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Billionaires And The Global Art Market

Uncovering billionaires’ motivations for spending up to nine figures on precious works of art.

In early November, taxi driver turned billionaire Liu Yiqian spent a hefty US$170 million for an Amedeo Modigliani nude at a Christie’s auction in New York. The Italian painter’s “Nu Couché (Reclining Nude)” sold for US$152 million before fees, making it the second-most expensive work sold at auction and exceeding the estimate of about US$100 million. The 1917-1918 masterpiece is now the 10th work of art to fetch a nine-figure price at auction, according to the New York Times.
Liu, age 51, was raised in a working-class family in Shanghai and dropped out of school at age 16 to help his mother sell leather handbags, later driving a taxi. He built his fortune by investing in stock trading, real estate and pharmaceuticals, and now he’s worth US$1.6 billion.
As one of China’s flashiest art collectors, Liu caused a media uproar when he acquired a US$36.3 million Ming-dynasty porcelain cup at a Sotheby’s auction — and was then photographed drinking tea from it.
But could Liu’s blockbuster purchase of Modigliani’s “Nu Couché” represent a turning point for the controversial billionaire?
“In general, we see a trend of Chinese art collectors starting to diversify their collection,” said Kejia Wu, a professor of the Art Business Master’s programme at Sotheby’s Institute of Art. “In the past, Chinese buyers spent most of their capital allocated to art collecting on Chinese antiquities, including Chinese works of art and paintings.” For instance, Wu noted, Liu has received media attention for his US$45 million purchase of an ancient Tibetan silk thangka last November. The sale of the 600-year-old Tibetan embroidered artwork set a record for Chinese art sold at an international auction.
“Now that Liu is collecting Modigliani, I think that reflects a general trend of Chinese buyers purchasing top-tier Western art,” Wu said.
Liu and his wife have founded Shanghai’s the Long Museum, with two branches in Pudong and West Bund. “He has a private museum in Shanghai, so it’s understandable that in addition to Chinese antiquities, he wants to bring in more Western masterpieces to establish a more international reputation,” Wu said.
Liu has announced his goal of transforming the Long Museum into a world-class destination: “Now, a Chinese museum has a globally recognized masterpiece, and my fellow countrymen no longer have to leave the country to see a Western masterpiece,” he told the New York Times. “I feel very proud about that.”
Another driver of UHNW Chinese appetite for art is the volatility of the Chinese economy, according to Wu. “It’s a combination of different psychological elements,” she said. “Art collectors have to like what they buy, and they want to make sure the value can be preserved for a certain period of time. It’s another way to allocate their assets, in addition to the equity market and real estate market.”
In the case of Modigliani’s art, the demand is high and the supply is very low, since the Italian artist died relatively young, at age 35, and only painted a limited number of works during his lifetime. His series of nude reclining women is particularly celebrated, and “other Modigliani nudes are in major museums, such as the Guggenheim, MOMA and the Met,” Wu said. “That’s why if you put this work into perspective, it’s an extremely rare, precious painting.”
Below are several examples of billionaires who have made blockbuster purchases in the art world:
Former Qatari Prime Minister Hamad bin Jassim bin Jaber Al Thani has been linked to the purchase of Pablo Picasso’s Les Femme d’Algers (Version “O”), which sold for US$179.4 million at Christie’s in May 2015, becoming the priciest work ever sold at an auction. However, the mystery buyer has yet to be identified. Al Thani acquired Mark Rothko’s “White Center (Yellow, Pink and Lavender on Rose” abstract painting for a reported US$72.8 million at a Sotheby’s auction in May 2007.
New York financier Leon Black spent US$119.9 million on Edvard Munch’s 1895 pastel “The Scream” at Sotheby’s in May 2012. Munch, who was Norwegian, painted four versions of “The Scream” between 1893 and 1910, but the artwork owned by Black is the only one not in an Oslo museum and the first to come up at auction. Black’s extensive art collection encompasses drawings by Vincent van Gogh and Raphael, watercolors by J.M.W. Turner, cubist paintings by Pablo Picasso and ancient Chinese bronze works, according to the Wall Street Journal.
Elaine Wynn, the ex-wife of billionaire casino mogul Stephen A. Wynn, acquired Francis Bacon’s triptych “Three Studies of Lucian Freud” for US$142.4 million at Christie’s in November 2014. The couple, who divorced in 2010, are avid art collectors and have opened galleries in some of their casinos, displaying works by Edgar Degas, van Gogh and Henri Matisse. The crown jewel of the Wynn collection was Picasso’s 1932 oil painting “Le Rêve,” which they named a casino after. In March 2014, Stephen Wynn sold “Le Rêve” to hedge fund billionaire Steven A. Cohen for US$155 million.
Source – «WEALTH-X»

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