Collector Says Six-Figure Sales Moving Private to Avoid Commissions

There are two good reasons to pay attention to these paragraphs buried within Scott Reyburn’s New Year’s account of the art market. The first is the logical claim that there is a shift taking place in the private market where sellers and buyers are avoiding the commission load of public sales:

Artemundi said it maximized its returns — made during a period of steady, post-crash price rises — by buying and selling through low-fee private transactions, rather than public auctions. Such auctions usually extract double-digit commissions from both buyer and seller for works priced under $1 million.

The second is that one of the important private collectors quoted as evidence of this trend is Howard Rachofsky, the Dallas hedge fund manager who is one of Allan Schwartzman’s most prominent clients. Schwartzman is a principle of Art Agency, Partners, the advisory firm now owned by Sotheby’s:

An increasing number of private collectors are taking a similar approach. “The auction houses have created some huge margins at the midlevel,” said Mr. Rachofsky, the Dallas collector, who last year discreetly sold several six-figure works priced through dealers charging single-digit commissions. “A lot of that trade is going to migrate to the private side.”

Trump and the Art Market: A Feel-Good Factor? (The New York Times)