'Primates of Park Avenue' Author on Why New York's Trust Fund Families Are Cutting Costs (Guest Column)
Those trust funds of New York's finest families are fraying, as author Wednesday Martin describes Manhattan’s ever-shifting hierarchy of status.
This story first appeared in the April 22 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
These days in New York, if you want to spot members of the city's old money — that exotic, endangered species, as quaint as a guy swimming naked in the men's pool at the U Club — you'll need special goggles, or at least a guide who knows their migration patterns and local habitats and can point them out outside Doubles (the private club in the basement of the Sherry-Netherland Hotel on Fifth Avenue).
In danger of extinction with each passing generation, the lineaged rich are not so rich anymore — thanks to nearly two decades of pathetic returns on top of the division and the dwindling of trust funds over time. "Your grandfather's $100 million divided 10 ways means $10 million, and with diminishment and inflation, you need a real job to hold your ground," says one new-moneyer who works at a private equity firm. "Polite jobs" like gigs in art galleries or in the development office at The Met no longer cut it. Their social access has allowed them careers as wine advisers or art consultants, essentially guiding the newly minted's purchases of items that have become a form of cultural capital. Or they may have branched into finance and wealth management, finding that their family name and connections can have a halo effect with aspirational sensibilities.
So this generation has been forced to pretty much behave like everybody else: hit the Drybar for $45 blowouts and worry about getting their progeny into the private schools that were once their exclusive right and domain. "Dalton's whole thing for a while now is a push for diversity," offers one Upper East Side mom. "And at Brearley, Collegiate and just about anywhere else really good you were sure your kid could go, the flood of hedge fund money means being a legacy [a person whose parent attended] doesn't count the way it used to."
Contempt for money newer than your own isn't new. Ever since the Dutch patroons looked down their noses at the nouveau riche robber barons building their mansions along Fifth Avenue, the spin cycle of new money becoming old money bemoaning new money has continued. It echoes today with the old elite fretting about hedge fund money — not new money but "more money" — while some hedge funders speak in anxious tones about the wave of foreign wealth flooding the city's real estate market. The rarefied top perches of the city's new glass residential towers overlooking Central Park continue to be snatched up (and sometimes not even occupied) by investors including Greek shipping tycoons, Chinese businessmen and Russian oligarchs.
This reversal of fortune has taken place as rapidly and startlingly as "the billionaire's building," One 57 (with its $91 million penthouse) rose to cast its shadow across Central Park. "Historically, new money used to ape old-money behavior and mores — what is maddening most to old money in New York is that the newly minted just don't care about them anymore," says Richard Kirshenbaum, author of Isn't That Rich: Life Among the 1 Percent. "They're not as interested in living in their co-ops because they aren't interested in prewar aesthetics. They're not interested in joining their clubs because they can build new clubs with more modern amenities. It's almost as if the not-caring upsets their equilibrium by making them invisible."
But what of the young old-moneyed who are struggling to pay their bills and function as part of a rich working class? A Wall Streeter whose terror of trust fund shrinkage drove him to carve out a finance career has siblings who are not faring as well. "They're kind of lost, and they lean on our parents. It's a thing happening in my circle," he says. His friends haven't been able to live off their interest for years, and dipping into the capital can involve not only big financial penalties but the humiliation of being at the mercy of your elders. Plus, observes Upper East Side psychoanalyst Rachel Blakeman, who counts the younger old-money crowd among her patients, they face the same self-doubt their parents did about their worth and competence, and they struggle with how they can measure up. In March, a Harvard graduate from a privileged family was indicted on fraud charges for stealing from charity funds to trade stocks in his personal account.
But not all anxieties are old. A new-money mom says she tries to avoid wearing Dolce & Gabbana, Roberto Cavalli and sexy over-the-knee boots. She is concerned they might make her "look Russian."