Tags: griffin | art | prices

Art Prices Break World Records

By Tuesday, 01 March 2016 08:24 AM Current | Bio | Archive

Most art dealers and investors thought prices for modern abstract paintings could not go much higher, but billionaire art collector and hedge fund entrepreneur Ken Griffin proved them wrong, when, according to Baer Faxt, last fall, he paid the David Geffen Foundation $300 million for Willem de Kooning’s 1955 oil painting Interchange (also known as Interchanged) and $200 million for Jackson Pollock’s 1948 Number 17A.

A half billion dollars shatters the previous record for the most expensive private art sale in history.

According to Bloomberg’s Billionaires’ Index, Ken Griffin is worth between $5.6 and $7 billion, a pittance when compared to Bill Gates’ $81.9 billion net worth, but Griffin’s wealth is in the top 1 percent of the nation and he is a serious art connoisseur, real estate investor and philanthropist.

In December 2015, the 47-year-old Griffin donated $40 million to New York’s Museum of Modern Art and he has feverishly been buying art and real estate for record-setting prices over the last few years.

In February 2015, he paid $46.4 million for a 10-foot-tall painting by Gerhard Richter at Sotheby’s, an auction record for the German artist, who, according to The Guardian, calls the art market “hopelessly excessive” with prices that do not reflect quality. Yet, Griffin is pleased with his purchase and rumor has it he wants to buy more masterworks.

Griffin’s spending set many world-records in 2015. According to the Daily Mail, he allegedly purchased for $200 million three floors at 220 Central Park South, in New York (dubbed the billionaire’s bunker, which is still under construction); $60 million for a Miami Beach penthouse at the prestigious 18-story oceanfront Faena House; and approximately $30 million for two floors at Chicago’s Waldorf Astoria, where his hedge fund firm Citadel is based. Griffin also owns impressive properties in Aspen, Palm Beach (worth $130 million), a beachfront property in the Hualalai resort in Hawaii (purchased for $17 million) and other properties.

Despite their record-setting sale prices, Griffin’s new purchases were good investments for past owners. In 1989, de Kooning’s Interchange set its first record, when it sold for $20.7 million. According to Artnet Price Database, de Kooning’s most recent auction record stood at $32 million, with the 2013 sale of "Untitled VIII" hammered down at Christie’s. The Griffin sale tops that record by over 900 percent!

Until the Griffin sale, Jackson Pollock’s "Number 19" set a world record in 2013 at $58.3 million at Christie’s. The 2015 Griffin sale raised Pollock’s overall record by more than 225 percent. Up until the Ken Griffin art transaction with Geffen, the most expensive private art sale was made by the Qatar Museum, which paid $300 million for Paul Gauguin’s "When Will You Marry?"

Griffin paid Geffen $500 million for two paintings.

Strategically placed funds into great art commonly turns a good profit. The latest sale of de Kooning’s Interchange resulted in a profit of $279.3 million over a 27-year period, or $10.34 million in profit every year since 1989. Few investments reap that high a reward.

After his purchase from Geffen, he hung the de Kooning and Pollock paintings at the Art Institute of Chicago in September 2015, where Griffin has been a trustee since 2004, and has helped build the museum’s Modern wing.

No one knows for sure why David Geffen sold part of his art collection (rumored to be worth almost $2 billion), but it is no surprise he accepted Griffin’s offer of $500 million for the Pollock and de Kooning. Many investors believe the economic environment will slide into a recession soon, and if that pans out, Geffen probably is smart to sell art and homes before a decline takes place. He recently sold his Malibu beach house for $85 million, according to Variety and he donated $100 million to Lincoln Center, to renovate its Avery Fisher Hall and have it renamed David Geffen Hall.

Twenty years ago, connoisseurs who had $10 million to donate and vied for attention and recognition, easily could convince an art institution or a theater to name a wing or hall after them, but that amount no longer impresses museum directors.

The new norm is to donate millions in assets before a wing or hall is named after a donor. Playing at the top gets expensive, but if an investor has enough money, can predict future trends and has a discerning eye, investment profits might continue to skyrocket and set new trends.

Patricia Jobe Pierce is a freelance writer, art historian, art dealer-consultant, certified AAA appraiser, public speaker, photographer and American art authenticator for museums, auction houses and collectors. She graduated from Boston University with a BFA in 1965, is owner and director of Pierce Galleries, Inc. in Nantucket and Hingham, Mass., and is author of many works, including, "Art Collecting & Investing: The Inner Workings and the Underbelly of the Art World." For more of her submissions, Click Here Now.

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Tuesday, 01 March 2016 08:24 AM
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