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A Tale of the First Auction Guarantee

March 18, 2014 by Marion Maneker

Poussin, Adoration of the Shepherds

In an otherwise pointlessly speculative attempt to connect hedge fund practices with the top end of the art market, a spurious connection that retails the mistaken idea that there is no regulation in the auction market (a falsehood that never seems to die), Tom Flynn offers a story of the first auction guarantee. You’ll have to take Mr. Flynn’s word for whether this is actually the first time a guarantee was offered but the story has the ring of truth to it:

In 1956, Sotheby’s were trying to persuade a retired naval officer to consign Poussin’s Adoration of the Shepherds (above) to its London auction block. The vendor, the Norfolk-based aristocrat Jocelyn Beauchamp, eventually allowed Sotheby’s director Vere Pilkington to take the rolled-up canvas back to London.

Shortly afterwards, Beauchamp was approached by a London dealer who offered him £10,000 cash for the picture (the offer was raised to £15,000 a few days later). Furious at the trade’s attempt to scupper their instructions, Sotheby’s chairman Peter Wilson offered Beauchamp a guaranteed sum. That was the first time a guarantee had ever been offered by an auctioneer to a vendor.

The painting, which had once been in the collection of Sir Joshua Reynolds, was eventually sold for £29,000 to London and New York dealer David Koetser. Guarantees (and more recently so-called ‘irrevocable bids’) are now a fixture of Sotheby’s and Christie’s high-ticket auctions but the precise details of the cake-cutting are never divulged.

tomflynn: Insider trading in the art market: “That’s fun.”.

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