Katya Kazakina and Philip Boroff did their homework on this week’s evening sales for Bloomberg to sort out the returns on some of the major works. Overall, of the 27 works that had previous public sales, according to Mei Moses, the average annualized return at both Christie’s and Sotheby’s was around 14% for those works that were re-sold.
Public filings for Sotheby’s show that there were $206m in guarantees outstanding in November at the auction house. $152m of that was financed directly by the auction house. Direct guarantees, a practice both houses have sought to avoid in more conservative markets, generally rise in rapidly rising markets. The question is whether the guarantees are a cause or effect of the strong returns?
Kazakina and Boroff show that Lucio Fontana’s record $20.9m sale drove a strong return for the decade it was in the owner’s hands:
“Concetto Spaziale, La Fine di Dio” had changed hands for $1.3 million a decade earlier at Sotheby’s in London. That’s a 32 percent annualized return, better than all but 13 companies in the Standard & Poor’s 500 Index over the same period.
The best return belonged to Christopher Wool’s “One Year No Halloween.” The 2004 abstract painting fetched $602,500 in 2010 at Phillips and $2.1 million at Sotheby’s on Nov. 13 — an annualized return of 51 percent, Moses said.
Let’s add to that question a secondary note about the Steven Cohen works which did not meet the expectations of their guarantee. Is the collector’s provenance a problem or were the works simply too recently on the market (though the ones that lagged were not the pieces most recently on offer.)