Whenever there’s talk of the shrinking Impressionist & Modern market, the usual explanation is the lack of supply. There aren’t enough works going around to get critical mass in the auctions and estates are few and far between. That logic would suggest all of the great works bought during the last art boom from 2005-2008 had been donated to museums. Obviously, that’s not the case.
If you’ve been paying attention to the London Impressionist and Modern Evening sale catalogues, as Colin Gleadell has, you would have noticed that the top lots from both London evening sales come from the Nahmad family. With their long history of buying—and ability to buy opportunistically during panics—the Nahmads are able to sell at strong profit where others are forced to hold their works for some time to get a return.
So the issue with the Impressionist and Modern market may not be supply of works but the cost basis of those works during the boom which makes them hard to sell at auction. This odd occurrence of the Nahmads having the lead works in both sales brings up another point we’ve made from time to time on this site concerning art funds.
The Nahmads’ vast holdings are, in effect, an art fund. There have been many successful art funds in the world if you consider secondary dealers—many of whom have spread the risk through financial backers—to be art funds. Where the model becomes difficult is when you try to create a fund with horizons dictated by the investors, not the opportunities presented by the market.
As Gleadell points out, the Nahmads—without the demands of investors seeking redemptions or predictable returns—can wait for their moment which appears to be now:
It was once said that the Nahmads propped up this market with their buying when times were tough; now they appear to be propping it up with their selling. It’s not unusual for the salerooms to rummage through the Nahmad stock rooms to boost their auctions. In June 2007, the Nahmads provided Christie’s with a record breaking $41.5 million painting by Monet, Le pont du chemin de fer, Argenteuil, 1904, which they had bought 10 years earlier for $2 million. But I don’t recall a time when they supplied both Sotheby’s and Christie’s with their top lots.
Although neither the family or its businesses are named as the sellers, the works were shown at the Kunsthaus Zurich two years ago as part of the Nahmad collection, and have not changed hands since they were bought at auction prior to that. The Monet was bought below the estimate for £2.8 million during a post-recessionary market plateau in 1996. Recently, the Monet market in general has been very buoyant, but there have not been any great, late Venetian views like this one for sale. Evidently Sotheby’s knows someone who wants such a painting at that price because it comes to auction with a guarantee of a sale from a third party.
Also guaranteed is the Kandinsky at Christie’s – a significant transitional painting made as the artist was feeling his way from figuration to pure abstraction. The Nahmads bought this in the tremors of the last market wobble in November 2008, below estimate for what was probably a bargain for such an historically important artist, at $16.9 million. Their decision to sell has no doubt been influenced by the record $23 million (£14.4 million) set for another Kandinsky painting from the same series last November. With the extent of Russian interest in Kandinsky, a new record could be in the offing.