Last week we pointed out -Art investor drift (1)- that the highest segment of this market is increasingly speculative and how certain investors are operating in it, using it as another financial product, to the point that some are gaining control of key companies in the sector.
The current owner of Sotheby’s, Patrick Drahi, who in 2019 paid 3.7 billion dollars for the auction house, is a magnate investor from different business sectors. He, like Francois Pinault, owner of Christie’s, has become ugly when they privately guarantee works that they put up for auction, playing both sides in the same bid, as an investor and as an auction entrepreneur.
But investors outside the art industry are also on other fronts: behind the Art Basel group of fairs and its parent company, MCH Group, is James Murdoch, son of media mogul Rupert Murdoch, who through Lupa Systems bought 32% of the shares. Or the other group of fairs, Frieze, which in 2016 the Hollywood media conglomerate, Endeavour, acquired 70% of its shares from the founders.
And there are also investors behind many of the large galleries, the so-called backers, who either finance operations that gallery owners alone could not assume, or discreetly have part of the business.
But what we have recently learned is that one of the mega-galleries, the French Perrotin, with ten locations around the world, is in the process of selling 60% of its shares to the French real estate fund Colony IM. Its CEO, Nadra Moussalem, stated that he is convinced that art represents “a very promising asset class for the future”, and that it is the first alliance between a gallery and an investment fund. The gallery owner argues that with the capital injection he will be able to grow his business, since he will continue to lead, fully committed and with 40% of the shares.
However, there are many voices, like that of my friend, the prestigious art sociologist Alain Quemin, who have been denouncing the gallery’s structural problems, its losses as a result of enormous international growth and the fragility of its roster of artists. A few weeks ago, in Basel, faced with repeated questions from everyone about the future of his gallery, Emmanuel limited himself to showing a round sticker inside his jacket that read “Sorry, no comment” and a nice smiley. New times, new businesses.
