May 11, 2007 3:07 pm

Big spenders drawn to the Big Apple

If you have an interest in collecting post-war art, you might want to consider an impulse trip to New York to attend this week’s contemporary art sales at Sotheby’s and Christie’s.

These auctions, which are set to last from Tuesday until Thursday, are colourful affairs. And for those willing to make the effort, they offer the opportunity to rub shoulders with some of the most established collectors. Leading ones include Paul Allen, a founder of Microsoft, Steve Winn, the casino tycoon, and Charles Saatchi, the advertising executive.

The appeal of the contemporary art market is growing among investors looking to diversify their assets beyond stocks, shares and property. And a rally of interest on the part of younger buyers, particularly in the hedge fund world, has helped push up prices to levels most experts consider unsustainable. Sotheby’s and Christie’s expect to sell as much as $1.4bn (£700m) of post-war works in the next two weeks, a testament to the rise in the genre’s popularity.

“Art plays a social role. It offers an emotional dividend. People often use art to leverage their social acceptance. It’s always been
that way,” explains Karl
Schweizer, UBS’s head of art banking. “Post-war art has a modern image and because it’s more trendy that also has appeal. In many cases, people are trying to model their personal images around what they collect. And of course, a funky modern collection would be more hip probably than a more conservative Old Masters collection.”

On offer are a smattering of some of the most seminal works in contemporary art. Mark Rothko’s 1950 painting White Center, which was owned previously by David Rockefeller, is expected to fetch as much as $40m.
 Francis Bacon’s 1962 Study from Pope Innocent X, based on the artist’s interpretation of Velazquez’s papal paintings, is likely to sell for more than $30m. And Jackson Pollock’s 1949 masterpiece Number 16 should bring in $18m-$25m. At the lower end of the price range are works by Elizabeth Peyton, a young American artist, which are likely to make $400,000 to $500,000.

The appeal of contemporary art is that it is a field that offers the opportunity to invest in works by artists who are living, according to Anthony Grant, senior specialist at Sotheby’s. And increasingly, analysts say, buyers who have traditionally favoured impressionists are cross-pollinating and moving in to pick up works in the field.

The diversity of periods is appealing as the contemporary scene spans pop artists such as Warhol, Rauschenberg and Lichtenstein to photographers such as Gorsky. Arguably, the two most consistently expensive artists are Gustav Klimt and Francis Bacon, analysts say. Works by Klimt are regularly sold for more than $100m and those by Bacon for $35m or more, according to Charles Dupplin, who heads the art and private client division at the specialist insurer Hiscox.

Dupplin says the principal difficulty investors face is determining whether the pieces they buy will still be “iconic” 50 years from the time of their purchase. These days, it is difficult to see the appreciation in the value of collections that David Rockefeller has.

Now 91, the American philanthropist bought Rothko’s White Center in 1960 for less than $10,000.

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