New Masters Of The Art Universe
On the morning of Oct. 2, hedge-fund manager Daniel Loeb sat down in his Park Avenue office -- which he'd decorated with a photograph of a Marlboro Man by Richard Prince -- and fired off a vitriolic activist-investor letter. Mr. Loeb, 52 years old, has a reputation for sending blistering critiques to companies he intends to overhaul, like Sony and Yahoo. This time around, he attacked the performance and management of Sotheby's, calling the auction house 'an Old Master painting in desperate need of restoration.'
Halfway around the world in Hong Kong, Sotheby's chief executive and chairman Bill Ruprecht -- a 58-year-old former furniture maker and a lifer at the company -- didn't learn about the letter right away because he was asleep and didn't hear his cellphone. A frantic Sotheby's staffer got a direct line to his hotel room and woke him up.
Hedge-fund managers, who play a vital but disruptive role in the broader financial markets, are increasingly throwing their weight around the art market: They are paying record sums to drive up values for their favorite artists, dumping artists who don't pay off and offsetting their heavy wagers on untested contemporary art by buying the reliable antiquity or two. Aggressive, efficient and armed with up-to-the-minute market intelligence supplied by well-paid art advisers, these collectors are shaking up the way business gets done in the genteel art world.
Sotheby's has called Mr. Loeb's campaign 'baseless,' but since he's amassed a 9.3% stake in the company last fall, the house has replaced several top executives, and has said it would release a capital allocation review in the next few weeks that could offer more ideas to wring value for shareholders. Mr. Loeb declined to comment on the status of his investment in Sotheby's.
All of this represents a major shift from a decade ago when only a handful of Wall Street investors such as Mr. Loeb and SAC Capital Advisors' Steven Cohen were even going to auctions, much less buying art. Now, dozens of hedge-fund managers are joining the fray, including newcomer Alan Howard, whose burgeoning collection includes a $43 million Monet. Nearly all are applying their day-job tactics to their art shopping, dealers say.
Corporate raiders a generation ago typically held their art purchases for at least a decade. Today, the average holding period for contemporary art is two years, according to a former Sotheby's specialist. That is enough time to reap a tidy profit on a rising-star artist but hardly enough for art history to rule on the artist's lasting merits.
Differing tactics abound, but taken together this group of hedge-fund collectors arguably influence the prices and popularity of the world's top artists -- from mainstays like Claude Monet to newer hits like Jean-Michel Basquiat -- to an extent unmatched by all but emirs and oligarchs.
'The rest of us are just sitting on the sidelines,' said Len Riggio, a longtime collector and founder of bookseller Barnes & Noble. 'I go to auctions now and feel like a witness -- I watch, shake my head, and go home.'
Hedge-fund managers collect broadly -- some collect stamps, others collect original drafts of Bob Dylan lyrics. But Stephane Connery, a private dealer who once ran Sotheby's private-sales department, said many have started veering toward postwar and contemporary art, particularly since the recession. One reason is that the art being made and traded in the contemporary segment is still so new that values for its artists remain in flux. Price spikes can often be stoked by a handful of big bidders competing for an artist's early examples at auction.
A recent jump in Basquiat's prices indicates he might be in play. Until a few years ago, the going rate for one of the artist's frenetic 1980s portraits or graffitilike street scenes was $5.5 million. But eight of his top prices have been achieved in the past two years, led by a $48.8 million double portrait from 1982, 'Dustheads,' that Christie's sold last May. Dealer Jose Mugrabi, who is known for buying Basquiats, credits hedge-fund collectors for the run-up: Mr. Loeb owns a Basquiat painting of a boxer throwing a punch.
Mr. Mugrabi said a hedge-fund manager recently asked him to track down a mural that Basquiat painted inside a New York nightclub called the Palladium. 'The guy said, 'I'm willing to pay $100 million, $200 million for it,'' he said. 'He wants the art he loved and remembered seeing when he was young, and he can afford to pay anything to get it.' (Mr. Mugrabi said he agreed to look for the mural.)
Thomas Seydoux, a former Christie's Impressionist specialist who now works as an art adviser, said a few years ago hedge-fund collectors were similarly bolstering Impressionist and modern artists like Monet.
The 'danger,' Mr. Seydoux said, is that buyers who glom onto artists enjoying an auction spurt can also swivel away just as quickly if one the artist's pieces later bombs at auction or anything else suggests prices have peaked. Ultimately, the flitting phenomenon adds volatility to segments of the art marketplace typically known for being steadier than contemporary art.
Mr. Cohen's art trades are closely followed. He knows collectors prize their discretion, yet he occasionally chooses to divulge his art purchases the same way he does his stock accumulations because, dealers say, it can add luster to his collection overall. In the fall of 2012, he paid casino king Steve Wynn a record-setting $150 million for Pablo Picasso's 'The Dream,' but news of his purchase began circulating in the media less than two weeks after his fund settled insider-trading charges with the SEC. (Mr. Cohen faces civil charges from the SEC alleging failure to properly supervise employees. He has denied all wrongdoing.)
Mr. Cohen is known for seamlessly mixing his investing and collecting -- and finding creative ways to reap value from both. In March 2009, while contemporary art values were wobbling with the recession, Mr. Cohen's fund SAC Capital Advisors built up a 5.9% stake in Sotheby's, making the fund the house's third-largest shareholder at a time when Sotheby's stock fell below $10 a share. A few weeks later, Mr. Cohen announced that he was lending 20 pieces from his private art collection to the same auction house for a temporary exhibit to be held shortly before an important series of New York sales in May. Sotheby's was so pleased by his move that it printed a limited-edition, white leather-bound exhibit catalog. By June, Sotheby's share price had climbed above $14 and SAC divested its stake.
Last fall, with art values again nearing record levels, Mr. Cohen consigned a different batch of artworks to the same house and sold the group for a combined $77 million -- including a $26.5 million Gerhard Richter abstract, 'A.B. Courbet,' that he had bought at an art fair for around $20 million the year before.
Hedge-fund collectors don't bet against their artists as openly as they short sell securities, but they can unload disappointments. Damien Hirst was one of the more heavily traded living artists before the recession, but his auction prices plummeted with the crisis and now he rarely comes up at auction -- a sign that collectors would rather sell his art privately or hang onto it in case his values recover. Dealers say hedge-fund collectors have also gone soft on Cy Twombly, though his place in art history seems more secure.
'There's a significant component of speculative energy about this group' of collectors, said Paul Gray, a co-owner of Richard Gray Gallery who advises Citadel's Ken Griffin. The Chicago collector doesn't trade art in similar fashion -- he's only ever sold a single piece -- but Mr. Gray said he does employ the same 'laser focus' to his collecting as he likely does to his investing. He only wants masterpieces that can hold their own hanging alongside the few dozen pieces he already owns by Paul Cezanne, Claude Monet and Jasper Johns.
And when Mr. Griffin spies a winner, he's willing to pay a premium. In 2006, he paid David Geffen $80 million for Johns's crackling 1959 wordplay painting 'False Start' -- a record price at the time for a living artist -- after seeing the painting in the music mogul's Los Angeles home.
The twist is, Mr. Griffin and his wife, Anne Dias Griffin, had actually been invited to visit to mull a different piece by Jackson Pollock, but Mr. Gray said, 'I could tell by how long Ken stood in front of the Johns that he wanted it. When you love a painting, there's no way to hide it.'
In a realm that prizes tact over efficiency, some hedge-fund managers' maneuvers have rubbed the establishment the wrong way. Dealers were caught off guard when Exis Capital Management's Adam Sender enlisted Phillips to auction off 30 contemporary artworks in 2006 that he had amassed during the previous five years. According to reports at the time, Mr. Sender had told the dealers that he planned to install his art in a private museum. Instead, he built an online 'virtual' museum of his entire collection, one that people must get email permission to access. Dealers say they would have preferred their artists' works be exhibited in a public institution. His Phillips sales totaled more than $19 million, garnering him a sixfold return on his investment.
Mr. Sender leveraged his collection in another way three years ago when he put his 5,000 square-foot Miami home up for sale. To capitalize on the art crowds coming to town for Art Basel Miami Beach, he transformed his property into a weeklong exhibition venue. On view: Around 70 pieces from his collection, including works by Cindy Sherman and Richard Prince.
Mr. Sender and his collection's registrar, Marianna Galofaro, didn't return requests for comment.
Hedge-fund collectors have a track record of taking creative financial positions in art. When John Paulson, who hangs Alexander Calder watercolors around his office at Paulson & Co., found out that New York gallery Berry-Hill was defaulting on $26 million in debt two years ago, he didn't tsk-tsk like the rest of the art world. Instead, his fund swept in and took over the gallery debt -- seeing potential upside in the gallery's 18th-20th century inventory the same way he's known for spying value in distressed companies. Mr. Paulson, through a spokesman, declined to comment.
Mr. Connery, the private dealer, said one of his hedge-fund clients found his collecting groove after he began researching blue-chip artists whose prices in 2002 still appeared 'undervalued' compared with their peers. His roster turned up artists like Auguste Rodin, who was then selling for less than Alberto Giacometti, and Salvador Dali, whose prices at the time lagged behind surrealist Rene Magritte. Within a couple of years, Mr. Connery said the collector amassed seven Dali paintings and four Rodin bronzes.
'He said, 'Let's go long on Rodin,' and look what's happened -- the markets for those artists have exploded,' Mr. Connery added. No one had paid more than $5 million at auction for Rodin a decade ago; today, the French sculptor's auction record stands at $18.9 million. Dali has enjoyed a similar bump, his auction high bar climbing from $5.7 million four years ago to $21.7 million currently.
Activist investors tend to thrive in volatile environments, but there are signs that Mr. Loeb's campaign against Sotheby's management has been put on the back burner as he launches other fights. Last fall after the auction house adopted a so-called poison pill to restrict his fund from increasing its stake to over 10%, Mr. Loeb threatened a proxy fight this spring -- but he has gone quiet on that front.
So far, Mr. Loeb hasn't succeeded in two of his stated objectives: assuming a board seat at Sotheby's and ousting Mr. Ruprecht from the top perch. But the auction house has done some internal housecleaning. Several top executives have left including Tobias Meyer, the longtime head of contemporary art and principal auctioneer. In December, the board announced it had appointed Domenico De Sole, former CEO of Gucci, as its lead independent director. Sotheby's is also putting the finishing touches on its capital allocation review, due out soon, in an attempt to return cash to shareholders. Second-round bids for a possible sale of the auction house's glittery headquarters on Manhattan's Upper East Side are due in the next couple months. People inside the company say the moves are partly, but not entirely, a response to Mr. Loeb's campaign.
Whatever happens in the Sotheby's boardroom, Mr. Loeb is still enjoying his other role -- as hotshot art collector. At Christie's last major contemporary sale, Mr. Loeb sat in the third row and bid on a Creamsicle-colored abstract by Mark Rothko, 'No. 11 (Untitled),' ultimately winning it for $46 million. The painting was only priced to sell for up to $35 million. After the sale, Mr. Loeb grinned but declined to elaborate on the buy.
10月2日的早晨，对冲基金经理丹尼尔·洛布(Daniel Loeb)在他公园大道的办公室中落座——他以一帧由理查德·普林斯(Richard Prince)创作的“万宝路牛仔”的照片装饰办公室——并发出了一封尖刻的维权投资者信件。今年52岁的洛布以向他有意改革的公司——如索尼(Sony)和雅虎(Yahoo)——发起猛烈的批评而知名。这一次，他抨击的是苏富比(Sotheby's)的业绩与管理层，他把这家拍卖行称作“一幅迫切需要修复的大师画作。”
这一切反映了一个不同于十年前的巨大转变，当时只有洛布和SAC Capital Advisors的史蒂文·科恩(Steven Cohen)等少数华尔街投资者才会去拍卖会，买艺术品的就更少了。现如今，包括新手艾伦·霍华德(Alan Howard)在内的数十名对冲基金经理加入了这个行列，他迅速扩充的藏品包括一幅价值4,300万美元的莫奈的作品。艺术品经纪人称，几乎所有的对冲基金经理都会把他们在日常工作中运用的策略运用到艺术品购买上。
尽管在策略层面有诸多争议，但集合起来看，这群对冲基金经理藏家对世界顶级艺术家作品价格及热门程度的影响力之大——这些艺术家既包括如克劳德·莫奈(Claude Monet)这样的主流画家，也包括让-米歇尔·巴斯奎特(Jean-Michel Basquiat)这样的新兴热门画家——只有酋长和垄断寡头才能与之相提并论。
巴诺(Barnes & Noble)书店的创始人、老藏家莱恩·里焦(Len Riggio)说：“我们其余的人只是在一侧旁观，现在去到拍卖会，我感觉自己就像一名看客——看一看，摇摇头然后回家。”
对冲基金经理的收藏范围很广，有的收藏邮票，有的收藏鲍勃·迪伦(Bob Dylan)的原版歌词手稿。曾管理苏富比私人销售部门的私人交易经纪人斯特凡·康纳里(Stephane Connery)称，许多对冲基金经理已开始转向战后及当代艺术品，这一趋势自经济衰退以来尤为明显。其中一个原因是，当代范围内的作品及其交易仍旧非常新，其艺术家的价值仍在浮动不定。一小群大买家在拍卖会上争相竞拍艺术家早年作品常常会推动该艺术家的作品价格飙升。
科恩的艺术品交易往往备受关注。他知道藏家以谨慎为贵，不过他偶尔会透露自己入手的艺术品，正如他透露自己的股票储备一般，因为这么做能增强其藏品总体的吸引力。2012年秋季，他以创纪录的1.5亿美元高价从赌王史蒂夫·温(Steve Wynn)手中买下巴勃罗·毕加索的《梦》(The Dream)。不过，在其基金与美国证券交易委员会(SEC)达成内部交易和解后还不到两周，他买下这幅画的消息就开始在媒体上流传开来。（SEC指控科恩未能恰当监管职员，但他否认了所有不当行为。）
科恩以将投资和收藏天衣无缝地融合在一起、并找到从这二者中获利的有创意的方法而知名。2009年3月，尽管当代艺术品的价值随着经济衰退而起伏不定，科恩的SAC Capital Advisors基金却增持苏富比的股份至5.9%，使该基金在苏富比的股价跌至不到每股10美元之时成为它的第三大股东。几周之后，科恩宣布他将把自己的20件私人藏品借给苏富比，供其在5月纽约系列重要拍卖会之前做临时展览。苏富比对科恩的举动感到非常高兴，还印制了一份限量版的白色真皮裹面展览目录。到了6月份，苏富比的股价涨至14美元上方，SAC随之将股票脱手。
去年秋季，由于艺术品价格再次涨至历史高位附近，科恩将另外一批艺术品委托给苏富比拍卖，并以7,700万美元的总价将它们售出，其中包括格哈德·里克特(Gerhard Richter)一幅2,650万美元的抽象画——《A·B·库尔贝》(A.B. Courbet)。这幅画是他于前一年花费约2,000万美元在一个艺术博览会上买入的。
对冲基金经理藏家不会像做空证券一样看衰他们的艺术家，但他们能释放出失望情绪。在经济衰退前，达明·赫斯特(Damien Hirst)是在世艺术家中交易较活跃的一位，但其作品的拍卖价随着危机的来临骤然下跌，现在他的作品很少在拍卖会上出现——这表明藏家们宁愿私下出售他的作品或坚持持有以待价格回升。艺术品经纪人称，尽管赛·通布利(Cy Twombly)在艺术史上的地位似乎更稳固，但对冲基金经理藏家对他的热情已有所冷却。
Richard Gray画廊的合伙人之一保罗·格雷(Paul Gray)说：“这群（藏家）的行为有很大的投机成分。”该画廊为对冲基金公司Citadel的肯·格里芬(Ken Griffin)提供咨询服务。这名芝加哥藏家不会像进行投资那样来交易艺术品——他只卖过一件艺术品——但格雷称格里芬会运用自己在投资时可能采用的“高度集中”策略来进行收藏。他已经拥有出自保罗·塞尚(Paul Cezanne)、莫奈和贾斯珀·约翰斯(Jasper Johns)之手的数十件艺术品，他只想要能与这些作品相提并论的杰作。
如果发现了精品，格里芬愿意为之付出高价。2006年，格里芬在音乐巨头戴维·格芬(David Geffen)的洛杉矶住宅中看到了约翰斯1959年创作的一幅文字游戏画作《虚幻的开始》(False Start)，之后他豪掷8,000万美元买下了这幅画，这在当时创下了在世画家作品售价的最高纪录。
有意思的小故事是，格里芬与妻子安妮·迪亚斯·格里芬(Anne Dias Griffin)实际上是受邀去观摩另一幅杰克逊·波洛克(Jackson Pollock)的画的。格雷说：“看到肯在约翰斯那幅画前站了那么久，我就知道他想得到它。如果你迷上了一幅画，你是没办法隐藏的。”
在这个珍视鉴赏力而非效率的领域，某些对冲基金经理的花招破坏了他们自己的形象。2006年，Exis Capital Management的亚当·森德(Adam Sender)委托Phillips拍卖行，为其拍卖他在之前五年中收藏的30件当代艺术品，此举让艺术品经纪人措不及防。当时的报告称，森德之前告诉艺术品经纪人，他打算以一个私人博物馆来安置他的艺术藏品。事实是，森德建了一个囊括其所有藏品的在线“虚拟”博物馆，人们必须获得邮件许可才能参观它。艺术品经纪人说，他们本来更愿意那些艺术家的作品在公共机构中展出。森德的藏品在Phillips共拍得1,900万美元，给他的投资带来了六倍回报。
对冲基金经理在艺术界历来实施超越常规的财务举措。Paulson & Co.的约翰·保尔森(John Paulson)在自己办公室四处张挂亚历山大·卡尔德(Alexander Calder)的水彩画，两年前他发现纽约画廊Berry-Hill有2,600万美元债务即将违约，他并没有像艺术界的其他人一样不予看好，而是大举介入，接手了该画廊的债务——就如他以善于发现陷于困境的企业的价值一样，他看到了该画廊18至20世纪藏品的上行潜能。保尔森通过一名发言人表示对此不予置评。
私人交易经纪人康纳里称，他的一名对冲基金经理客户在开始寻觅其作品售价在2002年与同代人相比依然“被低估”的大牌艺术家的作品后，发现自己的藏品有了提升。他的藏品名录出现了奥古斯特·罗丹(Auguste Rodin)和萨尔瓦多·达利(Salvador Dali)，当时罗丹作品的售价还低于阿尔贝托·贾科梅蒂(Alberto Giacometti)，达利作品的价格也落后于超现实主义画家勒内·马格利特(Rene Magritte)。康纳里称，一两年之内该藏家就收藏了七幅达利的画作和四件罗丹的青铜雕塑。
迄今为止，洛布还未成功实现他确定的两个目标：获得苏富比一个董事席位，以及将鲁普雷希特逐出高层。不过，这家拍卖行进行了一些内部整改，这包括长期担任当代艺术品部门主管、首席拍卖师托拜厄斯·迈耶(Tobias Meyer)在内的数名高管的离职。去年12月，苏富比董事会宣布任命前古驰(Gucci)首席执行长多梅尼科·德索莱(Domenico De Sole)担任其首席独立董事。该拍卖行还会完成即将出炉的资本配置报告的最后工作，以尝试向股东返回现金。针对可能出售的曼哈顿上东区豪华总部的第二轮竞标将在数月内完成。苏富比内部人士称，实施这些举措一定程度上——但并非完全——是为了回应洛布的抨击。
无论苏富比的董事会发生什么，洛布仍旧享受他的另一个角色——艺术品收藏大亨。在佳士得上一次的当代艺术品大型拍卖会上，坐在第三排的他竞拍了马克·罗思科(Mark Rothko)一幅奶昔橘色的抽象画——《无题第11号》(No.11 (Untitled))，并最终以4,600万美元成功拍下。这幅画的估价最高，为3,500万美元。拍卖结束后，洛布微微一笑但拒绝说明购买详情。