Art’s new superstar investors – Wall Street’s hedge fund titans and overseas industrialists looking for bargains thanks to the weak U.S. dollar – are not exactly endearing themselves to the art world’s old guard.
They’ve elbowed their way into the auction houses’ best seats, inflated prices with a buy-at-all-cost mentality and are turning the once quiet, genteel art world into a rowdy affair, art scene observers, artists and other critics charge.
Despite the extraordinary sums being paid by the nouveau riche – David Rockefeller this year sold a Rothko for $72.8 million at Sotheby’s, beating the pre-sale estimate by more than $30 million -many artists and veteran alike are steaming mad.
And even some artists are bristling at the attitude of these new-to-the-art-world investors, saying few of the new crowd care for art and simply buy and flip pieces of art as they would stocks, bonds or real estate.
“There is a lot of bad feeling about the smaller art dealers being pushed out by the large Wall Street tycoons and financial types,” said New York art strategist Kevin Radell.
“These new people just want to invest and make money on art,” complained Edward Longo, a New York abstract artist in his 70s whose pieces have sold for $10,000 apiece.
“They are fly-by-night people with plenty of money and they don’t know the first thing about art,” Longo complained.
Longo says many artists would never agree to sell their work to high rollers and “novices” who are clueless about light and color and fine lines. “We want people who appreciate our work,” he said.
Another critic, Michelle Senecal, the executive director of the International Fine Print Dealers Association in New York, said, “If a gallery is developing the career of an artist, the last thing they want is people flipping their work.”
The contemporary art auction season kicks off in a couple of weeks and the young Turks and overseas money promise to be front and center – with their wallets wide open.
Radell, at artnet World, tracks data and prices on art sales worldwide.
Total sales in the fine art market for auctions and private sales worldwide last year are estimated by artnet at nearly $40 billion, an increase of 21 percent.
Still, some Wall Street pros don’t know what all the fuss is about.
“Art is another asset class,” said Jing Lerch, an up-and-coming investment banker from China now in New York. “With the real estate market in trouble and volatility in the market, art is the next new hit.”