5/22/2015

New Book on Art Forgery


The Art Newspaper (Clar Finn) reviews Noah Charney's new book,  The Art of Forgery: the Minds, Motives and Methods of Master Forgers. Seems interesting, the review points out the book does not tell how to determine or look for
forgeries, but is a collection of stories from press articles and the internet about art forgeries, and are broken down into chapters titled Genius, Pride, Revenge, Fame, Crime, Opportunism, Money and Power.  I just order the book and it seems like it might be an entertaining read, but perhaps, according to the review not overly helpful for collectors, or in our cases appraisers.

I always find these books enjoyable to read, as some of the forgery stories are better than fiction.

Click HERE to order on Amazon.

The Art Newspaper reports
Forgery has a fascination that is snake-like, a Schadenfreude of seeing the art world out-smarted. The Art of Forgery by Noah Charney is a compendium of cases; paintings, prints, sculpture, goldwork, wine, literature and science are included. It is a rattling good read for those that know little of forgeries damage to our interpretation of culture. It is not, however, comprehensive. Where is Stefano Bardini’s wholesale “restorations” of Italian primitives? Reinhold Vasters’ exquisite goldsmith’s work is included but not the Castellani’s, who would sell their own jewellery as archaeological finds? What of Guy Hain’s thousands of forged bronzes, many still to be identified, a claim oft said by forgers?

To show physiological insight Noah Charney arranges cases into chapters that sound appropriately like the seven (or eight) deadly sins; Genius, Pride, Revenge, Fame, Crime, Opportunism, Money and Power. Some forgers certainly could qualify for appearances in several categories. Wolfgang Beltracchi comes under crime, which the author defines as group but not organised crime. He did work with his wife, his sister-in-law, and a colleague, but why not have him in Money, or Pride? He showed no remorse for what he has done.

With the Warhol Red Self-Portrait, I understand there are two series, one the Warhol Authentication Board thought he authorised and one they believed he did not. So did they think they were looking at forgeries or unauthorised copies? I understand Joe Simon Whelan produced evidence Warhol did know and oversaw both editions though this did not sway the board.

The author draws most of his material from press articles (so it must be true), the internet, some specialist journals, autobiographies of convicted forgers and the author’s own previous publications. But readers wishing to learn what to look out for, to inform themselves so as not to get caught out, you will find no clues here. The material is peppered with inaccuracy. Looking for underdrawings with a black light, instead of Infra-Red at the other end of the visible spectrum, will destine you to disappointment.

What of the “tells” that first raise doubts that something is not what you think it is? Rare as it is, like the Getty’s Nicholas Turner, one sees several forgeries together allegedly by different artists but revealing a similar style. Might a work look too familiar? Is it a pastiche of several of an artist’s known works not a straight copy? Has it aged in the way one expects of its supposed age? There are no black and white ways to definitively alert the wary. Finding Titanium white, available only from the 1920s, in the ground of a Raphael helps. But one might argue the sample came from a restoration done after the 1920s. Often one is weighing shades of grey drawn from long years of study and looking, and looking is a skill that can be honed over years.

Then there is the forging of provenances. Charney speaks of John Drewe inserting forged documents into bona fide archives, undermining much more than the works they were supposed to support. Looking helps here too. Is the paper right? Yes, paper can be analysed. Does the document fit with what we know of the artist or politician?

Much is to do with context and is the province of the “technical art historian”, who studies the materials and application methods of art works. Charney suggests the art market should test more works, at least those worth into six figures. But this, I gather, is already happening in the Russian avant-garde market, one overwhelmed with forgeries. Buyers agree on a sale but only to pay for it once it has been rigorously scientifically tested.

Clare Finn is an accredited paintings conservator. At the Royal College of Art, she wrote her PhD thesis on Picasso's decorative metalwork. She has often written for Apollo Magazine, the Sculpture Journal and ICON News. She is also the secretary of the Visual Arts and Architecture Section of the Critics’ Circle. 
Source: The Art Newspaper 


5/21/2015

5 Things to do After Purchasing Art


Business Insider has an article on the 5 things the art investor should do after a major purchase. The article discusses with ABD Insurance and Financial Service account executive Kimeral Anthony what is involved to safeguard important art.   These include things such as shipping by professional art handlers and security.

The five to dos are

  1. Meet with insurance advisors (part of which is a recommendation for an appraiser, always gratifying to see this included in these types of articles)
  2. Obtain documentation on the work
  3. Packaging for shipping as well as security
  4. The art should be monitored 24/7 during shipping and delivery
  5. Install security and display the works
Business Insider reports 

So you have some extra millions and you've decided to invest in a piece of fine art. Excellent choice.

But before you go raising your bidding paddle, you'll need an insurance program.

Take, for instance, Pablo Picasso's "Les femmes d'Alger (Version 'O')," which was recently auctioned for a record-breaking $179.4 million. Simply packing, shipping, and installing security for a painting of that value could cost up to $60,000, according to Kimeral Anthony, an account executive at ABD Insurance & Financial Services, Inc.

But wait, there's more: For a painting such as "Les femmes," Anthony tells us the annual premium could easily exceed $100,000.

Whether the art you're eyeing is $1 million or tens of millions, here's Anthony's advice on the insurance arrangements you need to make before you buy.

1. Meet with an insurance advisor as soon as possible.
Anthony strongly recommends looking into insurance options early. "You can't just add on a priceless painting [to your insurance] ... there are so many steps involved," he says. With a multimillion-dollar piece of fine art, you need an insurance carrier willing to take on risk. Anthony suggests going to insurers that specialize in art and other valuables, such as AXA ART and XL Catlin. The insurance advisor can also recommend appraisal and valuation services.

2. Obtain the necessary documentation for the art.
It's important to find out what documentation the insurance carrier requires. This can include any of the following: the artist's name, the significance of the artwork, the artwork's provenance (this includes previous ownership and exhibition history), and the value of the piece. The auction house from which the piece will be purchased should have all of these documents.

3. Find out what type of packaging the art will require.
There is much to consider when packaging a piece of art, including its size, its composition, and whether it requires a temperature-controlled environment. "Art should always be professionally packaged by those who specialize in art shipping," says Anthony. For a painting like "Les femmes," Anthony explains that packaging would occur on site after a full evaluation. Security would be present throughout the process.

4. Arrange for 24/7 shipping and handling security.
High-value works should be monitored throughout transit until they reach their final destination. When creating an insurance plan, it's essential to only hire professional art handlers in order to prevent damage.

5. Prepare and install security at the site where the art will be displayed.
Congratulations, your newly acquired piece of art has been safely delivered. Now, the piece gets professionally installed and alarms are set up. The insurance underwriter will receive confirmation once the piece is safely delivered. Anthony says that some insurance carriers also require video surveillance both inside and outside as a portion of the agreed security program. (Remember: This piece of art is high risk!)
Source: Business Insider

5/20/2015

The ABCs of Art Funds


The Center for Art Law has an interesting article on art funds.  It is long, but worth reading, I have posted one of the sections, Pros and Cons in the block quote below.  Follow the source link below to read the full article. The article topics inlcude a brief introduction, backgrounds and markets, the players, structure, regulations pros and cons, and the future of art funds.  Well worth taking the time to read and familiarize yourself with funds and how they work.

The Center for Art Law reports
Pros & Cons

Art funds offer many unique advantages to investors. The value of fine art is generally uncorrelated with traditional financial markets, providing a means of diversifying portfolios, and hedging against market downturn and inflation. Art typically holds its value, especially on the higher end, and has consistent performance returns, which are very attractive characteristics to investors. Although the art market is subject to little oversight, actual art funds are subject to some financial industry regulation and must comply with initial and periodic disclosure requirements, and antifraud provisions, which provide some level of investor protection. Art fund managers also have a fiduciary duty with regard to their investors, which is virtually non-existent in gallery-investor or auction house-investor relationships. Additionally, fine art has an inherent appeal as a luxury good, and depending on the fund, may be loaned out to investors for personal use.

One potential drawback of art fund investing is that traditional financial modeling does not generally work due to the unique nature of art works and trends in the art market. For investors who are accustomed to relying at least partially on traditional models, this may cause some discomfort. Another concern is that art funds require professionals who can strategically advise on the purchase and sale of art works; however, this is a difficult skill to qualify as past performance is often hard to measure. Limited liquidity is a major issue facing art fund managers and investors; art must be sold according to market trends in order to maximize returns, which may not coincide neatly with the close of a fund. Furthermore, as previously mentioned, unlike the financial markets, the art market is highly unregulated leading to less investor confidence in fair dealings, and more potential for price fixing and manipulation. The issue of valuation presents another problem for art funds as the value of acquired works remain that of the purchase price, not accounting for any shifts, until there is a liquidity event, making it hard to value a fund at certain benchmarks. Provenance issues, including forgery, looting events, and misattribution, are also pervasive in the art world and may arise if proper research is not carried out prior to purchase. To this end, title insurance may be purchased to protect a fund against a murky provenance.
Source: The Center for Art Law


5/19/2015

Guaranteed!


The UK paper the Telegraph has an interesting article on last weeks record breaking sales and lot guarantees.  According to the Telegraph, the curated "Looking Forward" sale which included the record-breaking Picasso and Giacometti works many pieces were either guaranteed by Christie's or third parties.

Christie's new before the sale the Picasso would break the previous record for art at auction because it had a guarantee including buyers premium to sell. 19 of the 35 works in the sale had guarantees. The Telegraphs states that Sotheby's had about 50% of its major sale guaranteed and Sotheby's guaranteeing about half and Phillips guaranteed around 62%.

Christie's is taking a big financial risk, should the markets suddenly collapse, they could be responsible for $10s of millions of dollars. Auction house guarantees have gotten the major houses in difficult financial positions in the past, and is one reason many have moved to share the risk by using third party guarantees.

The Telegraph reports
“Ladies and gentlemen, we are in new territory,” exclaimed Christie’s president and auctioneer, Jussi Pylkkanen as he brought the hammer down on Picasso’s post-war masterpiece, Les Femmes d’Alger, last week. Pylkkanen is prone to making these sorts of grandiose statements whenever Christie’s passes a significant milestone, but in this case, an auction record of $179 million (£116 million) did seem worth crowing over.

This historic moment, however, did not come as a surprise. The painting had a $140 million estimate and was guaranteed by Christie’s to sell. With the buyer’s premium added, it was therefore always going to surpass the previous auction record of $147 million for Francis Bacon’s triptych of Lucian Freud.

Nor was the $706 million taken for Christie’s specially constructed “Looking Forward” sale in which the Picasso was included a surprise, because so much had been guaranteed. Of the 35 modern and contemporary works with a pre-sale estimate of at least $585 million, 19 – with a combined estimate of $402 million, had been guaranteed. Of the 10 record prices set, all except one, Giacometti’s $141 million L’homme au Doigt, had been guaranteed. Some – a $28 million Soutine of a leg of beef, for instance – were backed by third parties, but the largest proportion worth an estimated $250 million had been guaranteed by Christie’s – a record that was not announced.

The sense of déjà vu persisted all week. In Christie’s exclusively contemporary art sale, estimated to fetch at least $500 million, 50 out of the 84 works with a combined low estimate of $378 million – or about 75 per cent of the sale’s value – was guaranteed. Again, some had been backed by third parties, but the majority, worth about $250 million, were guaranteed by Christie’s.

The guarantee, in which sellers are guaranteed an undisclosed sum before auction is an increasingly popular form of doing business at the high end as it eliminates risk for the seller. It is also an area of competition between auctioneers where the highest guarantee offer wins the property for sale.

Christie’s is the most aggressive here. “They are effectively buying market share,” said one art advisor last week. In comparison, Sotheby’s had some 50 per cent of the estimated $315 million value of its main contemporary art sale guaranteed last week, but only half of that, with an estimated value of $84 million, was guaranteed directly by the auction house. Phillips had about 62 per cent of its estimated $96 million contemporary sale under guarantee.

Aside from the dampening effect guarantees can have on bidding because estimates are set high, and the question mark over their profitability, there is some scepticism about whether the guarantees can be a form of price manipulation, and, because of their competitive nature, a driving force behind price inflation. In recent years there have been massive jumps in record prices for a painting by Giacometti and a sculpture by de Kooning, both apparently bought by the guarantor with no competitive bidding.

At last week’s sales, a classic Dubuffet circus painting, Paris Polka, which had belonged to billionaire collector Steve Cohen, was guaranteed by Christie’s with an estimate of $25 million, way above the artist’s previous $7.4 million record. It also sold without any apparent competition at $22 million. So how real are these uncontested results? Do they perhaps sow seeds of doubt that guarantees could be used by unscrupulous auctioneers or third parties with vested interests in raising an artist’s prices?

Whatever the answer, New York’s spring sales of Impressionist, Modern and Contemporary art amassed a record total of $2.744 billion (£1.744 billion) surpassing last November’s previous record of $2.26 billion. Contemporary art, from c.1945 to the present, came out on top with $1.582 billion, just $1 million more than the previous record. The most improved sector by far, though, was Impressionist and Modern art which soared to $1.16 billion, surpassing the $804.5 million record set in 2006. Sotheby’s held its second most successful sale in this category ever, selling several of its top lots to Chinese buyers, and Christie’s saw heavy spending by Russian buyers for its top lots by Modigliani, Degas and Monet.

Again, the highest level of guarantee for Modern art valued at $300 million was at Christie’s, compared to about $70 million of Impressionist and Modern art at Sotheby’s. The contrast demonstrates how anxious Christie’s was to raise the level of its Impressionist and Modern art sales, which had been lagging behind Sotheby’s for several years.

The fact that Christie’s completed a clean sweep in both Modern and Contemporary art last week is now history, and in no small way due to its greater use of the guarantee system.
Source: The Telegraph 


5/18/2015

New Chinese and Russian Billionairs Needed to Sustain Record Prices for Art


Forbes has an interesting article with comments from Doubline Capital's Jeffrey Gundlach on the sustainability of the upper end of the art market. Gundlach tells Forbes it is sustainable so long as Russia and China are producing new billionaires who need to transfer wealth from those economies.

The rest of the post is more about Gundlach's past and thoughts on the future of the financial markets and his love of collecting contemporary art.  But the insight on the art market is interesting.

Forbes reports
Doubline Capital’s Jeffrey Gundlach, the new ‘Bond King,’ and an avid collector of modern and contemporary art from the likes of Piet Mondrian, Jasper Johns and Andy Warhol said he believes the record $160 million price Pablo Picasso’s 1955 Les Femmes d’Alger fetched at a Christie’s auction on Monday evening is sustainable “as long as the world continues to mint new billionaires in Russia and China who can’t get their money out of there fast enough.”

Gundlach’s comments, made on a Tuesday evening call with Doubline investors, indicate he sees no slowing at the high end of the art market as long as new emerging market wealth is being created and in need of a safe store of value.

Monday’s record breaking sale price – $179 million once fees are counted - beat previous record-holder, Francis Bacon’s triptych titled Three Studies of Lucian Freud which sold for $142.4 million at a 2013 auction. Alberto Giacometti’s L’Homme Au Doigot sold at the Christie’s auction on Monday for $140 million, while Edvard Munch’s Scream set off the record pace of the contemporary art market when it sold for $120 million in 2012, Forbes’ Agustino Fontevecchia reported.

Normally known for bold and contrarian calls in the bond market, Gundlach said rising art prices reflect a growing number of billionaires in Russia and China who are looking for a way to park money in more stable jurisdictions outside of their local markets. He equated high end pieces of art to Manhattan town-homes, another fast rising market fueled by offshore money.

It’ll Never Work, They Said -- But These Big Ideas Did
For Gundlach, however, modern and contemporary art is a true passion. About his growing collection, Forbes Life reported in December:

As a boy growing up in Buffalo, New York, in the 1960s, Gundlach was quite literally dragged into an appreciation for art by his mother, who was always taking him to museums and galleries. After moving to Los Angeles with dreams of becoming a rock star following college, he wound up as a successful bond trader and began to collect American landscape artists such as William Wendt and Guy Rose. “I needed something to put on the walls that was better than a poster. I liked the California art, pretty pictures, seascapes, mountainscapes, I bought a lot of them,” he says, admitting to acquiring at least 50 works by the early 2000s. “I thought modern art, abstract art and nonrepresentational art was the biggest scam going.

Then, in May 2002, while on a business trip to London, Gundlach made an afternoon visit to the Tate and had what he considers his art awakening when he went to see “Carnation, Lily, Lily Rose” by John Singer Sargent. “He is arguably the greatest portrait painter in American history. The quality of the paint in the light is just beautiful,” says Gundlach, noting that Sargent’s perfectionism would often cause him to halt tennis matches when the light was ideal, just so he could paint.

“I started wandering around [the Tate], and I kind of got lost, and I found myself in the modern area thinking, ‘What is all this junk?’ I see in this corridor that this artsy-looking guy is sketching, and I wonder what he thinks is so interesting to sketch. So I walk over, and he is sketching this Mondrian (“Composition with Yellow, Blue and Red,” 1937-1942), and I look, and I think this is the greatest thing I have ever seen. I instantly got it.

Indeed ever since that 2002 trip, Gundlach has been on a modern and contemporary art tear, amassing a collection that includes the works of not only Mondrian, Rauschenberg and Johns but also Franz Kline, Cy Twombly, Andy Warhol, Richard Diebenkorn, Philip Guston, Willem de Kooning and Joseph Cornell, among others. He also has quite a few “specific objects” by minimalist Donald Judd, including examples of his “progressions” and “stacks,” which greet guests as they enter the home. In all, Gundlach has about 40 paintings and sculptures at his Los Angeles property, ranging from Warhol’s iconic 1962 “Lemon Marilyn” (for which he paid an estimated $28 million in 2007) and “Orange Car Crash” in his den to Marlene Dumas’ “Die Baba,” scowling at visitors in his living room.

Gundlach isn’t alone in envisaging a steady drip of record prices for scare assets that are open to offshore money. Pershing Square Capital Management’s William Ackman recently spent upwards of $90 million on a 13,500 square foot Midtown condo overlooking Central Park on the premise he will be able to flip the real estate at a profit. So far, Ackman believes he’s in-the-money on the condo flip when looking at recent selling prices on a square foot basis.

During his investor call, Gundlach spent much of his time reaffirming some of his counter-intuitive views. The Federal Reserve, Gundlach said, won’t raise short term interest rates in 2015 out of an abundance of caution. He also sought to downplay recent headlines about Doubline Capital’s strategy. Yes the bond firm is buying Puerto Rico general obligation bonds, but they currently amount to about 1% of assets. Gundlach believes that Puerto Rico will likely meet or come close to meeting the face value of its GO bonds and said he’s likely to add to a relatively small exposure.

Gundlach also said that, contrary to media reports, he’s not predicting a disaster in the high yield bond market in 2015 or 2016.
Source: Forbes 


5/17/2015

Have You Heard of Barneby's?


Last week I was corresponding with fellow appraiser and friend Soodie Beasley, AAA, ASA AM of Kansas City about some mid-century modern pieces I was working on for a consulting assignment.  Although the furniture did not turn out to be valuable, or perhaps even collectible, Soodie passed along a great website called Barneby's.

Barneby's is an auction house sales aggregator, right now with over 450 auctions houses who list their upcoming auctions.  The site is growing quickly.

Additionally, Barneby's archives past auctions.  Barneby's is a site developed in Sweeden, and many of the auction houses are European.  But, the site is now growing in the U.S. and a sampling of auction houses from the US include  Sotheby's, Christie's, Bonhams, Heritage, Phillips, Pook and Pook, Rago, LA Modern, Hindman, Brunk, Neal, New Orleans Auctions, Michaan's, RAgo, Wright, Skinner, Doyle, Stair, Thomaston, Treadway and the list goes on. Even online auction platforms such as Paddle 8, iGavel and Auctionata are listed on the site.

You can search the site by keyword or by category, when the listing comes up you can click on the item and it takes you to the auction website listing.  This simple and intuitive process works upcoming sales as well as archived sales.  The listings are rather amazing, and it is free to use.  You have the option of registering if you wish to save searches.

Check the website out at Barnebys.com, and take a few minutes to view upcoming and past sales. I have done a few searches and have been rather impressed with how the site works and the large amount of price data which is all available for free.

This also shows, as solo professionals appraisers should constantly be networking with fellow appraisers. By reaching out to Soodie, who is an expert in mid-century modern furniture (where I am more of an 18th/19th Century specialist) I not only obtained the info that I needed to assist with my assignment, but I also learned of the Barneby's website.  As solo professionals, it is easy to become overly self-reliant, and by reaching out to fellow appraisers and experts not only expands our knowledge but enhances our appraisal practice.

The Barneby's website states
Recently, the auction market has undergone some dramatic and big changes. Until now, flipping through an auction catalogue required not only the effort to actually get hold of one, but also needing to know industry inside out. The auction houses mainly addressed a small group of sellers and bidders, resembling a clique rather than a market. But this is no longer the case. All over the world more and more people are visiting auctions, which means that the industry is growing – both in number of participants and lots.

We've managed to make all auctions more available by gathering them in one place. By opening up the previously secluded auction world, art, design and antiquities are now just a click away and accessible for everyone to enjoy.

Our central concept is that this transparency should be beneficial to all. By introducing the houses to enthusiastic bidders, we've achieved something new and exciting. We’re providing the auction houses with new, dedicated customers, whilst simultaneously presenting the buyers with the full spectrum of auction houses and lots.
Source: Barneby's 


5/14/2015

Results: Christie's NY Post War and Contemporary Art Evening Sale


On Wednesday evening Christie's NY held its Post War and Contemporary art sale. The sale totaled $658.53 million including buyers premiums. The sale offered 82 lots with 72 selling for a buy through rate of 88%.  The sale sold 94% by value. The top selling lot was Mark Rothko's No. 10, oil on canvas, painted in 1958. It sold for $81.925 million.  A Rothko was also the top selling lot at Sotehby's sale the previous evening.

 So far it has been a very good week for Christie's with their curated sale on Monday bring $705.8 million and now this sale with $658.53 million. Selling over a billion in less than a weeks time is aa new record for Christie's.  Additionally, on Thursday evening Christies holds its Impressionist and Modern sale.

The Wall Street Journal reported on the sale
Sotheby’s sold a yellow-and-blue Mark Rothko abstract from 1954 for $46.5 million on Tuesday. The following night, archrival Christie’s International hollered back by selling a rust-colored, rectangular version that Rothko painted four years later for $82 million.

Dealers said Christie’s Rothko, “No. 10,” was prized in part because its blurry brown and black hues famously matched the somber mood of the artist at that time in his career. It sold to a telephone bidder.

The Rothko anchored a $658.5 million sale at Christie’s that saw eight works sell for more than $20 million apiece. The sale also helped the auction house reach a new benchmark in auction history: It has sold more than $1 billion in art over the course of a single week. It has another sale still to go Thursday.

The total underscores how confident collectors are about the trajectory of art values—and their eagerness to join in no matter how high prices climb.

On Wednesday, collectors reset records for eight artists including Robert Rauschenberg, whose “Johanson’s Painting” mixed-media work—made with objects like a shaving brush and a picture frame—sold for $18.6 million.

Other works sold for far more. Andy Warhol’s “Colored Mona Lisa,” a 10-foot-tall silkscreen peppered with candy-color versions of Leonardo da Vinci’s famous model, sold to New York dealer Larry Gagosian for $56 million.

Lucian Freud’s 1994 portrait of a corpulent nude woman, “Benefits Supervisor Resting,” sold for $56.2 million to London dealer Pilar Ordovas, over its $50 million high estimate. After the sale, Ms. Ordovas said she bought the work on behalf of a client who wishes to remain anonymous.

“This is a painting that Lucian Freud told me he really loved,” she said. “I was determined to win it.”

The price surpasses the $33.6 million that Russian billionaire Roman Abramovich paid for a companion Freud portrait of the same woman, Sue Tilley, “Benefits Supervisor Sleeping,” seven years ago.

Collectors from Asia also took home examples by Martin Kippenberger and Adrian Ghenie.

There were a few tremors in the sale, which could be a sign that collectors were experiencing a little sticker shock.

Francis Bacon’s “Portrait of Henrietta Moraes,” a purple portrait in 1963, sold to an outside investor who had agreed before the sale to buy it if no one else wanted it. It got no bids in the sale and so wound up selling to that investor for $47.7 million.

Christie’s also wanted at least $15 million for Christopher Wool’s untitled word painting from 1990 that features huge black stencil-style letters that spell out the word “hypocrite.” It garnered no bids and went unsold.

Overall, Christie’s managed to find buyers for 72 of its 82 offerings, and feverish bidding for some works helped the house achieve 94% of the sale’s target value.

New York’s spring auctions round out Thursday with a sale of Impressionist and modern art at Christie’s and a contemporary sale at boutique auctioneer Phillips.
Source: The Wall Street Journal