Over the weekend, both the FT and the Guardian report on Phillip Hoffman’s intention to bid on the art assets of two companies looking to raise cash.
Led by Philip Hoffman, the chief executive of the Fine Art Fund Group, the investors are bidding for a collection at a Spanish bank, worth between $20m and $50m, and a manufacturer, estimated at $12m to $15m. [ . . . ] Mr Hoffman said: “I think for a lot of these companies, it has become incredibly difficult with cashflow drying up. The banks won’t lend, or when they do people are being charged 10 per cent or 11 per cent over Libor and then they still have to pay the money back. The Spanish bank would rather have the cash as it has huge issues with real estate.
“There are some serious collections coming onto the market, where corporations are selling, probably because they have spent $10,000 on art a year, which has since turned into an asset of $1m. In difficult times, these paintings have become disproportionate in value and the question arises of whether you keep a $1m work on the wall, or should you release that, which could go to payingloans.” [ . . . ]
The biggest collections in the corporate art world tend to be in the banking sector, with law firms also big spenders. Many companies have bought art to support young artists as part of their corporate social responsibility programmes, alongside sponsoring exhibitions and fairs. The biggest corporate art collection is considered to be that owned by Deutsche Bank, which has a large steel sculpture by Anish Kapoor, and a Damien Hirst dot painting, among its 56,000 items. Deutsche Bank has said, however, that it remains committed to owning its art collection. Another big collection is owned by UBS. It has work by Roy Lichtenstein and Willem de Kooning, but has also said it is keeping its collection.
Mr. Hoffman is eager to be seen buying art and has said that he has 16 billionaire families as investors in his various art funds. The FT says there are five or six different funds and we know from Mr. Hoffman’s other press statements that he’s looking to buy Indian art through a fund vehicle too. Each fund raises money in $10 to $15 million chunks with Hoffman’s group’s capital making up the remainder. Fine Art Fund Group only plans to hold the art for five years or less.
Wealthy Syndicate to Buy Corporate Art Works (Financial Times)