By Reed V. Horth, for CBPMag.com and Robin Rile Fine Art
The New Yorker’s award-winning columnist Malcolm Gladwell posits in his 2008 book “Outliers: The Story of Success” that, today’s world’s wealthiest man, Mr. Carlos Slim Helú, ranks only as #31 on the all-time scale of wealthiest human in recorded history.
Only.
As of 2008, Mexico’s Carlos Slim Helú had $72.4B USD (2014 rank #1 at $73B). A significant sum to be sure. However this total less than ¼ of the reported $318.3B USD estimated for American industrialist John D. Rockefeller (1839-1937). Rockefeller was, and remains, the wealthiest human this world has ever known, on a list which includes Czar Nicholas II, William Henry Vanderbilt, Marcus Licinius Crassus (ca. 115 B.C.-53 B.C.), William II of England (c. 1056-1100) and Cleopatra (69 B.C.-30 B.C.).
It is perhaps fitting that Rockefeller’s New York namesake, Rockefeller Center, houses Christie’s one of the two major auction houses which annually duel with uptown rivals Sotheby’s for the chance to sell the highest-priced artwork in history.
New York was Rockefeller’s city. A city of wealth. To many extents, it still is.
Today, we have a bumper crop of new wealthy cognoscenti, collectively known as HNWI or UHNWI (High Net Worth Individuals or ULTRA HNWI), descending New York’s auction houses to purchase some of the most expensive items ever purchased in history, namely Art. Christie’s has been a part of several of the highest sales, including the 2006 sale of Gustav Klimt’s masterpiece “Portrait of Adele Bloch-Bauer” for a then-record of $135M USD (Now translated to $155M USD). Of the top 50 highest-priced paintings ever sold, Sotheby’s (London & New York) holds the slight edge, having produced 17 of the highest prices. Christie’s (London & New York) has produced 13 highest prices, and a mixture of gallery and private sales compose the remaindered 20.
According to Ileana van der Linde, Principal of Capgemini who, in conjunction with Merrill Lynch compiles an annual report on Wealth, “Art has emerged as the most popular category of ‘Passion Investments’ for investing for financial gain.” She further noted, “A significant percentage of Financial Advisors, 29.8%, responded that art, of all Investments of Passion, was the most widely considered as another form of financial investment— the wealthy are investing in this category for financial benefit. For advisors to European investors, the percentage was even higher at 37.4%.” [1]
“Passion Investments [including art] comprise approximately 33% of HNWIs and UHNWIs overall holdings”.
~ 2010 Capgemini HNWI Research
So, what “passion” drove someone to expend $135M (or more) for a piece of artwork? The reasons can vary from a simple “because I can”, to extensive tax savings through donations and bequests. In 1936, American financier Andrew Mellon donated nearly his entire art collection, as well as the funds to build what became the National Gallery of Art, to Washington D.C. In return, Mellon, who ranked as #6 on Gladwell’s chart of history’s wealthiest with an estimated $188.8B USD, received a huge estate tax break after he passed away the following year, 1937. [2] Obviously, this case represents a fraction of the reasons HNWI and UHNWI would purchase art, another is investment.
“Le Rêve” was Pablo Picasso’s 1932 depiction of his 17 year-old lover Marie-Thérèse Walter. The work was purchased in 1941 by an American family, Victor & Sally Ganz, for $7000. The Ganz collection, which also consisted of marquis works by Jasper Johns, Robert Rauschenberg, Frank Stella, and Eva Hesse, and several important Picasso, fetched $207M USD in a record-setting sale at Christie’s in 1997. At that sale “Le Rêve” was sold for $48.4M USD to Austrian Wolfgang Flöttl who in turn sold it to casino magnate Steve Wynn for an estimated $60M USD. After seriously damaging the painting in 2006 with an errant elbow, Wynn finally sold the painting to Hedge fund guru Steven A. Cohen in 2013, for $155M USD. From the 1997 Ganz Sale till 2013, the value of “Le Rêve” rose 220%. Further, Wynn successfully lobbied the Nevada state legislature that his collection should be sale-tax exempt as it is prominently on display in his casinos and hotels for educative purposes (Despite the fact that there is an admission fee for entry). [2] This is an example of both investment and a gain on tax-liabilities by leveraged art assets.
UPDATED 2/19/15: In 2012, Paul Cézanne’s “The Card Players” sold to the Qatari Royal family for an extraordinary $259M (Now approximately 294.4M). It is no secret that the world has a dearth of individuals who would be willing or capable of making this an “investment” for the Qatari royal family, at least in the short term. Therefore, it is safe to assume that other motivations were at play. (Perhaps pride in being #1?) However, perhaps in an effort to buttress their claim to the #1 spot, it is rumored that they were the purchasers of Paul Gauguin’s “Nafea Faa Ipoipo” (When will you Marry?) the 1892 masterpiece from the Rudolf Staechlin family collection, for a reported $300M in February 2015. While both works are undoubtedly masterpieces, it is likely these purchases represent the oil-rich nation’s efforts to become the biggest player in the region (if not the world) for major art. The Emir’s 28 year old, Duke-educated daughter, Sheikha Al Mayassa bint Hamad Bin Khalifa al-Thani (b. 1983), is reportedly masterminding the collecting spree as the head of the Qatar Museums Authority. Given her high profile team consisting of Christie’s alumnus Edward Dolman, Roger Mandle from the Rhode Island School of Design and Lionel Pissarro (grandson of Camille), as well as the construction of celebrity-architect I.M. Pei’s Museum of Islamic Art, Doha, perhaps this is her effort to place a stamp on the region through conspicuous excess and the resultant press coverage it inevitably brings. [3]
This is the ultimate reason someone would spend for Art… Pride in owning nothing less than the very best…Until the next record is set.
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THE TOP 10 MOST EXPENSIVE PAINTINGS EVER SOLD.
10. Boy with a Pipe by Pablo Picasso
Adjusted price: $129 Million | Original price: $104.2 Million
Painted by Pablo Picasso in 1905, The Greentree foundation (the John Hay Whitney family) sold it on 4 May, 2004 through Sotheby’s New York.
9. Dance at Le Moulin de la Galette by Pierre-Auguste Renoir
Adjusted price: $141.5 Million | Original price: $78.1 Million
Painted by Pierre-Auguste Renoir in 1876, Betsey Whitney (wife of John Hay Whitney) sold this painting to Japanese industrialist Ryoei Saito in on 17 May, 1990 through Sotheby’s New York.
8. Three Studies of Lucian Freud by Francis Bacon
Adjusted price: $142.4 Million | Original price: $142.4 Million
Painted by Francis Bacon in 1969, An anonymous seller sold it on 12 November, 2013 to Elaine Wynn (ex-wife of Steve Wynn) through Christie’s New York.
7. Portrait of Dr. Gachet by Vincent Van Gogh
Adjusted price: $149.5 Million | Original price: $82.5 Million
Painted by Vincent van Gogh in 1890, Jewish financier Siegfried Kramarsky family sold this painting to Ryoei Saito on 15 May, 1990 through Christie’s New York.
6. Portrait of Adele Bloch-Bauer I by Gustav Klimt
Adjusted price: $155.8 Million | Original price: $135 Million
Painted by Gustav Klimt in 1907, Jewish refugee Maria Altmann (nee. Bloch) sold this painting to Ronald Lauder & Neue Galerie on 18 June, 2006 through a private sale arranged by Christie’s. Mrs. Altmann successfully reclaimed 5 of her families paintings, including this work, after the Art was stolen by the Nazis in 1938.
5. Le Rêve by Pablo Picasso
Adjusted price: $155.9 Million | Original price: $155 Million
Painted by Pablo Picasso in 1932, American casino magnate Steve Wynn sold it on 26 March, 2013 to Hedge Fund guru Steven A. Cohen through Private Sale.
4. Woman III by Willem deKooning
Adjusted price: $159.8 Million | Original price: $137.5 Million
Painted by Willem de Kooning in 1953, Music Producer David Geffen sold this painting to Hedge Fund guru Steven A. Cohen on 18, November 2006 through Private Sale.
3. No. 5, 1948, painted by Jackson Pollock
Adjusted price: $162.7 Million | Original price: $140 Million
Painted by Jackson Pollock in 1948, Music Producer David Geffen sold this painting to Mexican financier David Martinez on 2 November, 2006 through Private Sale.
2. The Card Players by Paul Cézanne
Adjusted price: $269.4 Million | Original price: $259 Million
Painted by Paul Cézanne in 1892/93, Greek businessman George Embricos sold it in April 2012 to the Royal Family of Qatar through Private Sale.
1. “Nafea Faa Ipoipo” (When will you Marry?) by Paul Gauguin
Adjusted price: $300 Million | Original price: $300 Million
Painted by Paul Gauguin in 1892, the family of Swiss businessman Rudolf Staechlin sold it in February 2015 reportedly to the Royal Family of Qatar through Private Sale. It is the highest amount paid for any single object in recorded history.
[1] http://artvest.com/high-net-worth-individuals-hnwis-are-approaching-art-for-investment-fall-2010/
[2] “All the Money in the World” New York, 2007. Ed. by Bernstein, Peter & Swan, Annalyn. Pgs- 226-228.
Photo Credits:
[1] http://www.the-athenaeum.org/art/full.php?ID=6371
[2] http://en.wikipedia.org/wiki/No._5,_1948
[3] http://en.wikipedia.org/wiki/Woman_III
[4] http://en.wikipedia.org/wiki/Le_R%C3%AAve_%28painting%29
[5] http://www.neuegalerie.org/collection/Austrian/Fine%20Arts?page=1
[6] http://en.wikipedia.org/wiki/Portrait_of_Dr._Gachet
[7] http://www.mirror.co.uk/news/world-news/francis-bacon-three-studies-lucian-2786348
[8] musee-orsay.fr
[9] http://wtc.11.9.googlepages.com/picasso-boy-with-pipe.jpg
Reed V. Horth, is the president, curator and writer for ROBIN RILE FINE ART in Miami, FL. He has been a private dealer, gallerist and blogger since 1996, specializing in 20th century and contemporary masters. www.robinrile.com
All content ©2015 ROBIN RILE FINE ART. Any unauthorized reproduction of images, text or content is strictly prohibited.
