Russia's Safe Haven: Art

Bloomberg‘s John Varoli explains the forces beneath the Russian art market which has a week worth of sales in London starting with Sotheby’s today:

“Russia’s economy is clearly in recovery and oil prices are up,” William MacDougall, co-director of MacDougall’s, said in an interview. “The main dark cloud is the Greek debt crisis. While it raises problems for euro-denominated assets, it should be good for fine art, which is a safe haven.”

Collectors from emerging markets such as Russia and China have been buying the best examples of their countries’ art heritage at recent sales, while the other international Impressionist and modern works have been selling for record prices.

“Classical 19th-century paintings continue to be the strongest sector,” MacDougall said. “Early 20th-century modernism is also strong where good provenance trumps authenticity concerns.”

The four auction houses raised 29.1 million pounds during London’s Russian week in 2009, half that of the year before. In April this year, Sotheby’s and Christie’s in New York sold $18.5 million in Russian art.

“The sales results in 2008-2009 were nothing like as bad as doom-mongering merchants were predicting,” said London-based collector and dealer James Butterwick. “The words to describe the market are consolidation, stability and improvement.”