with a total return of nearly 15 percent with dividends reinvested for the Standard & Poor’s 500.

People who know Mr. Ganek say he prefers a low profile and he would not comment for this article on his increasing involvement in the arts.

Still, he is by no means shy: unlike other art moguls who prefer to phone their bids in, Mr. Ganek is a frequent presence at the major art auctions. He also likes to entertain; this summer he and his wife played host to 700 people for a charity benefit at their beach home in Southampton.

His profile is likely to increase after the publication of his wife’s book next June, “Lulu Meets God and Doubts Him,” which Viking is promoting as “The Devil Wears Prada” for the art world.

It may be early for Mr. Ganek to get his own wing, but with his small fund and his larger cultural ambitions he has already found himself a seat at the grand and growing table of New York society.

“What gets you in is when other people want your money,” Mr. Thomas said. “It’s been like that for years. He is having fun with his money, and why not.”