Sale-rooms
For love or money
Peter Watson
Art auctions are a source of endless fascination these days. Like the divisions in the Alliance, they are not quite frivolous and not quite serious. Like the royal Sloanes, what goes on in the sale-rooms is attractive to look at but not quite worth the attention we pay to it.
This week has been no exception. Mon- day, with the big Van Gogh sale at Christie's, and the British Rail Pension Fund's Old Master print sale at Sotheby's, was like Wimbledon in the good old pre-rain days, with Boris and Martina on form and on court at the same time. On top of that we've had the literary works of Max Ernst and, on Thursday, the possessions of the great joker (the Jimbo Connors of art?), Rend Magritte. I counted at least 40 Japanese in the main hall of Christie's on Monday night, a contingent that was outnumbered only by those other inscrutables, the press. For most of the evening, the Japanese took little part in the hype. True, a few of them, waving gold pens and paper fans, chased their own Impressionist, Seiki Kuroda, up to £1.76 million, more than five times the estimate. But the main prize, Van Gogh's `Le Pont de Trinquetaille', went on this occasion to a European, for £12.65 million.
The press did join the hype, however, reporting doggedly the familiar sale-room gloss in the form of auction records broken and millions amassed. What no one pointed out was that 24 of the 78 lots, a third, were knocked down for less than the estimate and that the sellers of the Van Gogh, the heirs to Siegfried Kramarsky, were actually disappointed since, accord- ing to gossip inside Christie's, they were looking for nearer to £14 million.
The truth is that, in stock market parl- ance, this was a 'profit-taking' sale: after the recent very high prices for good Im- pressionists, a number of collectors and dealers took the opportunity to off-load some not-very-good things (including a Modigliani portrait which looked as though its lips had been stuck together with superglue). This accounts for those 24 works that didn't do well and it also explains why one 79th Street dealer de- scribed the sale as 'a bunch of [expletive deleted]' . It was a good sale but not that good.
A much more important stock market lesson was being learned up the road at Sotheby's. There, Mr Maurice Stonefrost, speaking after the sale of the British Rail Pension Fund's Old Master prints, express- ed himself well satisfied with the total of £2,048,013, which, he said, was three per cent better than the Retail Price Index. Either Mr Stonefrost had not done his homework or this was as good an example of Mandy-Rice-Davies-speak (`he would, wouldn't he') as we are likely to get this season. For although the prints sold well, according to current prices, they per- formed very badly indeed as investments. They didn't even do that well as prints, looked at in the long term.
Over the last ten or 12 years (the period during which the Fund has been investing in art), Old Master prints in general have outstripped the RPI by 132 per cent — i.e. more than double, and vastly better than the performance of the British Rail prints. But even if the Fund had chosen better prints it still wouldn't have been that good an investment compared with the stock market. Ordinary shares (with income reinvested as is normal for a fund) have done twice as well as Old Master prints and four times as well as British Rail's prints.
This is not to say that all of the Fund's art investments will do so badly. Old Master prints are a rarefied and difficult field (there were fewer than a dozen buyers at Monday's sale, all dealers, compared with two or three times that number at Christie's, many of whom were private collectors). Also, Old Master prints are particularly unsuitable for corporate buying. Things like the importance of margins, or 'burr' (smudgy areas unsightly to the uninitiated but which show that an impression is early, and therefore valu- able), are hard to explain to busy fund trustees. And the curator of the collection had some difficulty interesting the Fund in making acquisitions after 1979, so that the collection was abandoned in midstream, becoming thereafter more an agglomera- tion of bits and pieces that didn't hang together intellectually (like the Alliance) than a collection proper.
The Fund's Impressionist and Old Mas- ter paintings (Monets, Renoirs, Picasso's `Blue Boy') will no doubt do much better when they come on to the market in the next couple of years. Still, British Rail's experience does show the pitfalls of collect- ing for financial reward only. The best advice remains to look upon the 'income' from art investment as the pleasure of having something to look at every day, or to touch. Corporations simply can't do that.
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