The Art Market: Galloping inflation

The sales of Islamic art in London this week were watched with heightened interest due to the political upheavals throughout the Middle East. At press time the full results of the whole week were not known but there was certainly no negative impact on the sale at Sotheby’s on Wednesday of the Stuart Cary Welch collection. Cary Welch was a renowned scholar of both Islamic and Indian art; the first sale, devoted to his holdings of Islamic art, was estimated at £3.5m-£5.3m. Despite the saleroom being jam-packed, most of the action was on the phone, but it was feverish – just the first part of the sale totalled a stupendous £20.9m with 94 per cent of the lots sold. Prices soared: an interesting Deccani image of a calligraphic horse from about 1600 galloped to £2.05m – almost 100 times its estimate of £20,000-£30,000 (prices include buyers’ premium; estimates do not). The top price – and a new record for any Islamic work of art – was given for a truly stunning folio from the “Houghton” Shahnameh or “Book of Kings”, an illustrated manuscript made in early 16th-century Iran but tragically split up in the 1960s. The folio was estimated at £2m-£3m but made £7.4m. Even the lowly lots did incredibly well – an Ottoman lock dated to about 1700, estimated at £300-£400, fetched £11,250.

Meanwhile a rare life-size portrait of the early 17th-century Mughal emperor Jahangir made a within-estimate £1.4m at Bonhams Islamic art sale, going to an unidentified Middle East museum. The price accounted for almost half the take of £2.7m; however only 50 per cent of the offerings found buyers.

Another sale that did brilliantly was in Hong Kong last Sunday. As part of its spring season of sales in the territory, Sotheby’s dispersed 106 works of contemporary Chinese art from the much larger collection of Belgian food baron Guy Ullens (and founder of the non-profit Ullens Centre for Contemporary Art in Beijing). The works were of great interest, dating from the 1980s and documenting the beginnings of avant-garde art in China. Its target was $16.7m but here again bidding was frenetic and when the dust had settled the sale had racked up over $54.7m, with all the lots sold and new price highs established for a posse of artists including market stalwart Zhang Xiogang (“Forever Lasting Love”, 1988, at $10.1m) as well as Wang Guangyi (“Mao Zedong, P2”, 1988, at $2.5m). The Zhang price also set a new record for any work of Chinese contemporary art: buyers were mainly Asian private collectors but American private bidders snagged two of the top ten lots.

Still in Hong Kong, the latest art market player to dip its toes in the Chinese waters is Phillips de Pury, which is planning an inaugural sale there this autumn. Full details and the date will be given later this year, says a spokeswoman. Meanwhile Paris’s leading contemporary art gallery Emmanuel Perrotin is rumoured to be scouting for a galley space there as well, something he neither confirms nor denies.

Art funds have had a volatile time over the past five years. At the peak of the art market boom in 2006-2007, at least 40 were launched, as detailed in Noah Horowitz’s excellent book The Art of the Deal (Princeton University Press). But after the 2008-2009 financial crisis, 25 of these were abandoned or “undetermined” – and the survivors were not always raising the hoped-for amounts.

But now the art market has regained its mojo, and funds have come back on the agenda. The latest come from Russia: two were launched last year by asset management firm Leader. Another, potentially the biggest art fund ever, is reportedly in formation. The Rbs14bn (about $500m) fund, concentrating solely on photography, is planned by financial services company Agana (part of Alor group). Agana deputy director Ekaterina Alexandrova said that part of the fund’s assets would be existing private collections but it would also buy at auction. “The target return on investments in the fund could be up to 12-14 per cent per annum in roubles,” claimed Alexandrova.

The amount seems enormous for a photography fund, where individual images are hardly in the same price bracket as, say Picassos, and the inclusion of the investors’ own collections in the fund is surprising: it surely poses the problem of whether they will be valued independently.

Mexico’s Zona Maco art fair kicked off this week with a significant boost – the anticipated arrival of mega-dealers Larry Gagosian and David Zwirner, both visiting the fair for the first time. At the same time Eugenio López Alonso, heir to the Jumex fruit juice fortune and owner of the largest collection of contemporary art in Latin America, the Fundación/Colección Jumex, launched a new hang of his holdings, curated by Osvaldo Sánchez. These are currently housed in a former factory in the industrial suburbs of Mexico City but next year a far bigger, purpose-built, $20m museum will be inaugurated right in the capital. “I didn’t believe in Maco at the beginning but I was mistaken – it now attracts so many international collectors,” he told me. “At the beginning I supported it anyway, and now it is doing well, and the dealers are happy because they sell well.” There will be a report on the fair, which opened after press time, next week.

A heavy sentence of seven years and four months has been handed down in a Stuttgart court to the art dealer accused of being the mastermind behind a massive Giacometti forgery ring. The dealer from Mainz, who was not identified to the press, was found guilty of fraud and falsifying inscriptions on sculptures. German police seized more than 1,000 bronzes and plasters, purportedly by Giacometti, from a Mainz warehouse in 2009. The dealer is not appealing, according to Stuttgart public prosecutor Mirja Feldmann.

Georgina Adam is editor-at-large of The Art Newspaper

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