Tuesday, August 19, 2014

Don’t have a heart attack: ‘flipping’ is nothing to be afraid of

Jeff Koons, Hanging Heart
So why are dealers so careful about who they sell to?

The New York Times has just run a piece about the so-called ‘flipping’ of works of art that is apparently rife in the over-heated art market.

“Flipping” describes how those with a speculative instinct (you know, bankers, hedge-fund managers) like to buy works of art and then “flip” them at auction a short while later for a profit. Media reports would have us believe that the practice is growing, increasing in pace, and having a deleterious effect on the art market. 

However, new research commissioned by the New York Times suggests that it is not as commonplace as some people assume:

… the pace last year was only slightly faster than it was in the mid-1990s, signaling that the reselling may be just the latest iteration of a historical cycle, not a lasting change,” says the report.

Here, then, is another example of how many of today’s art market commentators read current trends as troubling innovations when in fact they may be part of a longer historical process. As Charlotte Gould and Sophie Mesplède recently phrased it with reference to the UK art market:
“Many of the commercial strategies adopted in the British art world which today tend to surprise, if not outrage, actually stem from a specific national history in which the role of commerce has both attached stigma to local creativity by hindering some practices, and encouraged the development of marketing innovations.”
One of the most frequently-cited instances of flipping was the acquisition in 2005 by billionaire financier Adam Lindemann of Jeff Koons’s Hanging Heart sculpture (above left) from über-dealer Larry Gagosian for $4 million before selling it at a Sotheby’s auction two years later for $23 million. A furious Gagosian bought it back at the auction.

In his influential book Talking Prices, on the pricing of contemporary art, sociologist Olav Velthuis revealed why some art dealers are cautious about who they sell to. One or two of the dealers Velthuis interviewed made it clear that if a collector buys a work from them and then ‘flips’ it at auction, he or she would never be allowed back into the gallery.

So did Gagosian ban Lindemann from his gallery?

Now Gallerist magazine has run a piece by Daniel Grant about how rising prices in the art market are putting pressure on dealers to bid up works by the artists they represent. Grant suggests that some of this pressure comes from the artists themselves, many of whom expect their gallerists to engage in these practices in order to protect their market.

Grant quotes John Cheim, of Manhattan gallery Cheim & Read, who says: “We are in conversation with our living artists about work that arrives at auction, and we attempt first to place works in collections that are not speculative.” For “speculative” read “likely to flip.”

The New York Times report concludes that, “Flipping remains very much the exception, not the rule,” but whoever said it was the rule? After all, how many people have the sort of capital required to make it a truly profitable activity? Nor does it have to be the dominant practice to be potentially damaging to an artist’s career. Even the occasional “exception” could reap untold harm, as Sandro Chia and Sean Scully will testify.

Whether it occurs frequently or infrequently, it seems clear that flipping is frowned upon by dealers, many of whom view it as potentially damaging to their artists’ equity profiles. It also suggests a culture clash between those with the artist’s welfare in mind (dealers) and those out to feather their own nests at whatever cost to others (speculators). That said, we tend only to hear of the works that have risen in value between acquisition and disposal, not those that were bought and then flipped at a loss.

The essential unpredictability of the auction mechanism (the increasingly common guarantee and irrevocable bid arrangements notwithstanding) also explains why many dealers are keen to “bid up” their artists’ works when they appear under the hammer. It makes sound commercial sense, however unethical it may seem to the uninitiated.

One of the mottoes of Paul Durand-Ruel (1831-1922), the great French dealer and champion of the Impressionists, was to “protect and defend the art above all else.” To that end, he recommended attending auctions to ensure that works by his artists did not sell too cheaply — “To keep prices up, you must never be in a hurry to sell,” he wrote, “and be ready to bid at sales for works by your artists.”

So how reliable or authoritative is the New York Times report?  It was compiled by two agencies, Tutela Capital and Beautiful Asset Advisors. Their methodologies were then audited by two independent experts, Stephen T. Ziliak, professor of economics at Roosevelt University, and Alan F. Karr, director of the National Institute of Statistical Sciences and a professor of statistics and biostatistics at the University of North Carolina, Chapel Hill. “Both experts found the methods sound,” says the New York Times.
But aren’t Tutela Capital and Beautiful Asset Advisors both embedded in the very investment culture they are supposedly helping to investigate?
Brussels-based Tutela boast an ability to deliver “a complete range of consulting services to institutional clients,” while aiming to “set the industry standard to provide art and finance solutions.” Fabian Bocart of Tutela Capital told the New York Times that reports of flipping are a form of scaremongering.
“They see bankers and hedge-fund managers coming into the market, and they have a preconceived idea of what they will do. But they’re not the rogues or vultures they imagine.” As a provider of art and finance solutions to billionaire bankers and hedge-fund managers he would say that, wouldn’t he?
Beautiful Asset Advisors, meanwhile, make it clear on their website that they openly ignore art’s aesthetic, symbolic and social values in favour of a focus on its investment potential. Are they not thereby endorsing the carnivorous instincts that underpin the flipping tendency, however occasional, slow-paced, or exceptional it may be?
For all their analytical ability and consultancy expertise, neither of these companies is truly impartial or objective. It’s a classic art market conundrum.

Saturday, August 9, 2014

“Radcliffe ruins everything.” Art Loss Register chairman under scrutiny for passing money to Balkan gangsters

The Times Magazine's exposé of the
Art Loss Register's 'Serbian Strategy' (08.08.2014)
It is perfectly understandable that victims of art theft will want to be reunited with their possessions. Law enforcement agencies and experienced former FBI and Scotland Yard art detectives devote much of their time to that very endeavour, occasionally having to interact with darker elements in the realm of organised crime in order to do so.

It has long been an article of understanding in the art world that while monies occasionally need to change hands in order to access information that might lead to the recovery of stolen works of art, the thieves themselves must not be paid. To do so is effectively to encourage more art crime. 

So, what of the Art Loss Register’s fee-chasing involvement in these activities? 

London-based The Times Magazine (left) has today published an exposé of the methods employed by The Art Loss Register (ALR) in plying its trade. One wonders how many more damaging news reports must appear before this organisation loses the last vestiges of its already tattered credibility.

The Times article reveals how the ALR’s chairman, Julian Radcliffe, paid money to shady figures from the Serbian underworld in order to discover the whereabouts of stolen works of art. You will need to read between the lines to decide just how many ethical lines were crossed in doing so. 

In time-honoured British media fashion, Radcliffe is presented in the Times piece as a “raffish figure,” an “Old Etonian” with “caddish charm”, occupying a romantically shabby office in London, and coming across “a little like something from a Graham Greene novel.” 

These groaning journalistic clichés hide the more unpalatable aspects of the whole ALR operation, which the Times proceeds to elucidate. Its methods continue to alarm European law enforcement agencies and respected insurance companies, amongst others. The auction houses, meanwhile, maintain a sphinx-like silence, perhaps embarrassed by association. 

Yet no matter how many criticisms are levelled at the ALR (a recent New York Times article  threw light on the self-confessed “lying” and “bounty-hunting” that are part of the ALR’s modus operandi), Julian Radcliffe parries every thrust with Establishment insouciance. 

Thus when Thomas Erhardy, head of the Parisian police force’s anti-bandit task force (BRB), says, “Radcliffe ruins everything,” the Old Etonian charmer counters with: “for very good political reasons he [Erhardy] has got to be critical of us in public.” Similarly, when a representative of Catlin Insurance denies knowing that the ALR had given Serbian criminals half of the €60,000 fees and expenses that Catlin had paid the ALR, Radcliffe responds: “Catlin have got to take that public position.” 

This kind of unseemly spat does nothing for Catlin’s reputation. Nor does it say much for Christie’s, Sotheby’s, Bonhams, and numerous other auction houses, who continue to retain the services of the ALR to conduct Due Diligence checks on their auction catalogues to ensure they do not inadvertently handle stolen goods. 

The ALR’s subterranean connections with Serbian gangsters do not look good for the international auction houses. The stench of organised crime has the capacity to overpower the perfume of corporate social responsibility. 

In the absence of a credible alternative, and despite toxic coverage in the New York Times, The Times of London, and across the social network, the major auction houses’ continue to retain the ALR. 

The Times reporter obligingly trotted out the ALR’s boilerplate PR line — that the company earns “hundreds of thousands of pounds a year tracking down and recovering stolen art.” 

However, later in the piece one source close to the ALR offers a corrective to that rosy revenue profile, pointing out that the company “is in an absolute financial mess,” and that it is only Radcliffe’s own cash infusions that are keeping it from insolvency. 

As the New York Times piece reported, the ALR has lost money for the last six years. Radcliffe continues to swat away references to his organisation’s catastrophic financials, insisting that it will ultimately break even and get to profit. Meanwhile, many key staff have left, unhappy with the impenetrable sfumato of the ALR's “Serbian strategy,” to say nothing of its egregious conduct in the Michael Marks and Norman Rockwell Russian Schoolroom cases, to name just a couple of recent examples.

What future for the concept of ‘professional practice’ so enthusiastically championed by the art trade associations while these questionable business approaches are tacitly supported by the auction houses and insurance companies? 

More Artknows coverage of the ALR:

Monday, June 16, 2014

US sculptor wins $450,000 copyright damages against billionaire property developer

Russian billionaire property developer Igor Olenicoff:
guilty of copyright infringement
Back in August 2011, I revealed how Igor Olenicoff, 71, a Russian billionaire property developer (left), had commissioned unauthorised copies of original sculptures by the California-based artist Don Wakefield and had displayed them in the grounds of his corporate buildings in Newport Beach and elsewhere. 

Olenicoff, a convicted tax felon said to be worth around $2.4 billion (Forbes), was later discovered to have commissioned the copies from a Chinese stone-carver in Beijing. 

Wakefield’s approaches to Olenicoff for an explanation as to why his work had been copied without his permission were snubbed.

My subsequent report of the case for The Art Newspaper was spotted by US lawyer Gene J. Brockland of St. Louis, Missouri law firm Herzog Crebs, who offered, pro bono, to represent Wakefield in a copyright suit against Olenicoff and his company Olen Properties Corp. (see my Artknows report here).

Last week, Wakefield (right) won his copyright suit against Olenicoff on all counts, the court awarding him $450,000 in damages.

Percent for Art
One aspect of the case that has not yet been fully explored is whether Olenicoff was in some way in breach of his obligations under the Percent for Art Scheme, which requires developers of new buildings to devote 1 percent of the overall construction budget towards public art to be displayed in the grounds. 

As part of my original investigation into the Olenicoff case I discovered a number of Bejing stone-carving companies who were prepared to copy sculptures based on images provided to them without asking whether I had good title to the original works in question. Nor did they inquire as to who created the works. Moreover, where a unique, original work by Wakefield would have cost around $35,000 to make at that time (or closer to $100,000 today) and retailed at $150,000, the Chinese stone-carvers were willing to produce them for between $900-$1,500 apiece. Whether this enabled Olenicoff to save on his Percent for Art obligations has never been fully clarified. 

However, as The Art Newspaper has just reported, the Percent for Art scheme has been subject to widespread neglect in many US cities, which has sometimes allowed property developers to ignore the scheme altogether. “Cities including Los Angeles, Buffalo and Pittsburgh have either failed to set aside money for the initiative or have tied up the proceeds in red tape,” according to The Art Newspaper.

When I approached the relevant Percent for Art authority in the City of Brea, California over the Olenicoff case, it appeared that the full information necessary to satisfy the ordinance had never been forthcoming. 

One of the unauthorised copies
of Wakefield's works 
One of the Percent for Art requirements states: “The Artist represents and warrants that … the Sculpture is unique and original … and does not infringe upon any copyright or other intellectual property right.” (City of Brea, Art in Public Places Policy Manual, 2012). (For a full account of this case, see my chapter - ‘Negotiating authenticity: contrasting value systems and associated risk in the global art market’ in Dempster, A. (Ed.) Risk and Uncertainty in the Art World (Bloomsbury, 2014, pp109-124.) 

As I also reported in The Art Newspaper, Wakefield was not the only artist whose moral rights were abused by Olenicoff. Another American sculptor, John Raimondi, also fell victim to Olenicoff’s scheme. His case will be heard from June 24.

If anything, Raimondi's complaint is even more compelling than Wakefield’s. Some years before we revealed the Olenicoff/Beijing scam, Raimondi had approached Olen Properties Corp. to discuss making work for them, but at some point Olenicoff fell silent on it. 

According to court documents outlining Raimondi’s complaint: 
“The sculptures were to be custom-made for the defendants, as they were not in Raimondi's inventory. The defendants represented to Raimondi that they were interested in purchasing his art in order to comply with city ordinance(s) requiring developers to spend a certain percentage of money on public art; in this instance between $100,000 and $250,000.”
Olenicoff had apparently "requested photographs showing multiple views of the sculptures.”  However, 
“…approximately ten days after the second meeting, Olenicoff refused to speak with Raimondi. Defendants instead had an assistant relay to Raimondi that Olenicoff had a change of heart about the sculptures. Instead of purchasing the sculptures from Raimondi, defendants, at their direction, had multiple unauthorized and infringing copies of the sculptures manufactured in China.”

As has been widely reported, Olenicoff is also a convicted tax felon. In 2007 he pleaded guilty to syphoning more than $350 million into European bank accounts before a UBS employee, Bradley Birkenfeld, blew the whistle. Olenicoff was ordered to pay $52 million in back taxes and was sentenced to two years probation and 120 hours of community service. 

As my chapter in the Risk and Uncertainty book (right) points out, the still rapidly globalising art world continues to throw down fresh challenges to market participants. Risk is not merely something to be assessed and quantified by wealth managers and investment advisers. Artists too must remain vigilant, particularly since our concepts of originality and authenticity are not shared across cultures. 

Thankfully there are still a few lawyers willing to fight the oligarchs and the billionaires who would otherwise ride roughshod over artists' moral rights.  

Friday, April 25, 2014

Spot the head-spinning irony as Science exposes fake Hirsts

Fake Damien Hirst paintings Fake Hirst spin painting
(image courtesy Manhattan District Attorney's Office)
The outcome of a recent court case in New York suggests that one way of establishing the authenticity of Damien Hirst spin or spot paintings — all of which were made by studio assistants — is the absence of any indication that the work was made by a specific studio assistant. Stop sniggering, this is serious stuff.

A Florida pastor was recently convicted in a Manhattan court of selling fake Hirst paintings. After the case, one of the jurors spoke on condition of anonymity to the Brooklyn-based art blog Hyperallergic

The juror reports that one of the fake paintings produced in evidence at the trial, “had something on it that certified that the work was made by someone in the studio.” This was clearly added by the faker in the (misguided) belief that it would indicate authenticity.

It’s perhaps not surprising that a faker might seek to insert something into a painting that would signal its author. After all, works of art have traditionally been signed by the artist who painted them or from whose studio they originated. Not all of Hirst’s works are signed, and nor do they come to market with the kind of “authentication letter” that apparently accompanied the fake works in the New York case.

And yet despite the absence of these traditional indicators of authenticity (after all, who is the real ‘author’ of an original Hirst spin or spot painting?) it is still possible to establish through size, canvas quality, etc., whether or not a work is a ‘genuine’ Hirst. The aptly named Science Ltd. — Hirst’s production company — are responsible for this quasi-scientific authentication process, but even they must be struggling to manage the imbroglio that his opportunistic modus operandi has created. 

Although no single assistant is ever credited with any particular work issuing from Hirst’s studio, he has said of one of his assistants, Rachel Howard, “She's brilliant. Absolutely fucking brilliant. The best spot painting you can have by me is one painted by Rachel.” (Burn, G., On the Way to Work, Faber, 2001) Very funny, given that definitively establishing which works Rachel Howard painted would be nigh on impossible.  

Howard is now a successful painter in her own right. As a Quaker-educated child she is said to have pondered the deep existential question: ‘If God made me, then who made God?’. Only a cynic would reply with the name Frank Dunphy for Howard’s own work testifies to a far more aesthetically curious and emotionally engaged approach to the possibilities of painting than the mind-numbingly banal merchandise that issued from the Hirst factory. 

Another assistant, on leaving Hirst’s employ, asked him for one of his paintings as a souvenir of her time with him. According to Hirst, he told her, “‘Make one of your own.’ And she said, ‘No, I want one of yours.’ But the only difference, between one painted by her and one of mine, is the money.’” (Burn, ibid

Fake Hirst spin painting
(image courtesy Manhattan District Attorney's Office)
We can assume from this exchange that Hirst correctly interpreted the assistant’s request as a request for money. After all, why else would she want the art when it’s something anyone could make? 

The factory set-up isn't the only reason authenticity is a problematic issue for Hirst Inc. It’s common knowledge that Damien likes breaking the art market rules, slaughtering sacred cows, and generally changing the terms of engagement. After his spot print editions flew off the walls of their original retailer, Eyestorm.com, he was said to have been considering producing a new work in an edition of a million. Classic Hirst hubris or maverick instinct for marketing? It matters little, for he never proceeded with the idea, perhaps advised against it by Frank Dunphy, his business manager and the real architect of his apotheosis from art world enfant terrible to global luxury brand. 

The prospect of having to sign so many prints might have been another factor in dissuading him from going ahead with the million print edition. Hirst found signing his Eyestorm spot prints so onerous that in order to break the tedium he occasionally signed other names instead of his own. I recall seeing ‘Mickey Mouse’ and ‘David Hockney’ scrawled on the border of two spot prints in the Eyestorm warehouse.

What those jokily signed works are worth today will remain an imponderable until one of them comes to market. Even then, who could authenticate it? Will connoisseurship do the trick? Or will Science once again prevail?

Wednesday, April 2, 2014

Oxford seminar calls for more rigorous standards in technical art history

Professor Mark Pollard of the University of Oxford
 chairs the closing session at the research seminar  
We are just a few weeks away from a three-day international meeting in The Hague that seeks to address the highly topical issue of ‘Authentication in Art’.  To attend, you will need to fork out a swingeing €700 attendance fee, plus accommodation and expenses, all of which is likely to exclude a fair few interested commentators, myself included. 

So it was particularly constructive that Nicholas Eastaugh and Jilleen Nadolny of London-based Art Access & Research, the leading specialists in art materials analysis, organised a free, one-day symposium at Trinity College Oxford to explore some of the core issues facing this emerging discipline. Yesterday’s event was also used to informally announce the imminent launch of Dr Konstantin Akinsha's Russian Avant-Garde Research Project (RARP), an explicit acknowledgment that Russian modernist art remains particularly susceptible to fakes and forgeries. 

The 30 delegates at Oxford were drawn from a range of scientific and art historical disciplines, reflecting the extent to which this burgeoning research area requires a blend of analytical and interpretative methodologies embracing art history, pigment and materials studies, connoisseurship, analytical chemistry, database technology, and so on. 

It will be interesting to see whether The Hague meeting succeeds in progressing any of the ideas and aspirations discussed at the Oxford seminar, most of which centred around the need for more rigorous professional standards and protocols. With the art market booming again, and fakes proliferating, it now seems clear that charlatanism is not confined to the faking of paintings and the forging of provenance documentation. It also extends to a new breed of self-appointed and ethically compromised ‘forensic scientists’ willing to issue certificates of authenticity for inauthentic works in return for financial kickbacks. 

There are essentially two aspects to what is now commonly termed ‘technical art history’ (the fuzzy issue of nomenclature was another underlying theme of the seminar) — academic analysis of works of art and market-commissioned analysis. However, it is not widely known that the leading practitioners of the latter also take a disinterested approach to what they do. 

Research and analysis conducted by Eastaugh and Nadolny at Art Access & Research is entirely disconnected from any market outcome and their fees are in no way dependent on the real or notional value of the works they investigate. That approach represents the industry benchmark for best practice. However, there are still too many market participants seeking the services of the art market equivalent of snake oil salesmen to endorse and authenticate questionable pictures. The distinction between academic and commercial motives has become a leitmotif of art forensics. 

Boris Kustodiev's Odalisque, ...or is it?
What can the industry do to combat ethically negotiable practitioners? That is yet to be decided. As the symposium heard, conventional courts of law are ill-qualified to pronounce on art market matters and too often their judgements are flawed, as the recent case of the Kustodiev canvas at Christie’s (right) suggests.  

The art market is often described as “the last unregulated market,” but not everyone agrees with that assessment. My recent blog entry (here), which hinted at a putative correspondence between the activities of hedge funds in the financial markets and opportunities for insider trading at the top of the art market, was dismissed by Art Market Monitor as “a spurious connection that retails the mistaken idea that there is no regulation in the auction market (a falsehood that never seems to die).” 

In my piece I quoted New York Magazine writer Andrew Rice who recently wrote: 

“It’s an opaque market, where secret side deals, price manipulation, kickbacks, and collusion are an everyday facet of business. It rewards inside information, and since the market is largely unregulated, players can trade on it without any fear of legal consequences.”

Certain aspects of the art market are indeed regulated, as Art Market Monitor maintains; the conventional rule of law pertains as much in the art world as it does in any other sphere. Money-laundering and other fraudulent practices are generally dealt with severely (forgery seems to be an exception, inviting short sentences in open prisons, and celebrity media contracts on release). The processes of self-regulation work…but only to a degree. Opportunities to exploit the informal nature of the art trade are abundant and potentially destabilising, as the recent Beltracchi, Knoedler, and Subhash Kapoor cases amply demonstrate. 

During the Oxford seminar's closing discussion, Dr Anna Dempster of Sotheby’s Institute called for a more nuanced understanding of the balance to be struck between market transparency and the confidentiality that most art professionals see as essential to a healthy trade. Summarising, Nicholas Eastaugh called for a professional code of practice in art authentication, preferably one ratified by the main professional bodies and leading market participants. It was agreed that a starting point would be a consensus on minimum standards.

Questions that might re-emerge at the forthcoming Hague conference include: how to promote creative collaboration between art historians and their ‘technical’ counterparts; how to get the technical laboratories to work productively together; and how to expose those unqualified practitioners with unacceptably close ties to market outcomes. 

One thing seems certain — “Connoisseurship down the microscope,” so to speak, is here to stay.

Tuesday, March 25, 2014

Risk and Uncertainty in the Art World

Risk and Uncertainty in the Art World is a timely new publication from Bloomsbury edited by Anna M. Dempster of Sotheby's Institute.

The volume contains essays by Anna Dempster, Tom Flynn, Tom Christopherson, Anders Petterson, Olav Velthuis, Neil De Marchi & Hans J. Van Miegroet, Marina Bianchi, Rachel A.J. Pownall, Steve Satchell & Nandini Srivastava, Elroy Dimson & Christophe Spaenjers, Laurent Noël, and Arjo Klamer.

Amazon link here.

Saturday, March 15, 2014

Insider trading in the art market: "That's fun."

Steve Cohen (left), the US hedge fund manager, über-collector and owner of Damien Hirst's pickled shark, is renaming his SAC Capital Advisors hedge fund. In future the company will be called 'Point72', referring to the firm's long-standing headquarters at 72 Cummings Point Road, in Stamford, Connecticut. However, as the Wall Street Journal has noted, "The switch is part of an effort by Mr Cohen to distance himself and the firm from their connection to the biggest insider-trading investigation in Wall Street history."

But now take a look at the world of blue-chip fine art auctions (a realm in which Mr Cohen is a major player) and focus on the efforts by another New York-based vulture capitalist — Daniel Loeb — to force Sotheby's into generating greater shareholder value.

Loeb has noticed the extraordinary spikes in value for certain contemporary artists and believes Sotheby's could be doing more to challenge Christie's performance in that sector.

So what's the difference between the insider-trading activities that hedge funds practice in the conventional financial markets and the mechanisms currently pumping the top end of the art market to ever higher prices? We will never know to any precise degree, because one thing hedge fund  collectors like Daniel Loeb are NOT calling for is greater transparency in the art market. What he and the other Masters of the Universe want is to control the art world in the way that they control global finance and government.

The way to achieve that is to capitalise on the art market's lack of regulation. As New York Magazine put it:
"...the hedge-fund guys tend to treat artists like growth stocks, preferring those not yet judged by posterity, because that’s where there’s room for major price appreciation.  [...] The rewards can be enormous for those who have an edge. It’s an opaque market, where secret side deals, price manipulation, kickbacks, and collusion are an everyday facet of business. It rewards inside information, and since the market is largely unregulated, players can trade on it without any fear of legal consequences. That’s fun."
This is the surely a credible explanation for the unprecedented rise in prices at the top of the art market. If it is true that hedge fund collectors operate in the art market in the manner that they operate in the stock market — then we need to adjust our sense of what prices mean in the art market today.

They no longer reflect aesthetic appreciation, but instead are a function of the financial muscle that can be brought to bear on an artist's output. It's a self-fulfilling cycle. Pity the poor artist who assumes a connection between price and the quality of her work. It is nothing of the sort; more often it is a case of "taking positions, using leverage, and weighing risk and reward more aggressively," as one art world insider interpreted Daniel Loeb's plan for holding Sotheby's feet to the fire.

Seeking the source of the now prevalent culture of unashamed speculation, most commentators point to the famous Robert and Ethel Scull sale held at Sotheby's in New York in 1973. It was at that sale that the artist Robert Rauschenberg took exception to what he saw as the exploitation of his creativity by Scull's speculative approach to contemporary art.

Poussin Adoration, London National Gallery
I'd go back further than 1973. In 1956, Sotheby's were trying to persuade a retired naval officer to consign Poussin's Adoration of the Shepherds (right) 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. Sotheby's chairman Bill Ruprecht told me in an interview in 2000: "I have never lost money on a principal position." In 2008, they lost $80 million on guaranteed transactions.

It was the aggressive marketing tactics of Peter Wilson in the 1950s and early 1960s that dragged Sotheby's kicking and screaming into the modern world to finally challenge Christie's. Today, such is the power of Wall Street and the financial markets that the pressure for auctioneers to compete ever more aggressively comes not from within for reasons to do with art and the cultures of collecting. Instead it comes from hedge fund manipulators like Cohen and Loeb who are fixated on shareholder value and maximising their own opportunities for ever greater wealth generation.

If the art market is eventually forced to succumb to external regulation, it will be because the hedge funds have been permitted to do to the art market what they did to the mortgage markets that eventually brought on the global economic crisis.

Meanwhile, what is the impact on art and artists?

Tuesday, March 4, 2014

London Old Master dealers Agnew's to continue under new ownership

Agnew’s, the long-established international fine art dealers, which closed its Albemarle Street gallery to the public last year, has been acquired by new owners and will continue trading under the direction of Anthony Crichton-Stuart, former head of Christie’s Old Master Paintings department in New York and subsequently a director of Noortman Master Paintings. 

The new ownership will not end the Agnew family's connection with the business, however. Julian Agnew, the sixth generation to work for the family firm, and Christopher Kingzett, a former director (shown seated extreme left), will remain as part-time consultants. 

Julian Agnew commented: “I am delighted by the successful sale of the company, and that Agnew’s can now look forward to celebrating its 200-year anniversary in 2017”.

Lord Snowden's 1965 photograph of Agnew's directors (above) shows (left to right): Richard Kingzett, Colin Agnew, Hugh Agnew, Geoffrey Agnew, Evelyn Joll. It reveals the extent to which the business endured as a tightly-knit family unit. (The two non-Agnew directors, Kingzett and Joll, both married into the Agnew clan). 

The firm was founded in Manchester in 1817, opening a branch in London in 1860, and has a proud history with some of the most discerning private collectors and museums amongst its international clientele.  These have included collectors such as the 1st Lord Iveagh and the Rothschild and Pierpont Morgan families and, in more recent years, Paul Mellon, Baron Thyssen-Bornemisza and the great Norton Simon.  

It has made sales to the national galleries in London, Edinburgh and Washington and, amongst many other American museums, the Metropolitan and the Getty, as well as the leading public collections of continental Europe, Australia and Japan.  From its beginnings the firm rapidly became a leader in the field of British paintings and watercolours, contributing in a major way to the growth of the market for contemporary British art in the nineteenth century.  

From the 1870s until the present day, it has been known internationally for handling the works of major artists including Giotto, Raphael, Gentile da Fabriano, Fra Angelico and Sassetta from Italy , northern painters Dürer, Rembrandt, Rubens and Van Dyck, Spanish masters including El Greco, Velázquez and Murillo, and from France, Poussin, Claude, Boucher and Fragonard. British art has always been a speciality with Reynolds, Gainsborough, Constable and, above all, Turner strongly represented.  In 1895 William Agnew was created a baronet and in 1973 Geoffrey Agnew received a knighthood for services to the arts.

Anthony Crichton-Stuart

The new owners, led by Boston collector and investor Cliff Schorer, have purchased the holding company of Thos. Agnew & Sons Ltd. from members of the Agnew family.  The purchase includes the stock of works of art, an important library, and an extensive photographic archive. It will be interesting to see whether the new owners will see fit to digitise the archive.

Anthony Crichton-Stuart (right) said:  “The Agnew’s name is strong and well respected and we aim to build upon this legacy. We are confident that the company’s historic reputation for connoisseurship and fair dealing will remain one of its greatest assets and that this, combined with the dynamic and progressive approach of our new team, will secure the future of the firm well into the twenty-first century. Agnew’s will continue to acquire and present great works of art to museums and private collectors, whilst maintaining relationships with the company’s many existing clients as well as attracting a new clientele.  We are currently looking for appropriate premises for the gallery but in the meantime we are operating from 13 Old Bond Street, London.”

Following reports that the Albemarle Street gallery was to close and the board was considering winding down the business, the new owners approached Agnew’s at TEFAF, Maastricht, last year.  The board continued the business while negotiations took place, and these were successfully concluded in late 2013.  

Tuesday, February 25, 2014

Art forger Wolfgang Beltracchi: the hagiography begins

"He didn't send anyone to a soup kitchen, he didn't foreclose anyone's mortgage..." —CBS broadcaster Bob Simon

Below is an extract from 'The Con Artist', an edition of the CBS programme '60 Minutes', which aired on February 23rd, in which host Bob Simon interviews German art criminal Wolfgang Beltracchi. Simon alights on a truism of high-ticket art forgery, namely that the victims are invariably very wealthy individuals rather than those at the lower end of the income scale.

There may be a delicious irony in that some of the rich individuals responsible for immiserating countless thousands of low-paid workers during the credit crunch are the main victims of egregious art forgers like Beltracchi.

True, he may not have sent anyone to a soup kitchen or foreclosed anyone's mortgage, but his is not a victimless crime.   

Tuesday, January 14, 2014

All that is solid melts into air: Christie's New Bond Street gallery sold

Party time at the now vacated Mayor Gallery in Cork Street
Just before Christmas, the venerable Mayor Gallery, one of London's oldest modern art galleries, threw a shindig to mourn its imminent departure from the Cork Street premises it has occupied since the 1930s (left).

New York party animal, bon viveur and art market commentator Anthony Haden-Guest was among those holding court, reciting his "folk-noir" verse about the global art world to a rag-tag crowd of revellers bent on necking as much booze as possible. "All that is solid melts into air," shouted the beleaguered poet, before adding: "That's a phrase from Karl Marx, by the way." Bohemia ain't what it used to be.

The most high-profile victim of ever-encroaching property developers, the Mayor Gallery has now moved to a first floor space a few doors up the street. Along with The Redfern Gallery and Browse and Darby, the Mayor helped give Cork Street an ambience that became the envy of the international art world. More galleries will probably follow, doubtless making way for the up-market rag trade that in recent years has colonised most of New Bond Street just around the corner. Ironically the rag trade — and women of negotiable virtue — were the earliest occupants of Cork Street, so there is a certain glum symmetry to these developments.

The most recent evidence of the accelerating demographic changes affecting this part of town was the announcement of the sale earlier this month of the building that is let on a long lease to Christie's at 103 New Bond Street. The sale to Far Eastern investors — for "just over £30 million"— comes just a couple of years after the Grade II listed premises were made over to house Christie's primary-market  dealing business. 

Christie's and Bonhams cheek by jowl
in New Bond Street
Located next door but one to Bonhams' recently refurbished premises (right), the 9,500 sq ft gallery is the former home of the Haunch of Venison contemporary art gallery that Christie's acquired in 2007. Christie's new New Bond Street primary business was launched barely a month ago with the incompetently hung 'When Britain Went Pop!' exhibition.

That show — which comprised an impressive number of seminal works of British Pop Art — was selected largely from the vast Pop inventory of Leslie Waddington, another long-standing Cork Street dweller. Only this month, Georgina Adam, The Art Newspaper's esteemed editor-at-large, opined: "I expect the tensions in the dealer versus auction-house scenario to worsen [in 2014]". The recent Waddington-Custot/Christie's love-in would suggest otherwise.

Announcing the sale of Christie's premises, the Estates Gazette reported that the New Bond Street premises "generates rental income of £600,000 pa," but that the new Crossrail, arriving in Bond Street in 2018, "is expected to spark significant rent hikes from reviews in 2015 and 2020." 

That will surely mean even tougher times ahead for those remaining art galleries struggling to survive in this part of town. Perhaps the real tension in 2014 — or at any rate in Bond Street and environs — will be between the art trade and the high end luxury brands that now dominate the area.

All this provides more evidence of why the art trade is now moving steadily from bricks to clicks.