Economics Fairs Market USA

What a difference five years make

The super-rich have grown in number since 2008, adding the feel-good factor to this year’s fair

Victoria Miro (M9) sold Yayoi Kusama’s Flowers That Bloom Tomorrow, 2010, for around $500,000. Photo: David Owens

Millions of dollars have been spent on art, parties and hotel rooms this week as the circus surrounding Art Basel Miami Beach rolled into town. Given such conspicuous consumption, it is, perhaps, hard to remember that the art market seemed on the verge of collapse only five years ago.

In December 2008, when many Western economies were in crisis, much of the art world was feeling the chill wind of recession. “It was probably the worst Art Basel Miami Beach ever,” says Philip Hoffman, the chief executive of the Fine Art Fund. “The sales were terrible, the hotels were nearly empty and gallery parties were dinners for 20 people, rather than lobster on the beach for hundreds.” Kristine Bell of David Zwirner (K18) remembers that edition as a “very unsuccessful fair”. She says: “We paused and thought, ‘Wow—there is something negative in play.’”

High demand

Now, it seems that the good times are back: Wednesday’s VIP preview of the fair “was the best-attended opening I can remember in Miami”, Bell says. “People were running to our booth,” says Glenn Scott Wright of Victoria Miro (M9), where sales included Yayoi Kusama’s Flowers That Bloom Tomorrow, 2010, priced around $500,000. Meanwhile, Greene Naftali (E2) has had its most successful fair ever, Carol Greene says. The gallery sold four colourful mattresses by Guyton/Walker (all Untitled, 2013) for $65,000 each to collectors from the “four corners of the world”.

With such high demand, “finding inventory” is something that worries everyone, says Gordon VeneKlasen at Michael Werner Gallery (C10). “That’s why so many galleries have taken on 50 artists; so they have something to show at the 50 art fairs they do,” he says. The gallery’s sales included the $1.4m paid for a mixed-media work on paper made in 1999 by the late artist Sigmar Polke.

How did the art market improve so dramatically? It took less than a year for confidence to return. The global population of the super-rich has grown: the number of billionaires has tripled over the past five years to 2,170, and they have a combined net worth of $6.5 trillion, according to a report by Wealth-X and UBS. But the rest of society has been squeezed. Wealth has spread so unevenly that, for the middle classes, “for the first time since the Great Depression, focusing on redistribution makes more sense than focusing on growth”, according to the Harvard University economist Larry Summers. The state of the art trade is closely linked to the fortunes of the very rich. “There has been a massive polarisation in society and, for better or worse, we happen to be involved with the 1%,” says Sean Kelly (B17), whose stand had almost sold out by Thursday.

The art trade has also benefited from parts of the world that were relatively unaffected by the financial crisis, such as Brazil. This week, 13 Brazilian galleries are exhibiting at the fair and many have reported strong sales. Mendes Wood (N7) had sold out its booth by Thursday, and sales at Casa Triângulo (E12) included three paintings by Mariana Palma for $35,000 each. Galeria Nara Roesler (A16), meanwhile, sold Artur Lescher’s Fuso #02, 2013, for $50,000.

Looking back on 2008, Timothy Taylor (A3) says: “It’s all changed—now it’s a completely global thing.” His gallery’s sales included Josephine Meckseper’s Pyromaniac 1, 2003, for $55,000. Among the countries now exerting more influence on the art market than five years ago are Qatar, Russia and China, and collectors come from more diverse fields. “It’s not just the finance people now. It’s the top achievers in every field: entertainment, technology, real estate,” Taylor says.

Why the sudden interest in contemporary art? The social whirl appeals to some. “People want to be part of this nomadic tribe that travels around the world talking about art,” Bell says. The art-fair circuit is tailor-made for the super-rich. As Chrystia Freeland writes in her book Plutocrats: “Whether they maintain primary residencies in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.”

Many new collectors are searching for more than a social life, however—they want an investment, too. “Art is no longer acquired just for pure enjoyment; it has become a financial asset,” Philip Hoffman says.

Art as a safe asset

Hoffman says the Fine Art Fund has grown from 20 clients in 2008 to 120 this year, and that its coffers have swelled from $10m in 2001 to more than $300m today. The idea of art as an asset has been propelled by other economic factors. Since 2008, financial markets have been volatile, banks have been reluctant to lend and inflation has been rising. Many of the world’s wealthy now view art as a safe, and tangible, store for cash—despite the fact that “there will always be very few good works that will stand the test of time”, the art adviser Patricia Marshall says.

“The trick to collecting has always been to sort the wheat from the chaff and find what will be interesting in 20 years,” says the art adviser Stefano Basilico. He says that, although history will judge whether the market has made the right decisions about specific artists, the cultural significance of artistic production will endure. “It’s not like the music will stop and the world will wake up and say we were crazy to think that art was important,” he says.

Celeb count

Famous faces from Hollywood to Wall Street, along with leading artists, museum directors and collectors, flocked to Art Basel Miami Beach this year. Early visitors included the actors Leonardo DiCaprio, Eva Longoria, Michelle Williams, Jemima Kirke and Val Kilmer. The musicians Lionel Richie, Pharrell Williams and Sean Combs (P. Diddy), the fashion writer Derek Blasberg and the Hollywood producer Brian Grazer were also spotted in the convention centre.

Leading artists who strolled the aisles included Jeff Koons, Olafur Eliasson and Kehinde Wiley, and the architects Norman Foster, Graham Gund, Richard Meier and Jacques Herzog also visited the fair. Jorge Pérez, the property mogul and supporter of the new Herzog & de Meuron-designed Pérez Art Museum Miami, which opened this week, came too.

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Comments

9 Dec 13
16:36 CET

LPRETZ, KANSAS CITY

Glad to hear the super wealthy feel like spending money!

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