Art & Finance Newsletter #13 - Back On Track
Apologies for the delay of the previous newsletter. As I had mentioned before, my meeting schedule ballooned while in London.
It was an absolutely fantastic two weeks spent meeting a variety law firms that have developed art law practices and private client service providers whose clients require fine art management services from them. It was great to share my experiences with them and pick up new bits of knowledge from them.
I am excited to put the knowledge I acquired from this trip to practice in China, Hong Kong & Singapore. If you are in the Asia region expect me to be knocking on your door shortly with good stories and fresh ideas.
Also...record sale at Sotheby's in Hong Kong last night. An abstract oil painting by the master Zao Who-Ki hammered at HKD510.4mio (USD65mio). More than 28 times it's purchase price. Good golly.
On to the art market...
Iconic David Hockney Painting To be Auctioned (featured above)
Christie’s in New York announced on Thursday that it was selling Portrait of an Artist (Pool with Two Figures) with an estimate in the region of US$80m. The painting, a star of Hockney’s recent retrospective, is reportedly owned by Joe Lewis, the Bahamas-based billionaire and owner of Tottenham Hotspur Football Club.
Anywhere near the estimate, which is nearly three times the price of the most expensive Hockney sold at auction, would break the record. Jeff Koons holds the title after his stainless steel Balloon Dog (Orange) sold for US$58m in 2013. Next is Gerhard Richter, the most expensive European artist, after Abstraktes Bild (1988) sold in London in 2015 for £30.4m ($46m).
Before its sale in New York in November, the work will be exhibited in Hong Kong on September 28-29, London on October 3-5, and Los Angeles on October 23-27.
Christies - 20th Century Week in NYC, November 2018
Always Due Diligence - Please!
Disgraced dealer Ezra Chowaiki, whose elaborate wire fraud art investment scheme came to light after his gallery, Chowaiki & Co. Fine Art Ltd., filed for bankruptcy last year, was sentenced to 18 months in prison on Thursday. Chowaiki had faced up to 20 years for selling collectors shares of artworks he didn’t own—including pieces by Marc Chagall, Edgar Degas, Pablo Picasso—often charging them far more than the market value of works.
He pleaded guilty to one count of wire fraud in May and agreed to forfeit $16.6 million and 25 artworks; on Wednesday, he was ordered to repay his victims $12.9 million.
“One factor that does loom in this case is the seemingly and largely unregulated nature of the art market,” said U.S. District Judge Jed S. Rakoff, who sentenced Chowaiki. “Here, we have something that by its very nature calls for expertise and can easily be the subject of fraud, yet seems to operate without any meaningful constraints. I think that weighs modestly in favor of a higher sentence.”
Bloomberg - Manhattan Art Dealer Sentenced for Art Fraud
Risks For Collectors & How to Mitigate
(Article from Spring 2018...but a valuable reminder)
Many art insurance claims happen when art is moved. This may include transit between homes, or if an item is sent on loan, to a museum, or even to an auction house. Collectors should consider the following key steps if transporting art, whether a single piece, or an entire collection:
Arrange for specialized transportation – do the research, ask for recommendations and references, and choose a company that specializes in shipping fine art. Oftentimes, special packaging including crates, art handlers, and even couriers may be involved.
Avoid leaving the piece or collection unattended. This is especially important for higher valued items.
If you are lending out artwork, understand how the gallery or museum plans to transport and insure your treasures. Ask your broker to review the loan agreement regarding potential gaps in coverage.
Insist on condition reports. This can assist in understanding how and when damage occurred, particularly if done prior to crating the item, and upon delivery of the item. Unoccupied locations pose greater exposure to damage.
Further risks exist - environmental, theft, human error - but this short list above and actions to mitigate are a great reminder to always err on the side of caution when planning anything and everything in regards to your clients collections.
Private Art Investor - Collectors Top Risks
Fall is officially upon us and the blockbuster auctions are on the horizon (or happening as I type). If any of you made it out to the Sotheby's auction last night I hope you enjoyed watching history occur in front of your eyes.
For those of you contemplating client engagement opportunities here is a quick schedule of upcoming auctions that could serve as an excellent and unique manner in which to engage with your clients. Why not have an evening of champagne and watching artworks sell...sounds like fun to me.
Christies
London, 4 Oct. - Post-war & Contemporary Evening Sale
London, 5 Oct. - Post-war & Contemporary Day Sale
NYC, 30 Oct. - Old Masters Sale
NYC, 11 Nov. - Impressionist & Modern Evening Sale
NYC, 12 Nov. - Impressionist & Modern Day Sale
NYC, 15 Nov. - Post-war & Contemporary Evening Sale
NYC, 16 Nov. - Post-war & Contemporary Day Sale
Sotheby's
London, 5 Oct. - Contemporary Art Evening Sale
London, 6 Oct. - Contemporary Art Day Sale
London, 7 Nov. - Important Chinese Art Sale
NYC, 12 Nov. - Impressionist & Modern Evening Sale
NYC, 13 Nov. - Impressionist & Modern Day Sale
NYC, 14 Nov. - Contemporary Art Evening Sale
NYC, 15 Nov. - Contemporary Art Day Sale
This is a short list of auctions and there are art fairs occurring this week and in the oncoming months. We'll touch on those in the next newsletter.
Always...tell your colleagues and associates about this newsletter!
Until next time,
Blake