Art Market Monitor

Global Coverage ~ Unique Analysis

Art Auction Guarantee: Bringing Guarantees to the Primary Market.

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Since it’s inception in 2011, Art Auction Guarantee (based in Los Angeles and London) has been providing traditional third-party guarantees. At the upcoming Art Basel Miami Beach 2012, the company will launch it’s new service, offering guarantees to buyers as opposed to sellers for works in the $10,000 to $500,000 range.

According to AAG’s website, their objectives are to:

 Offer our clients (being private individuals, dealers/ galleries, art funds and/or auction houses) the peace of mind of obtaining a minimum amount agreed upon in advance from the buy/ sell of a piece of art:
  •  Either as a guarantee for a price paid when buying an art piece (either in  auction or privately)
  • Or as an auction guarantee for a piece that a seller will present in auction.

Blouin Artinfo reports on how this service works:

AAG charges clients a fee of 5 to 7.5 percent of a work’s acquisition price in exchange for a guarantee. If a collector decides to sell the guaranteed artwork at auction two or more years after purchasing it and the work fails to sell above its reserve, AAG will buy it back for the same price he or she originally paid. (Inflation, exchange rates, and auction house fees aren’t factored into the total.) If the work sells above the original acquisition price, AAG receives 15 percent of the profit and the collector keeps the rest.

“It’s a competitive rate,” noted Aquizerate. By comparison, most third-party guarantors take at least 50 percent and as much as 80 percent of the upside. To entice dealers to recommend the service to their clients, AAG will be offering them approximately 1.5 percent of its initial fee and a small portion — approximately 5 percent — of the resale profit.

However, skepticism remains regarding the comfort level the company can offer in it’s services.

According to Jeff Rabin, co-founder of art investment firm Artvest Partners.

“I don’t know what they own or the scope of their guarantees. But if all their clients try to cash in at once, they might be forced to go into bankruptcy and liquidate. And if that happens, what happens to all the people they guaranteed?”

Founder of AAG, Arnault Aquizerate, says that he:

is planning to approach investors at the beginning of next year to provide an additional backstop, but “for the time being we have not had the need to invite in our shareholding structure any private investors or investment bank.”

The Art Market Without Tears? A Company Will Guarantee You Can’t Lose, For A Fee. (Blouin Artinfo)

Pia Catton Questions Cohen's Judgment

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Pia Catton comments on the Sotheby’s show of Steven Cohen’s collection on the new Trueslant.com group blog. She’s impressed with the way Cohen name checks Modern masters and contemporary savants like Yuskavage, Sherman and Prince:

The presence of these names clearly makes this a collection built in the last decade: It is an accurate representation of the taste of the reigning art establishment.

As Tobias Meyer, Sotheby’s Worldwide Head of Contemporary Art, put it in a press release: “The Cohen collection of 20th Century art is one of the most significant in the world. It has been assembled with rigor and attention to detail, but there is still the openness to expression. As collectors, they are curious and non-judgmental and totally free in their thinking.”

Clearly, he means “non-judgmental” as a compliment. But isn’t the ability to make judgments the best part of collecting art? The Cohen collection would be more of a personal statement with some evidence of preferences or judgments. What kind of art do the Cohens prefer? All of it!

Steve Cohen and His Non-Judgment Art Collection (Trueslant.com)

Met Book Hype Machine Burps

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Rogue's GalleryWe’re waiting for our copy of Michael Gross’s Rogue’s Gallery to read, we’re going back through Calvin Tompkins’s Merchants and Masterpieces and maybe we’ll look at Thomas Hoving’s  Making the Mummies Dance. Gross isn’t going to sit around waiting for action, so today we’ve got a little Page Six action–with an emphasis on little because the friction described between Hoving and de Montebello is mild indeed–which New York Mag picks up and tries to breathe a little life into but doesn’t add anything. Will Gross reveal all the Met’s secrets? We’ll see.

Met Director Fight! (Culture Vulture/New York Mag)

Met Museum Chiefs at War (Page Six/NY Post)

Madoff Inventory Floods Market

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Dow Jones Newswire‘s Shelly Banjo looks into the glut of Madoff inventory coming on the market. Everything from precious Judaica to Old Master paintings to English art is for sale. Everything but jewelry, the ladies are hanging on to their jewels because they may end up being the only objects left that are worth anything:

“Rare and one-of-a-kind artifacts and antiques are now surfacing that haven’t seen the light of day in generations as the effects of the sinking economy and the Madoff scandal congeal,” says Jonathan Greenstein, chairman of J. Greenstein & Co, an auction house specializing in antique Judaica including rare Jewish ritual objects, books and manuscripts. His company’s auctions typically average 130 items, but in June he will be offering more than 200, including many rare pieces sold “under duress” due to Madoff losses, he says. This is at a time when prices for Judaic art are drastically lower than they were a few years ago, he adds. [ . . . ]

Half of the items in an upcoming estate sale at Palm Beach’s Kofski Antiques are “Madoff inventory,” including oriental rugs, silver and a 50-year old collection of English art, says owner Chris Hill. [ . . . ] “I’m sorry that it’s under these circumstances, but we’re seeing some very attractive pieces for bargain prices – it’s definitely a buyer’s market,” Hill says.

Madoff-Scandal Fallout Props Up Art Market (Wall Street Journal)

Elle Macpherson Has the Right Priorities

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Photo credit: Contactmusic.comDitch the cars. Dial back on the shopping. But don’t give up on art! The former model and owner of a lingerie business is cutting back on luxuries but not on her art collection. Here’s what she told a London site, contactmusic.com:

“I’ve been consumer conscious for a while. I traded in my Range Rover for a Lexus and I either bike or take my Fiat Bambino on the school run. My only extravagance is art. It always has a place in my budget. All the artists I love, Lucian Freud, Jean-Michel Basquiat, Tracey Emin, Richard Prince, I’ve invested in.”

Elle Macpherson Defies Credit Crunch (Contactmusic.com)


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