Art & Finance Newsletter #2
Hello, Blake here -
A big welcome to those that asked to joined the newsletter this past week!
Last Thursday evening I had the opportunity to attend a closed dinner with about 100 private client service professionals held at the Mandarin Oriental in Hong Kong.
I spoke with trustees, lawyers and private bankers from major firms that have operations in Asia and asked what they are experiencing with their clients in regards to art. Simple question...
The feedback I received was all along the lines of - "My clients continuously bring up questions about art and I don't know how to answer."
Needless to say there was a lot information to cover at that dinner.
On to the art market...
Equity markets are volatile - time to buy art!
Interesting to note that one dealer interviewed states that since the market peaked in January he has been selling more art to hedge funds and qualified investor type individuals.
What type of artworks are moving in this volatile environment: Modernist & Post-war/Contemporary paintings with prices between USD 3mil - USD 5mil.
Time to realize gains or time to get into the market?
Bloomberg - Stock Market Volatility & the Art Market
What is an 'irrevocable bid'?
Amedeo Modigliani's 'Nu couché (sur le côté gauche)' is on view at Sotheby's Hong Kong this week and will be up for bidding at the spring New York sale with an estimated price of USD 150 mil. and backed by an irrevocable bid.
Put another way...an undisclosed individual or group put up an undisclosed amount of money to purchase the work should the painting fail to sell at auction OR will make an undisclosed amount of money for holding the risk with/for Sotheby's should the work successfully sell at auction. This undisclosed individual or group can bid up the price during the auction.
In simple terms, that is a 'irrevocable bid'. Crazy right...
Go see the painting at Sotheby's Hong Kong if you are in town...a piece of history in the making.
Bloomberg - 150 million dollar Modigliani sale at Sotheby's
The art of tax compliant art purchases.
A Manhattan based real estate developer & art buyer is unfortunately in the news media's spotlight this past week for his improper handling of art & other collectible purchases.
What did this person admit to doing...making false representations of where the art purchases should be shipped and providing auction houses and galleries out-of-state addresses to avoid New York taxes.
Being tax compliant would of kept him out of the media spotlight and saved him several million dollars in fines.
How would you advise your clients on following critical rules & regulations during their art purchases?
Manhattan District Attorney - Press Release
Tell your associates & colleagues to follow!
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I hope you learned something new this week from the world of art & finance.
Who knows what the art market has in hold for us in two weeks. But rest assured that I will keep you posted!
Until next time,
Blake