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)


Cohen's Motives and Other Questions

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The Telegraph‘s Colin Gleadell asks what Steven Cohen’s motives are in displaying a portion of his art collection at Sotheby’s:

It is the first public glimpse into the largely unknown holdings of a secretive, very rich art lover who has been one of the most potent forces in the art market for a decade. Naturally the show has aroused intense curiosity about how much the works cost, where they had come from, and what Cohen’s motives were for exhibiting them. [ . . . ]

But is the exhibition just a vain attempt to stimulate the market by reliving the art boom in the run-up to the all-important May sales in New York?

Certainly, it is effective PR for both Sotheby’s and Cohen. But, as a show which is as inescapably about money as it is about art, it may fall between two stools. In his scathing Channel 4 programme The Mona Lisa Curse last year, Robert Hughes argued that successive art booms had made it difficult to look at art without thinking about how much it was worth. Now we are officially in a recession, the issue for those who are concerned about such things is to wonder how much less that art might now be worth.

Of course, these are the questions that have pre-occupied many since the exhibit was announced in the New York Times. But one of the central points about Cohen the art collector–hinted at by Gleadell–is his secretive nature. Before Cohen gained a public status as a famous art collector, he was as a famously dark character in the financial markets. Paying top dollar for the world’s best collection of art has put a more benign cast to his name without forcing him to be any more open with publicity or public appearances. If viewers focus on the price of the paintings, they’re missing the value of the whole collection to Cohen.

This is even more pronounced when much of the financial world has been aware of Cohen’s SAC having gone to cash before the Lehman Brothers collapse and the market’s wipeout.

Steven Cohen’s Collection Goes on Show at Sotheby’s (Telegraph)

Madonna: £80m Art Collector

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From the Times of London’s examination of Madonna’s business practices, personal finances and fortune comes this catalogue of her a £80 million art collection:

Her art collection, over 300 paintings including work by Léger, Dali, Man Ray, Damien Hirst and Frida Kahlo, was valued at around £80m last year. She paid $5m for Picasso’s Buste de Femme à la Frange.

Buying paintings she used to call her “sin”, but her collection of modern art has proved to be a shrewd investment. Since 1987, when she paid $1m for Léger’s Les Deux Bicyclettes, she has acquired around 300 pictures [ . . . ] . Christopher estimated that by 2008 his sister’s collection’s value had increased by 600%.

Why Madonna’s Still a Material Girl (Times of London)

Tully: Cohen Gets a D in the Art Market

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The Master, Judd Tully, looks at the Cohen collection on view at Sotheby’s and gives the billionaire hedgie with a pre-eminent reputation for knowing when to buy or sell a low grade on his art market acumen. Scoring the 3 of the 5 works discussed as “Overvalued,” Tully points only to a Matisse bronze and the Munch Madonna as works where Cohen timed the market well.

Does the man with the private museum care? Probably not. For all the talk of how hedge fund buyers were going to transform the art market with their fast money ways, few have been in a hurry to sell. And the overall quality of Cohen’s holdings should mean the works will eventually gain value from having been in his collection (as well as on display at Sotheby’s in this unusual exhibition.)

Should is the most important word in that sentence because Tully doesn’t think wizard of Greenwich has quite made it there: “Even with his billions, Cohen doesn’t have the platinum brand allure of someone like Yves Saint Laurent. Not yet, anyway.”

Steven Cohen’s Women (ArtInfo)–Click on the slide show.

Seeing the Cohen Collection at Sotheby's

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Roberta Maneker went to Sotheby’s this morning to see the press preview of the Cohen Collection. Here’s her report:

A dazzling collection of 20 pictures and sculptures from the much heralded collection of Steven and Alexandra Cohen, he of the hedge fund SAC, will be on view at Sotheby’s from April 2-14. “Women” is a powerhouse display depicting females in wildly varied Photo by Roberta Manekerstyles, poses and media, and is a trove for scholarly analysis.  Comparison is, of course, the name of the game, and it helps to be art historically literate. For those who need a little assist, an essay by scholar-curator Joachim Pissarro discusses the range of works on display, focusing on the dialectics of good/bad, pure/sexual, cool/hot, and the debt so many of these artists owe to the influence of Manet, frequently considered the progenitor of modernism. Pissarro was present at the press walk-through and described Cohen as “probably one of the only collectors I know who spans not one, not two, but three centuries” – true, sort of, if you start at the end of the 19th, with Cohen’s distinguished collection of Impressionists and early Moderns, and end with today’s more challenging works by Yuskavage, Freud, Dumas and the like (one work by each on view here).

The genesis of the exhibition is the by now familiar story of Sotheby’s Tobias Meyer dining at the Cohen home, with Picasso’s Le photo by Roberta ManekerRepos and Warhol’s Turquoise Marilyn both in his direct line of site, giving rise to the suggestion of this one-owner exhibition. Cohen responded enthusiastically, though it is not irrelevant that he owns 5.9% of Sotheby’s stock – a stake making Cohen one of its largest shareholders. When asked directly, Meyer firmly responded, “These works are not for sale.” (“Not now,” thought everyone in the room.)  As to the value of the works on line, Meyer declined to comment; however, Alexandra Peers, in New York Magazine’s daily Vulture blog, says nearly “half a billion dollars.”  Whatever, it is a stunning collection of first-class works which encourage the viewer to see connections, make comparisons, and enjoy the company of some first-class Women.

This is the first exhibition focused entirely on Cohen’s exceptional art. You have thirteen days to get to see this don’t-miss exhibition.

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