Collectors Upping the Bid

John Varoli, Russia Now

"Ilya Kobakov’s work is viewed as one of the best examples of “homo sovieticus”. This drawing, from 1969, is untitled."

Russians would rather buy art that has stood the test of time and is a financial asset.

The recent rebirth of private art collections in Russia has been one of the most significant cultural and social movements in the country over the past 20 years. Before the Bolsheviks seized power in 1917 and nationalized private property, Russia was home to some of the finest private art collections in the world.

Vyacheslav Kantor, one of Russia’s richest businessmen (with interests in fertilizers and real estate), has spent the past decade building up a collection of 20th century artists, including works by modernists Marc Chagall, Chaim Soutine and Amedeo Modigliani, as well as postwar legends Mark Rothko and Ilya Kabakov.

In the past decade a new elite has eagerly returned to old collecting traditions, motivated by a number of factors ranging from a need to decorate the home, aesthetic appreciation, art as an investment and a desire to acquire the trappings of power and prestige.

The Russian onslaught on world art markets began when billionaire Viktor Vekselberg scooped up the Forbes Faberge Collection in early 2004, just months before it was to be auctioned off at Sotheby’s. That purchase, astonishing many, cost him more than $100 million, and the final figure has never been revealed.

While European and American collectors have long dominated buying at the major auction houses in London and New York, the appearance of wealthy Russian buyers since 2004 has been one of the most talked about topics on the international art market. The global economic crisis has dealt a strong blow to the Russian economy, and many Russian millionaires and billionaires struggle to avoid the abyss, but few are parting with fine works of art amassed during the economic boom. In many cases, we will never know the truth as to the extent of Russian art collecting. Many deals are done privately and behind closed doors.

But officials at Sotheby’s and Christie’s agree that Russian buyers have a strong presence on nearly all major art markets—from Old Masters to Impressionist and Modern, British 19th century art, and, most recently, on the Postwar and Contemporary art market.

Even when Russians don’t go home with the prize after an intense bidding war, their fighting spirit helps send prices soaring. These works sell for anything from $100,000 to $30 million.

Of course, it’s no surprise Russians dominate the market for classical Russian art, defined as anything before the early 20th century. But in terms of dollars spent, perhaps the biggest target of their interest has been the Impressionist and Modern art market. The richest Russians have proved willing to spend up to $20 million for a painting, say dealers. Nothing near that amount is seen on other art markets, with the exception of Faberge’s 1902 Rothschild Egg that sold to Moscow collector Alexander Ivanov in November 2007 at Christie’s for almost $18 million.

“There’s very strong interest in Impressionist and Modern masterpieces among the wealthiest people in Russia,” said Marina Goncharenko, a Moscow art collector, and director of GMG Gallery. “They’d rather buy art that has stood the test of time and which is a serious financial asset.”

“They’re more likely to spend millions of dollars on a work by an easily recognizable, well-known Impressionist or Modern artist, than spend $100,000 on a work by a little-known contemporary artist,” said Goncharenko.

Kantor’s collection includes Modigliani’s “Seated Girl in a Black Dress” (1918), bought at Sotheby’s in 2000 for $15.6 million on a top estimate of $12 million; and Soutine’s “Le Boeuf Ecorche,’’ (1924), which sold in February 2006 at Christie’s for £7.8 million ($13.8 million at the time) on a top estimate of £4.8 million. Until February 2007 it held the record as the most expensive Soutine painting sold at auction.

Kantor also set the record for leading Russian Postwar artist, Ilya Kabakov, when in 2008 he bought the artist’s “Beetle’’ (1982) at Phillips de Pury & Co. for £2.93 million ($5.84 million at the time), an auction record for Russian postwar art.

His collection forms the Museum of Avant-Garde Mastery in Geneva, where he has a home. However, Kantor is just one of only a handful of major Russian collectors who has gone public. Many do not speak about their art holdings, citing privacy and security issues.

Billionaire Roman Abramovich is widely considered another important Russian collector, believed to have spent $120 million in May 2008 at Sotheby’s and Christie’s to buy a painting by Lucian Freud, and one by Francis Bacon. Abramovich never confirmed the purchases.

Dealers and gallery owners point out that the increase in art sales between 2004 and 2008 in Russia was in large part due to a booming real estate market, and the need for the rich to decorate these new flats and homes.

With the real estate market moribund and the Russian government forecasting it could be another three years before the economy returns to 2008 levels, the slump in Russian art purchases will probably last until then.

But despite the current economic difficulties the fact remains that wealthy Russian collectors will remain a priority audience to be courted by art dealers and international auction houses.

Russia Now

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