A Look at UHNWIs

Fortune posted an interesting article on home and car ownership of Ultra High Net Worth Individuals (UHNWI). A study by AIG reveals that UHNWIs own 9 homes and 19 cars.  One thing to note, the 19 cars are cars which are driven, not collector cars, and the 9 homes, are home owned outside of the U.S., only overseas homes.  They also had an average of nearly $20 million in insured fine art, and spent more than $250,000 annually on insurance premiums.

As appraisers, we should all be targeting HNWIs and UHNWIs as clients when possible, as there is a strong need for property valuations and the wherewithal to pay for qualified appraisals. Of course one way to target that market is to work with banks and wealth managers.  This is part of the strategy we have taken at TAFAC with the recent presentation at US Trust, the wealth manage division of Bank of America.

The appraiser profession should continue to push for high standards and qualifications, and while some may complain, we need to move away from those who are not qualified and do not write to exacting societal standards. It bothers me when I see appraiser promotions which are incorrect and misrepresent credentials and experience, as well as the many low-brow promotional campaigns geared toward the lowest common denominator. It hurts us all and breaks down all of the hard work and efforts undertaken to truly make personal property appraising a respected and recognized profession.

Fortune reports on UHNWIs
That the average number of residences and vehicles owned by the average “ultra-high net worth” individual, according to a new study from AIG, which detailed the assets of the insurance company’s richest U.S. customers. They also have an average of $19.6 million in insured fine art. What’s more, the nine homes doesn’t include any property they may own in the U.S., investment or otherwise. AIG only asked about property overseas. Also not included in that tally: Collector’s items. So those 19 cars are vehicles that the billions are actually driving around, or their drivers do.

AIG declined to say exactly how much these individuals were worth. But the company said that the survey included AIG clients who spent more than $250,000 on insurance premiums a year. A spokesperson said that the survey polled several hundred clients—including 40% of the Forbes 400 Wealthiest Americans. The wealth of the Forbes 400 wealthiest ranges from $1.7 billion to $81 billion, with a median net worth of around $3.2 billion.

The top 0.01% of Americans had average net worth of $371 million in 2012, according to a 2014 study from economists Emmanuel Saez and Gabriel Zucman.

Of the homes owned overseas by the high net worth clients, the most, 14%, were in Mexico. But it’s probably not a surprise that many of the homes were located in tax-friendly locations, like the Bahamas, 13%, and other parts of the Carribean, 9%. Another 12% were situated in England, and another 9% in France.

AIG said it could not comment as to whether the clients had bought these properties for leisure, business, or perhaps to offshore their assets for tax purposes.

The survey comes as the wealth inequality gap in the U.S. has been steadily widening. Ultra-wealthy Americans, the 0.01%, accounting for about 16,000 families by Saez and Zucman’s estimates, control about 11.2% of the total wealth in the U.S. That’s up from 5% in 1995.

Earlier this year, home ownership in the U.S. dropped to 62.9%, the lowest rate since 1965. Earlier this week, the Federal Reserve announced that the number of subprime auto loans in delinquency was at its highest rate since 2010.
Source: Fortune 


Geneva Free Port

Mark Bench from the art lender Borro sent me this interesting article from the BBC on the size and scope of the Geneva Free Port. The article starts out looking at number of objects in museums, such as 2300 paintings in the National Gallery in London, or 200,000 artworks at the Met in NYC. The BBC notes there are possibly 1 to 1.2 million pieces of artworks stored in the Geneva Free Port. The article also notes the Free Port has been cracking down on unethical and unseemly storage clients.

The BBC reports
The National Gallery in London has around 2,300 paintings in its collection - which might sound a lot, but is a piffling hoard compared to the Museum of Modern Art in New York, which has gathered almost 200,000 artworks of varying types and quality.

That is properly impressive. But it's not a patch on what you will find - reportedly - in an unprepossessing, windowless warehouse complex in south-west Switzerland.

I say "reportedly" because nobody actually knows exactly how many works of art are stored in the Geneva Free Port, but its chairman talks of "a million", while the New York Times says the number is nearer 1.2 million (including around 1,000 works by Picasso). Either way, it is oceanic.

It is not the property of a single institution or art-crazed individual - it belongs to an unaligned group of art dealers, collectors, freight forwarders and offshore companies (generally with opaque ownership), who appreciate the anonymity and prison-like security provided by the Swiss facility.

It is a strange place. As Ann Widdecombe once said of Michael Howard, it has "something of the night" about it. It feels sinister. And spooky in a Kubrick's The Shining sort of way, as you walk along miles of identical corridors with faceless locked metal doors, behind which you imagine great works of art concealed and incarcerated in their bespoke wooden cases.

By its own admission, the Geneva Free Port has been used in the past by "undesirable tenants" to conduct illicit archaeological trafficking, a fact that was made public when Italian police were given access a couple of years ago because they suspected stolen treasures might be stashed there.

They were right - and then some. By the time they put down their crowbars, they had lifted the lids of 45 crates containing looted Roman and Etruscan antiquities including rare and important ancient sarcophagi.

That was embarrassing. Worse, it created speculation that the Free Port could be an unwitting base for illegal trading by terrorists selling off recently plundered Syrian artefacts to fund their activities.

Enter David Hiler, a high-ranking local politician who had retired from public office and subsequently taken on the chairmanship of the Free Port. He is an avuncular character who likes a cigarette as much as he doesn't like dodgy dealers damaging the reputation of his city.

He quickly imposed new rules aimed at flushing out baddies and stopping ill-gotten gains getting in. He introduced a new attitude of openness, along with media briefings, regulatory updates and invitations to visit.

The official guided tour I went on was as interesting as it could be given the limitations the facility insists it operates under. I got to see a room full of boxes of wine, which represented a fraction of the three million bottles stored there (the Free Port has been called the "biggest wine cellar in the world").

I enjoyed a trip to the on-site, independently run conversation studios, where clients take their artworks for a pre-sale MOT. And I popped into a small gallery-type space built among the lock-ups for clients to show and sell their artworks (tax free).

I wasn't allowed to go where I really wanted to, which was one of the rooms leased by its clients. That was out of the question because, my guide told me, the Free Port is simply the proprietor: "The thing is Will, if you rented an apartment from a landlord he would not have the right to enter the space without first having your permission."

That wasn't the approach my old landlord in south London used to take, but then he wasn't Swiss and I didn't hang around. Unlike some of the tenants at the Free Port, who can stay for decades. Which might be good for business, but it does create a hostage to fortune for David Hiler and his colleagues, who insist they have no idea what their rented-out rooms contain.

'A sad and bleak experience'
He is sure, though, that among the million or so artworks behind the metal doors, there are bound to be some with very shady provenance.

It weighs on him. He says he would like the Swiss customs and police to come in and undertake a complete audit of everything in the Free Port so he can know for once and for all what he has under his corporate roof. But that's not going to happen because, he says, "it's not the Swiss way".

I wish they would, if only so I could stand outside the night before to see how many lorries were going to and fro.

I suppose the natural instinct when faced with such secrecy is to be suspicious. I was. But more than that, I found the visit a rather sad and bleak experience. If there are really a million artworks in there, all of which were created to seen and enjoyed, it seems a travesty to the point of immorality.

We all know that art has become a commodity, but I hadn't realised until I went to the Free Port that it has become a tradable stock that never needs to see the light of day.

Those Picassos might never come out, remaining boxed-up in a cold corner as they shift from one owner's capital assets balance sheet to another's.

We can argue all day long about the meaning of art, but surely it isn't that.
Source: BBC


Divided Loyalaties

Bloomberg has an interesting article on the sale of a painting which Sotheby's sold in a private sale to one of the preferred clients for $80 million, who then quickly flipped the painting for$ 47.5 million more . The original seller of the painting who consigned it to Sotehby's now wonders if Sotheby's was working in his best interest. The case is now in court.

A very interesting read.

Bloomberg reports

  • Auction house worked with buyer, seller in contested art deal
  • Sotheby’s filing illuminates secretive world of private sales

On a mid-March day in 2013, a package arrived at the Manhattan penthouse belonging to the family of Russian billionaire Dmitry Rybolovlev.

Inside was a discovery said to be worth upward of $100 million: the Lost Leonardo.

Everyone in the art world knew the story. “Salvator Mundi,” purchased at an estate sale in Louisiana, had turned out to be the work of Leonardo da Vinci.

Rybolovlev wanted it. So that March day, the painting, a depiction of Christ, was quietly conveyed to the Russian’s aerie above Central Park from Sotheby’s, on the Upper East Side. Unpacked there, it let loose one of the most astonishing scandals to hit the art market in decades.

Sotheby’s ended up brokering the sale of “Salvator Mundi” -- but not to Rybolovlev. Instead, the masterpiece went to Yves Bouvier, the billionaire’s long-time art dealer and also one of Sotheby’s most important clients. The price was $80 million, far less than many had expected.

But that wasn’t the end. Within days, Bouvier turned around and sold the painting to the Russian for $47.5 million more.

Divided Loyalties?

Now, three years later, Rybolovlev and the collectors who sold “Salvator Mundi” wonder if they were played, and by whom.

Leonardo da Vinci’s "Salvator Mundi"Source: Fine Art/Corbis via Getty Images
The group that discovered, restored and sold the lost work, which includes the Old Masters connoisseur Robert Simon, have told Sotheby’s they plan to sue, claiming they lost out on many millions. That’s what publicly traded Sotheby’s claimed last week in papers it filed in federal court in Manhattan to block such a suit, saying it fulfilled its obligations.

At the center of this story is one of the thorniest questions in the roughly $60-billion-a-year business of fine art: What do auction houses like Sotheby’s really owe to the people who buy and sell art? The answer is far from clear.

“One of the major conflicts in the art world is that auction houses represent both parties to the sale, and they never really know if their interests are being protected," said Julian Agnew, a London art dealer.

Obligations Fulfilled

Sotheby’s, in court documents, says it didn’t know what Bouvier was up to. The auction house says it fulfilled its obligations and that the Simon group is, in effect, suffering from sellers’ remorse.

Simon and his associates say they were stunned by New York-based company’s recent filing.

"It was clearly filed by Sotheby’s to spin their egregious behavior in the face of media scrutiny rather than for any legal purpose,” the group said in a statement. “We had been participating in good faith efforts to resolve our claims against Sotheby’s in a private, confidential manner. Now that Sotheby’s has chosen to air the dispute publicly, we will correct these distortions and describe the true facts in appropriate court actions."
They have yet to file a response and declined to answer specific questions. Brian Cattell, a spokesman for Rybolovlev, declined to comment.

This article is drawn from information in the Sotheby’s court filing and other court documents, as well as from people familiar with the deal and the art world.

Anonymous Viewing

Sotheby’s, in court filings, says it sent “Salvator Mundi” across Manhattan that March day so the painting could be viewed by Bouvier, who was a potential buyer and wished to remain anonymous. Sotheby’s says it didn’t know Bouvier planned to sell the Leonardo to Rybolovlev.

"This is not a case seeking damages -- our suit is a request for the court to set the record straight and silence any claims of wrongdoing that might be leveled against us," Sotheby’s said in a statement. "The sellers suffered no loss, and certainly suffered no loss due to Sotheby’s."

Rybolovlev, for his part, says Bouvier misled him and should have been acting on his behalf. He has filed a complaint in Monaco, saying Bouvier betrayed his trust by repeatedly charging hidden markups. Bouvier has countered that the pair engaged in hard-nosed business discussions between a seller and a sophisticated repeat buyer willing to pay what the market would bear.

Now, though, attention is shifting to whether Sotheby’s did right by the Simon group, the sellers it was representing.

“If Sotheby’s had the consent of the owners to sell the painting, you can hardly blame them for selling it to someone who flipped or made a dishonest profit from it,” Agnew said. “But if they were in partnership with Bouvier to get him the best possible deal, that’s another matter.”

Sellers’ Interest

Richard Lehun, an attorney specializing in art and fiduciary law, says when an auction house agrees to act on behalf of a seller, as a rule an "agency relationship” is created. That means the auction house is legally bound to act exclusively in the interests of the seller, including getting the best possible sale conditions and price.

"But unless the complaint gets litigated in court or the contracts are made public, we won’t know the extent of the agency relationship between the sellers and Sotheby’s,” Lehun added.

Though Bouvier brought Sotheby’s into the deal, the auction house says it fulfilled its contractual obligations.

Ron Soffer, a lawyer for Bouvier, said Simon and his fellow sellers were art professionals who made a huge profit on a voluntary sale.

"This is nothing more than a story about a company purchasing a painting for an agreed-upon price and then selling that painting for an agreed-upon price,” Soffer said. “Any insinuation beyond that is totally baseless."

Sotheby’s Rainmaker

At the time of the sale in 2013, Sam Valette was a rainmaker in Sotheby’s private sales division and a rising star in the Impressionist and Modern department. His most prized client: Bouvier. Their relationship, though, was a closely guarded secret. Only a handful of staff members were privy to the details of their deals, according to people familiar with the matter.

When the Leonardo came up, the usual rules applied, those people said: Valette was in charge at Sotheby’s, and Bouvier talked only to him.

Unlike auctions, private sales can be sealed with a handshake and a wire transfer. It’s a lucrative business involving networks of collectors and dealers who try to figure out who wants to buy what, and for how much.

At Sotheby’s, private sales steadily climbed from 2008 to the year of the Leonardo sale. The private business accounted for more than 18 percent of the firm’s sales in 2013 and declined to 10 percent last year. According to two people familiar with the matter, Bouvier’s subsequent falling-out with Rybolovlev accounts for much of the decline.

Agreeing on a price without an auction for a work as rare to the market as the “Salvator Mundi” was never going to be easy.

Transfer to Texas

The painting, bought at an estate sale for less than $10,000 and later restored and authenticated, was trucked to Texas in 2012. There, Maxwell Anderson, the grandson of the playwright of the same name, had taken over at the Dallas Museum of Art with the hopes of energizing the Old Masters department. The asking price at the time: $150 million.

Anderson compiled alternatives to an all-cash purchase, including a long-term profit sharing agreement that would kick back royalties for years to come. Donors lined up, but after eight months, the two sides were still far apart on price.

"One of the saddest days of my career was packing it up and sending it back to New York," said Anderson, who started hearing that a Russian billionaire -- he wasn’t sure who -- was interested in the painting. "We just couldn’t raise the cash needed to buy it,” he said.

The seller’s group was distraught.

"We felt beat up," Simon said in an interview before Sotheby’s filed its complaint. "The emotional ups and downs of the last several months had taken a toll on everyone."

Promising Lead

But the group still had a promising lead. The Russian billionaire was interested and had made an appointment to view the painting, according to a person close to the deal. They were still hoping to get as much as $150 million.

Then they were approached by Sotheby’s. Now it appeared they had not one but two potential buyers. Valette told the group he was representing one of Sotheby’s biggest clients, according to a second person close to the talks.

Sotheby’s arranged for their client to see the painting, which it insured for $150 million.

And that’s how “Salvator Mundi” ended up in the penthouse owned by Rybolovlev’s family that afternoon. Bouvier was there, along with Valette from Sotheby’s.

Only later did Sotheby’s learn that Rybolovlev had been talking to the sellers himself. According to its court papers, Bouvier had asked to take over the negotiations and arranged the viewing.

With Bouvier as his representative, Rybolovlev canceled the meeting he had scheduled with the sellers, according to the first person close to the deal.

Members Only

Down to one prospect, the group proceeded to strike a deal. The final negotiations took place in Paris in April 2013. Sotheby’s Valette was among those present.

But the negotiations were handled by others. The collectors relied on one of their own, Warren Adelson, a well-known dealer specializing in American fine art.

For the undisclosed buyer, a new person arrived. Though he is identified in the court filing only as Bouvier’s agent, he was Jean-Marc Peretti, according to the second person close to the deal.

Peretti, largely unknown outside art circles of Paris and Geneva, donned a retro Members Only jacket and spoke only French. He hammered the sellers on price, said the second person close to the deal, pushing it below the $100 million that the sellers had proposed ahead of the meeting.

Emails sent to Peretti’s lawyer weren’t returned. Valette also didn’t respond to requests for comment.

Good Price

Eventually, the price was settled at $80 million, plus a $3 million commission for the auction house. The Sotheby’s staff urged the sellers to take the deal, saying that it was a good price.

Unbeknownst to the sellers, though, a side deal was in the works: Bouvier was negotiating with Rybolovlev independently.

Some details appear in an email produced by Rybolovlev’s lawyers as part of federal court filings to support the Russian billionaire’s own case against Bouvier.

In the undated email, Bouvier wrote to one of Rybolovlev’s representatives that when he offered the sellers $100 million for the Leonardo, it was "rejected without a moment’s hesitation." Driving the price down was “terribly difficult," he continued, but $127.5 million is "a very good deal.” And, for Bouvier, one worth nearly $47.5 million.
Source: Bloomberg 


Millenials and Antiques

Fellow appraiser Marcus Wardell send me an interesting article from KGZZ, a radio station where they also post content in article form. The article discusses the lack of interest for antique furniture and famiy heirlooms by the younger generations, millennials in particular.

Not surprising to many of us who follow the market, but still more confirmation  on the state of the market, and the lack of interest in antique furniture from millennials. It also discusses the impact on the family when items are offered within the family and declined.

A good article to keep in mind when writing a market analysis.

KGZZ reports
As families gather for the holidays, some parents want their adult children to leave with more than new memories. They’re hoping to unload antique furniture, collectibles and family heirlooms. But, many baby boomers are discovering their treasures aren’t valued as much as they expected.

Inside Claudia Kunkel’s garage is a piece of reddish-brown wood supported by a pedestal base.

“This is the old Duncan Phyfe dining room table,” she said.

Less than 3 feet high, it stands tall in her mind.

“There were five of us kids,” she said. “We used to sit at it and do homework. I think the most important memory is that Dad bought it for Mom when they first married and that’s pretty special.”

Kunkel has cherished her parents’ table for four decades, through four states.

“It’s been in every home that we’ve had,” she said. ”It’s gone across the country starting in Iowa, Colorado, California and now Arizona.”

Now that she’s no longer using the table, Kunkel would like one of her three daughters to take it. Her oldest, 33-year-old Susan Kunkel, is her best chance, but no guarantee.

“It’s not exactly my style, but I do appreciate family heirlooms,” she said. “I would like to keep it, I just don’t have the space.”

Professional organizer Andrea Brundage is a professional organizer who works with a lot of baby boomers who are downsizing.

“It’s an interesting transition that I see going on,” she said. “I think Millennials are more disposable, and I think they’ve seen us burdened down with too much stuff.”

When kids reject their parents’ dresser or Grandma’s china, it can cause hurt feelings. Brundage has felt the pain herself. She was sure her daughters would fight over a dining room table but neither wanted it. Brundage eventually sold it at a yard sale to a man who planned to give it to his daughter.

“And, of course, I got very emotional because that’s where the table was supposed to have gone,” she recalled.

A lot of older, brown furniture makes its way to EJ’s Auction and Consignment in Glendale, where owner Erik Hoyer says business is booming.

“Probably tripled in the past five years in the amount of estates we’re doing from the baby boomer generation, because their kids don’t want it or they inherited it and they don’t want it for their houses,” he said.

Behind the showroom where visitors can view items featured in weekly auctions is the processing area.

“We have five moving trucks,” Hoyer said. “We’re picking up a minimum of one estate per day.”

Items are unloaded, sorted and catalogued. Some items require extra research.

“We’re part of an organization that gives us very large databases to be able to research and find out what the fair market value of something is,” Hoyer said.

Delivering the news to clients sometimes requires sensitivity, especially when dealing with antiques — that’s anything more than a hundred years old. Since the recession, Hoyer says, the antiques market has tanked.

“They’re not collecting that stuff anymore,” he said. “The people who are collecting that antique furniture are the ones selling it.”

Another example is porcelain figurines, commonly called Hummels. The collectibles were popular in the '70s, but not today.  Hoyer said a piece that was worth $300-400 in the past will now be grouped in a lot with three or four others and likely sold for around $50.

Hoyer estimates they turn away 60 percent of what they see. Rejection can be tough — as Brundage knows. But, she reminds herself — and her clients — that parents should never burden their children by forcing items on them they don’t want.

“So, when you put it that way to most people, it’s reasonable,” she said.

Back at her garage in Phoenix, Claudia Kunkel gets it, “It’s like I wish somebody would take it, but you can’t feel bad because I had my own tastes as well, you know and they should be allowed to decide what they want in their home and what they don’t in their home.”

If her children don’t want her parents’ oval table with the curved legs, Kunkel admits it might be time to let it go.

“The value is really in the memories, isn’t it?” she said.
Source: KGZZ


December Collectrium Webinars

Collectrium has just sent out a registration email for three webinar for appraisers being held in December. There are some interesting presentations planned, the first on December 1, reviews some of the important features and benefits of using the Collectrium appraisal platform,. the second is an online discussion between Collectrium founder Boris Pevzner and Museum of Modern Art (MOMART) Director Art Alan Sloan about challenges in contemporary museum installations.

The third may be very beneficial to appraisers who wish to expand their practices, entitled Managing Clients and Getting New Business with Collectrium. I will be co-hosting this webinar with Collectrium Senior Collection Advisor Rebecca Rosenfield, and we will discuss the Collectrium service hub, viewing rooms and smart groups.

If you are not an ISA appraiser, you are still welcome to view the webinar, but for the free two subscription to Collectrium, its appraisal platform and auction database of over 6.5 million objects, you would need to be an ISA member. To register for one or all three of the Deecember webinars, follow the REGISTER NOW links in the below block quote.

Collectrium reports on the webinars.
Collectrium specialists and partner guest speakers share best practices and recommendations for managing and handling your collection, securely and privately.

Sign up today, space is limited.

ISA Training Series: Appraisals & Technology, Upgrade your Practice with Collectrium

Thursday, December 1, 1pm EST

Learn how to manage your clients and appraisals efficiently on this leading appraisal management platform:
  • Manage unlimited clients: Manage collection information of multiple clients using granular privacy settings and virtual private viewing rooms, all secured with bank-level encryption.
  • Advanced reporting: ISA members create USPAP-compliant reports from a comprehensive suite of customizable templates.
  • Comparables research: Search over 6.5 million auction results directly in the platform’s proprietary database.
  • Mobile access: Appraisal data can be added and edited in the apps on iOS and Android devices.
If you cannot attend, register below to receive a recording of the presentation after the webinar.

The Greatest Contemporary Art Installations: Introducing the Expertise of our Partner MOMART

Wednesday, December 7, 12:30pm EST

Blood, dead animals, silicon, steel, trash, lead, straw ...while contemporary artists are pushing the boundaries of the medium, fine art experts have to provide public institutions as well as private collectors with a high level of expertise and creativity to ship, store and install their art.

Our partner MOMART, expert in fine art installations and logistics, will share what happened behind the scenes of the monumental Ai Weiwei installation on view at the Royal Academy in London a year ago.

Join us for a revealing conversation between Alan Sloan, Director at MOMART, and Boris Pevzner, CEO of Collectrium, who will discuss the fascinating installation challenges in contemporary art.

If you cannot attend, register below to receive a recording of the presentation after the webinar.

ISA Training Series: Managing Clients and Getting New Business with Collectrium
Thursday, December 15, 1pm EST

Learn how to manage and grow your client base with the leading appraisal management platform.

In this module, ISA Board of Directors past President Todd Sigety will offer an introduction on the client-appraiser relationship and Collectrium Senior Collection Advisor Rebecca Rosenfield will go over ways that the platform connects you with new clients and features that streamlined communications between you and your clients:

  • Gain new clients with Service Hub referrals
  • Securely share collections by using a Private Viewing Rooms
  • Automatically update groups by implementing Smart Groups

If you cannot attend, register below to receive a recording of the presentation after the webinar.


Philanthropy - Museums and Collectors

The Financial Times recently posted and interesting article on collaborative efforts between collectors and museums.  The philanthropic trend is to assist museums in purchases and take a partial ownership in the property as well as owning to hang in homes and purchasing with a museum in mind for a later donation.

This certainly is an opportunity for both fine art advisory and appraisals.

The Financial Times reports.
On the phone from her home in Dallas, Texas, Marguerite Hoffman is explaining how she came to be in possession of Gerhard Richter’s 1968 cityscape “Stadtbild Mü”. “It’s owned two-thirds by the Dallas Museum of Art and one-third by me,” she says. “It used to be a third each with the Rachofskys, me and the museum, but then Howard [Rachofsky] gifted his third to the museum …”

She pauses, and resolves to spare me the fiddly details. “It can get kind of crazy, but it’s worked out.”

At Art Basel Miami Beach on Thursday, Howard Rachofsky will take part in the panel debate “Public Museums and Private Partnerships”, where he will discuss this decade-old collaboration between a group of Dallas-based collectors and the Dallas Museum of Art [DMA]. It is one of a growing number of creative partnerships — forms of philanthropy that go beyond straightforward gifts and bequests — that are blurring the line between public and private art, providing new opportunities and new challenges for public institutions.

In 2005, Hoffman and her husband Robert (co-founder of the National Lampoon magazine, who died in 2006) joined forces with Howard Rachofsky, his wife Cindy, and Deedie and Rusty Rose to bequeath their collections (worth more than $300m at the time) to the DMA. What made the gift so unusual was that the agreement encompassed all future acquisitions, allowing collectors and museum to work collaboratively on honing their holdings and — as in the case of the Richter — co-owning expensive works.

Hoffman tells me that she often buys with the museum in mind. She points to her acquisition of work by the African-American conceptual artist Rashid Johnson as an example: “It might not have been something I would have prioritised aesthetically, but I think it’s really important work and it’s important we diversify our collection.”

While the Dallas collectors’ model is unique, they are not the only philanthropists bridging the divide between public and private in unusual ways. Over on the West Coast, the American-German investor and think-tank founder Nicolas Berggruen has been collecting art with the explicit intention of placing it in a public institution for several years.

“This is a way of doing something for the community, for the museum and for oneself,” he says of the model. The collection he has amassed centres on German artists — Joseph Beuys and Sigmar Polke among them — and California-based pioneers such as Chris Burden.

Unlike the Dallas collectors, Berggruen isn’t interested in hanging the art in his home before its donation. While he is no longer a “homeless billionaire” (the label which dogged him for years due to his itinerant lifestyle), he prefers to keep his growing collection in storage, except for the works out on loan.

It is not yet known which institution will provide a permanent home for Berggruen’s collection. Initially, he collaborated closely with Los Angeles County Museum of Art (Lacma) CEO Michael Govan on the purchases, telling the Financial Times in 2013 that he had “made a commitment to one place”.

Now, Berggruen tells me that while he is still working closely with Lacma (where he is a trustee), his current plan is to split his collection between several institutions, including an art space of his own that he plans to open as part of the Berggruen Institute in Los Angeles. The shift hints at the uncertainties museums face when partnering with private collectors: their intentions may change.

For some, the Dallas deal has demonstrated the pitfalls of private partnerships. When Hoffman sold a Rothko in 2007, and the Rachofskys a Jeff Koons “Balloon Flower” in 2008, local newspapers pored over the sales, questioning whether they were in the best interest of the DMA. It’s a debate that Hoffman is tired of having: “We edit in almost every aspect of our lives if we’re living purposefully and thoughtfully, and collecting is no different,” she says.

Not all private philanthropy hinges on such long-term plans. Sebastien Montabonel is an art consultant who co-initiated Going Public, a programme that brought influential collectors together with state-funded galleries in Sheffield, UK, this year to display works from their private collections and workshop new ways of collaborating.

In Montabonel’s opinion, one of the most innovative public-private partnerships in the UK at present is the Artist Rooms, a collaboration between the dealer-turned-collector Anthony d’Offay, Tate and the National Galleries of Scotland. The deal dates back to 2008, when d’Offay sold his collection of more than 700 works worth £125m to the galleries for £26.5m. D’Offay set out the terms of the acquisition: his collection was to form the basis of a series of Artist Rooms, each dedicated to exploring a single artist. To make this in-depth treatment possible, he has boosted the original collection by purchasing works directly for the galleries over the past eight years.

Montabonel, who firmly believes that, in the future, there will be no clear cut line between public and private art institutions, says that the relationship works because it is equal: “Tate would never have been able to make all the acquisitions without Anthony,” he says. “Everyone will benefit.” He is less convinced by collaborations where the partnership appears to be lopsided, such as the San Francisco Museum of Modern Art’s acquisition of the Fisher Collection (announced in 2009), which required the museum to make significant concessions regarding how the work would be displayed. “Sometimes you can wonder if some of these museums are not public museums but becoming private museums at public expense,” he says.

This tango — the intricacies of who is influencing whom — is one that’s never far from the thoughts of philanthropic collectors. When I ask Michael Wilson, producer of the Bond films and eminent photography patron, about who makes the decisions in his partnerships with public institutions (in the UK, he works most often with Tate), he is defensive: “The idea that I’m somehow influencing [curators] is ridiculous. They give me advice, I give them advice, but I probably get more input from them than they get from me, that’s for sure.”

Marguerite Hoffman
Wilson’s most innovative way of working with public institutions is to sponsor photographers on particular projects, then help museums to acquire the resulting limited edition series. He sponsored Taryn Simon’s travel over a three-year period as she assembled the photographs that would become A Living Man Declared Dead and Other Chapters, which premiered at Tate Modern in 2012. There is no compulsion for museums to accept shows he has helped put together. “I simply say to museums ‘Do you want this?’,” he tells me. Do they ever say no? “It’s happened,” he says with a chuckle.

Given the scale of Wilson’s collection, why not set up a private museum? “I’m not interested,” he says. “With contemporary art collections built by several generations of curators you see a much more diverse collection.”

What private philanthropists hope is that their presence, and their buying power, have the potential to enliven public spaces without overpowering them.

“Personal collections have a lot more idiosyncratic choices within them that make them different to what a museum might do,” says Hoffman, whose collecting interests range from illuminated manuscripts to video art by Rachel Rose and Ragnar Kjartansson.

“Museums are a slice of time and I want the slice that I’m in to be as varied and diverse and robust as possible.”
Source: Financial Times 


ISA Annual Conference Early Registration Ends 11/25

Happy Thanksgiving.

The International Society of Appraisers Annual Conference, Assets 2017, is scheduled at the Palmer House Hilton in Chicago, March 31-April 3.  Early registration ends on November 25, so if you plan on attending, now is the time to register and safe a $$$. Early registration for the conference is only $525 for ISA members and $600 for sister organizations (AAA, RICS and ASA).

The conference looks like it will be another excellent opportunity to hear leaders in the art world present on many diverse and interesting topics. This includes Evan Beard, Lead of Deloitte's Art & Finance Department, and his presentation is titled An Arching Perspective: What's Trending Now, Millennials, Minorities and Millionaires. There is also a scheduled panel discussion, titled Working with Bricks and Mortar: Developing Relationships with Gatekeepers, and includes Maggie Reynolds, Senior Fine Art & Collections Specialist, Chubb Personal Risk Services, William Deitch, Attorney and Counselor at Law, The Estate Planning Law Group, Jennifer Draffen, Executive Director for Exhibitions and Registration, The Art Institute of Chicago, and moderated by Steven Roach, ISA CAPP.  I think these two presentations will be worth the price of admission on their own.

Also, before the conference, on Thursday and Friday (March 30 & 31), ISA will offer How to Be an Effective & Successful Appraisal Expert Witness, with attorney James J. Mangraviti, Jr.. Click HERE for more information on the 2 day program. It is only $795 for ISA members and $895 for non-members. This is a great value for this important 2 day program. From what I understand, registration has been strong, so make sure you register soon before it is full.

ISA reports on the annual conference program

Saturday, April 1, 2017
8:00 - 9:00 am
Coffee and Breakfast
9:00 - 9:15 am
Opening Remarks: Christine Guernsey, ISA CAPP, President
9:15 - 10:15 am
Keynote Speaker
John Dorfman, Editor-in-Chief, Art & Antiques Magazine

Masonry of the Market: Analyzing What Binds it Together

Now more than ever before, the inspired collector has information about art and antiques around the world. Technology and new venues have created unlimited opportunities for buying and selling these works so that individuals are more actively involved. John Dorfman will discuss his experiences, providing examples of how this trend can be beneficial to collectors and appraisers.
10:15 - 11:15 am
Evan Beard, Lead of Deloitte's Art & Finance Department

An Arching Perspective: What's Trending Now, Millennials, Minorities and Millionaires

According to recent statistics, the millennial generation is the largest active group in the U.S. labor force that will inherit approximately $30 billion in future years. While they are gearing up to be significant buyers in the art and design markets, appraisers are curious about their collecting interests and how their tastes and buying habits differ from previous generations. This informative and in-depth talk will explore the question of “wealth vs. worth.” Evan Beard will address the challenges of being an appraiser in the current art ecosystem as well as how Millennials, Gen-Xers, Baby Boomers, Minorities and Millionaires affect different global markets.
11:15 - 11:45 am
Coffee Break
11:45 am - 12:45 pm
Maggie Reynolds, Senior Fine Art & Collections Specialist, Chubb Personal Risk Services
William Deitch, Attorney and Counselor at Law, The Estate Planning Law Group
Jennifer Draffen, Executive Director for Exhibitions and Registration, The Art Institute of Chicago

Working with Bricks and Mortar: Developing Relationships with Gatekeepers

With moderator, Steven R. Roach, JD, ISA CAPP, this panel will explore the most effective means of connecting with those "gatekeepers", who refer business to appraisers from the insurance, estate and museum industries. This experienced panel will identify how to develop ongoing relationships and become a "preferred and referred appraiser". The discussion will provide a comprehensive framework for your appraisal practice, addressing what qualifications are required, offering insights into how these industries interact with one another.
12:45 - 1:45 pm
Lunch on own
2:00 - 3:00 pm
Joshua Kaufman, ESQ., Art Law Expert, Venable, LLP, Head of Copyright and Licensing

Examining the Façade: Breaking through Appearances

How does case law deal with fakes and forgery in the art world? How do we respond as appraisers when the history of ownership casts a shadow of doubt on the authenticity of an item we are appraising? Kaufman discusses these issues offering advice on when to connect to lawyers who deal with provenance and other experts, who can shed light on authenticity.
3:00 - 3:30 pm
Networking Break
3:30 - 4:30 pm
Pip Deely, Entrepreneur, Free-lance Writer and Art Advisor, author of "How Data Will Keep Transforming the Art Business"

Remodeling Business for the Future: Utilizing New Tools of Technology

In the face of an explosion in number of apps, databases, and imaging tools currently on the market, as well as a larger trend towards digital property management in general, Deely will take a look at exciting new applications of technology which can enhance your appraisal process. Topics will cover the latest developments in 3D scanning using your cell phone, virtual reality and visualization, collection management and the impact and potential of price databases.
4:30 - 6:30pm
Committee Meetings

Sunday, April 2, 2017
8:00 - 9:00 am
Coffee and Breakfast
9:00 - 10:00 am
Leila Dunbar, ISA AM

From The Vault: Organization, Methodology and Valuation for Appraising an Archive

With so many archives now being donated, sold or inherited, it is more important than ever to understand the types of organization, methodology and valuation that can be involved.

This presentation will cover the process of recognizing different types of archives, handling various collections containing both high and low value objects; working with archivists, curators and collectors; dealing with supporting documentation; identifying differences in retail replacement and fair market valuations, when to apply discounts, and a discussion of typical IRS issues.

Specific examples from past appraisals will be used to illustrate the topics covered.
10:00 - 10:30am
Coffee Break
10:30 - 11:45 am
ISA Member Panel:

Perri Guthrie, ISA CAPP (FA)
Judy Martin, ISA CAPP (AFDA)
Diane Marvin, ISA CAPP (AFDA)

Moderator: Sanjay Kapoor, ISA (AFDA)

The Nuts and Bolts of Appraising: Dealing with Challenging Clients, When and How to Authenticate, Marketing Techniques and more.

Our ISA CAPP Panel will share their experience and expertise in developing best practices and how to manage imperfect and/or difficult situations. We know you have questions. Hear the answers!

Pre-submitted "how-to" questions from ISA members will be discussed in detail.
11:45 - 1:00 pm
Lunch and Learn
1:00 - 2:15 pm
Break- Out Sessions

Bridging the Gap in Understanding Fakes and Forgeries
Antiques, Furnishings + Decorative Arts
Fine Jewelry and Time Pieces

Alexander Eblen, G.G.
Director of Fine Jewelry and Timepieces, Leslie Hindman Auctioneers

This session will address authenticity issues that appraisers come across when examining jewelry. Alexander Eblen will focus on when it is beneficial to seek out jewelry specialists and gemological experts to help identify imitations and treated stones. Examples of these instances will be explored throughout the presentation as well as what to expect when working with gem labs throughout the world.
Fine Art
The Benton Fake Game: A Glimpse Into the World of Art Forgery

Dr. Henry Adams
Professor, Case Western Reserve, Cleveland, OH

Henry Adams, author of four books on Thomas Hart Benton will describe his 30-year struggle to identify forgeries of Benton's work. When he first became involved with providing expertise, fully half the paintings he was shown were forgeries, and the story of how these forgeries were made and circulated contains useful lessons for anyone involved in art-dealing or appraising.
A Quick Start Guide to Evaluating Estates and their Contents

James Jackson
Jackson's Auctions, Cedar Falls, IA

For those who are currently working or desire to work in the field of general appraisals and estate liquidation, the question may arise, "where do I start?" James Jackson presents current front-line experiences and examples of covering the "who, what, where, when, why, and how" of dealing with estates in today’s market. Questions pertaining to provenance and certificates of authenticity will be addressed along with examining the current state of the market. Defining items of importance and their comparables will specifically be discussed.
2:15 - 2:45pm
Networking Break
2:45 - 4:00 pm
Break- Out Sessions

Overcoming Barriers: New Perspectives for Challenging Comparables
Antiques, Furnishings + Decorative Arts
Libby Holloway, ISA CAPP (AFDA)
Jacqueline Snyder, ISA AM
Fine Art
Meredith Meuwly, ISA CAPP, Director of Education (FA)
Lisa Lowy, ISA AM
Mickey Logan, ISA CAPP (AFDA and Estate Sales)
Carol Matestic ISA AM

Three separate breakouts led by highly experienced ISA instructors and their students will delve into the process of finding the most appropriate comparables when appraised items are unique, have no market or are created regionally by an unknown artist or company. Bringing in ISA members to share real appraisal items with which they have struggled while the instructors will explain alternative comps and sources to make this step less difficult.
4 - 4:15pm
Networking Break
4:15 - 5:30 pm
Break- Out Sessions

Columns and Buttresses of the Business: Considering Specialties
Antiques, Furnishings + Decorative Arts
Art Deco Jewelry, What's Old is New Again

Ben Macklowe
Macklowe Gallery, New York, New York

Back by popular demand, Macklowe will discuss Art Deco jewelry. Known as Style Moderne, Art Deco was most desired against the backdrop of the roaring 1920’s. We will learn how jewelry pieces changed in form and function throughout the years and identify key stylistic elements associated with the Art Deco movement. Macklowe will expose market collecting trends.
Fine Art
Hiding in Plain Sight: Why Most Fakes and Forgeries Go Undetected

James Martin
Orion Analytical, Williamstown, MA

Most of us do not carry an array of scientific instruments when we approach the objects of our appraisals. Trusting our eye, personal knowledge and the data provided by clients, may limit our ability to accurately identify objects. They may require additional verification by experts in order to proceed with due diligence. Science provides a specific path that James Martin, will discuss. His firm provides this expertise with the most advanced forensic methods available today.

This presentation will highlight the toolbox scholars and scientists use to detect fakes and forgeries, and the three reasons why the toolbox often is not used: need, speed, and greed.
Selling out the House - the Estate Sale Business and How to Avoid Mistakes!

Carol Meyers Madden
Expert and writer for EstateSalesNews.com

Expanding your business through estate sales; or looking for additional solutions to re-frame your already existing estate sale business? Don’t miss this lively and informative session about the Seven Major Pitfalls of Estate Sales and how to avoid them. You will be guided through best practices for Estate Sales from education and training, transparency, and networking to working with difficult clients, contracts, pricing and much more.
5:30 - 7:30pm

FAE Networking Event

Monday, April 3, 2016
8:30 - 9:00 am
CAPP Appreciation Coffee
9:00 - 9:30 am
ISA Business Meeting
9:45 - 11:00 am
2018 and the New AQB Qualified Requirements: What They Mean for the Future of Your Appraisal Business

Speakers TBA
11:00 am - 12:30 pm
Awards Brunch
Source: International Society of Appraisers