The Art of Collecting Luxury: Inside Drew Aaron’s World of Fine Art and Real Estate
With growing political uncertainty in the United States, many ultra high net worth American citizens are beginning to look elsewhere for second residency options. Serial entrepreneur Drew Aaron and his supermodel wife Hana Soukupová were fixtures on the New York City social and fashion scene for nearly two decades before deciding they wanted a quieter pace of life to raise their family. Mallorca checked every box. In 2016, after viewing numerous homes across the island, the couple purchased a rustic finca in the mountains of Mallorca and established themselves in Spain. The home is named Turmalina, Spanish for gem, as it was originally built by the Swarovski family.
Drew’s first venture was Lionsgate Capital, which has become the leading financing firm for luxury properties throughout the Balearic Islands and southern Spain. Two years later, he launched Gallery RED, the only gallery in Spain selling Warhol, Basquiat, and other iconic artists alongside top emerging international talent. Gallery RED now operates eighteen spaces in total, twelve open to the public and six by appointment only, spread across the Balearic Islands, making it the fastest growing gallery in Spain. A year later, Aaron opened Rouge Mallorca, a coveted luxury boutique stocking nearly impossible to find Hermès, Chanel, and Louis Vuitton special edition bags and accessories. This year, Rouge Mallorca added Rolex to its roster of blue chip brands, maintaining twenty five of the most desirable special edition models and Daytonas. The ultra high end space sits in the center of Palma de Mallorca’s best shopping street and carries only brand new product.
From an insider’s perspective on fashion, luxury, and art, what comes next for this dynamic couple with the Midas touch? Drew Aaron shares his outlook on art and luxury goods as alternative assets, and how expats moving to high tax countries like Spain can lessen their tax exposure.
How did you get started as a collector?
I was fascinated by Warhol as a young child. He’s one of my favorite artists, and I began collecting the most desirable Warhol prints in the early 2000s, when that’s where my budget allowed me to be. The first pieces I bought were a Campbell’s Soup Can from 1968 and a Warhol Marilyn from 1967. Our neighbors in the Hamptons were among the largest private art dealers in the world, and our neighbors in Greenwich, Connecticut are among the most respected private art collectors in the world. Having close friends at the top tier of the art world helped us become far more astute collectors and put together the right strategy for investing in art.
What is your philosophy for collecting and investing in art?
If the world came to an end and the art market plummeted, I would only want works we truly love to live with. We won’t buy a piece unless we genuinely love it. Whatever the work is, if it’s not something I would hang in one of our homes, I won’t buy it. We love Basquiat, Warhol, Jeff Koons, and George Condo. Gerhard Richter is a great example of a brilliant established artist whose prices should only continue to rise given his age, and he is arguably the most important living artist today. It would be fascinating to add an A plus Gerhard Richter abstract bild, a large scale Calder mobile, a Twombly, or a beautiful de Kooning canvas to our permanent collection, since these artists stand apart from everything else we’ve collected and remain among the best to invest in. The most important overall philosophy in collecting is to only buy unique works. It doesn’t matter whether it’s a large scale painting, a sculpture, or a small work on paper, a unique piece will always carry more significance and should appreciate more in value than similar works produced in larger editions.
The more established an artist is, the more we’re willing to invest. We’re always looking for exceptional works, particularly ones we believe will see the greatest increase in value despite volatile markets. We’re living in uncertain times, with a global recession looming over the economy, and all markets will rise and fall. Even so, Christie’s November contemporary art sales exceeded 1.5 billion dollars in under twenty four hours. Combined with additional results from Sotheby’s and Phillips, alongside Art Basel Miami and the many art fairs happening simultaneously, more than 5 billion dollars in art sales transacted globally in the fourth quarter of 2022 alone. The art market has seen a steady upward climb in value over the past twenty years, a strong indicator that art as a long term investment is here to stay.
Gallery RED is one of the only galleries in Spain focused on Warhol, Basquiat, Hirst, Richter, and Murakami, with pricing that ranges from ten thousand dollars for a print to more than ten million dollars for an original work on canvas, and everything in between. There are many other well respected galleries throughout Mallorca, Barcelona, and Madrid, and we partner and collaborate with nearly all of them, each bringing its own niche, expertise, and identity to the market.
Built on a Collector’s Instinct
One of the qualities that continues to set Gallery RED apart from other global galleries is that it was built by a collector first, someone with a genuine collector’s mentality and a natural love for contemporary art rather than a purely commercial one. I still hand select every work we purchase myself, and that remains where I spend most of my time, alongside working closely with our artists. That instinct, choosing based on conviction rather than trend, has shaped nearly every decision the gallery has made since its founding.
When we launched Gallery RED four years ago, there was a steep learning curve. It was learning by doing, and a lot of learning from my own mistakes. We brought in incredible Basquiat and Jeff Koons works, and everyone came through our spaces, took photos, and marveled at them, but very few actually purchased. I hadn’t considered that no one steps off a plane in Mallorca thinking, I want to go buy a Basquiat. They come here for the sun, the sea, the Mediterranean lifestyle, beautiful beaches, hiking, biking, incredible food, and of course the deep culture found throughout Mallorca and Spain. Adjusting to that reality was humbling, and we had to reshape our business model around both top established artists and top emerging international talent, artists who could one day become the next Picasso. We needed to find a distinct form of value to offer our clients, and ultimately what Gallery RED provides is access, access to the best work from the best established and emerging contemporary artists in the world.
How do you feel about investing in NFTs?
I know digital currency is the future, and I believe digital art will be an important part of that future as well. That said, I don’t think NFTs have found the right equilibrium in the marketplace yet, and I think everyone needs a bit more patience to see where NFTs ultimately land within the global art world. Even people who have been in the art world for years are still trying to fully understand what an NFT actually is and what its true value represents. I’m a fairly risk averse person, so currently I don’t purchase cryptocurrency and I’m not actively investing in NFTs. The first six NFTs we released, about a year ago, were for Domingo Zapata, a fun emerging global artist and a friend. It was exciting to be part of that moment, but when it comes to NFTs, I’m still genuinely trying to understand them.
How did you and Hana Soukupová transition to life in Mallorca?
For us, Mallorca was a major life change. It’s an incredibly safe place to live, and we get roughly 320 days of guaranteed sunshine each year. We spent fifteen years going out most nights in New York City, and between our various businesses and organizations, it eventually became tiring. The constant pace and the heavy focus on material things wore on us. Now we simply want to slow down and enjoy a more natural life with our children in Mallorca. We love New York City, and it remains one of our favorite cities in the world, but for raising children, Mallorca is one of the best places on earth, and it’s remarkably international as well. Our kids attend a British school just outside the city center of Palma, and we live nearby, surrounded by the Tramuntana mountains in the central region of the island. It’s a beautiful and privileged place to raise our children surrounded by nature, and it allows us to shelter them somewhat from the typical pace of major city life, with all its screen time and constant digital devices. My wife grows sixty different fruits, vegetables, and spices on our farm. We’ve rescued three donkeys, and we live a genuinely fun life. We’re still adjusting in some ways, but we truly love the slower pace and being settled into the countryside. Beyond the incredible climate and nature, the doctors and hospitals here are excellent, as is the food. Mallorca is deeply committed to ecology and sustainability, and I currently sit on the advisory board of the Mallorca Preservation Foundation, which gives me a real sense that we’ve found ways to give back to the island.
I’m also the one who travels into Palma most days, helping oversee Lionsgate Capital, Gallery RED, and Rouge Mallorca. We’re fortunate to have a highly senior and talented management team in place, so much of my focus now centers on future growth strategy. Lionsgate Capital’s president is a former director of Banco Santander, the largest bank in Spain. We’ve built an excellent team, and she runs much of the day to day business.
How does Lionsgate Capital work with investors looking to buy property in Spain?
Spain is one of the highest tax jurisdictions in the world, and the Balearic Islands specifically rank among the highest tax regions within Spain. Many people consider the Balearics to be difficult for business, which creates real barriers to entry. Even so, it’s encouraging to see entrepreneurs successfully exploring new opportunities here, willing to invest in a climate that is, by nature, challenging for international business. Opening a business in Mallorca means operating under strict tax regulations, and everything must be done strictly by the letter of the law.
Ninety percent of our Lionsgate Capital clients are cash buyers who have never held a mortgage in their lives and don’t need financing, but understand that when purchasing a home in Spain, it clearly makes financial sense to do so. It’s also important to note that Spain imposes a personal wealth tax of up to 3.45 percent of an individual’s personal assets. That means if you purchase a ten million euro property, you could be paying more than 300,000 euros annually. We recently processed a mortgage on a 26 million euro home and saved the couple more than 600,000 euros per year in personal wealth tax. Even non-residents who own property in Spain remain liable for wealth tax on any assets held within the country. Lionsgate Capital works with the top thirty banks in Spain, along with numerous private banks and financial institutions across Luxembourg, Switzerland, Germany, and the rest of Europe. Many of our clients aren’t residents of Mallorca at all. They simply own an ultra luxury vacation home.
What do you see as viable alternative investments right now?
Art and real estate. The dot com bubble burst of 1999 and 2000, the global market meltdown of 2008 and 2009, the Covid pandemic, and various other unexpected financial crises have each proven that art, alongside real estate in the right regions, can serve as a terrific alternative investment against more volatile markets. When done correctly, investing in art can also act as a safe hedge against inflation. If you buy unique and strong works by great blue chip artists, you’ll typically fare far better than with many traditional investments. Art and real estate are tangible investments you can live with and genuinely enjoy, whether it’s a Blue Period Picasso painting, a flat in London, or a home in Palm Beach. You simply can’t get that same enjoyment from shares of stock, bonds, or bitcoin. Many of our clients are interested in investing in art but initially assume they need a hundred thousand or a million dollars to buy a piece. In reality, we have art available at every price range, and emerging artists in particular are often where you’ll see the strongest return on investment. You could put 100,000 dollars into Apple stock, and maybe it goes up or maybe it goes down, but you get no tangible enjoyment from it either way. Buy the right art from the right artists, and it should be both a great long term investment and something you can genuinely experience and enjoy.
