The market for contemporary art is more resilient than it was three years ago, according to Dallas- based collector Howard Rachofsky.
The former hedge fund manager, who with his wife Cindy is one of the art world’s best-known buyers, spoke after auctions showed some contemporary prices returning to their peak levels, defying nervousness in the wider economy.
“There’s so much wealth in the world looking for alternative assets,” said Rachofsky. “The market is broader than it was. It’s grown with new buyers from Asia, Eastern Europe and the Middle East. A number of players have come in from the financial industry and they look for value.”
Wealthy individuals are investing in contemporary works as a hedge against economic uncertainty, dealers said. Sotheby’s and Christie’s International’s June series of contemporary art auctions in London raised 220.6 million pounds ($352 million), the second-highest total ever for the U.K. capital.
Still, the market isn’t fully back to the boom levels of 2007 and mid-2008, Rachofsky, 67, said in a telephone interview.
“Some prices are high and comparable to former values,” he said. “It’s not universal. There isn’t a mania out there. If the financial markets go into crisis, there will be deflation in art as well. There will be a pause.”
Dealers at last month’s Art Basel fair in Switzerland reported plentiful sales in the $200,000 to $2 million range. Buyers spent a record 108.8 million pounds at Sotheby’s on June 29, when the little-known Duerckheim collection of 1960s and ‘70s German art fetched 60.4 million pounds, double the estimate. Works by Sigmar Polke and Georg Baselitz set auction records for the artists at 5.8 million pounds and 3.2 million pounds apiece.
Koons Market
“Those prices showed that the Polke and Baselitz markets had been quiet and underpriced,” Rachofsky said. “The Jeff Koons market is still off right now, though. Prices aren’t at the level of 2008.”
A 1980s sculpture of 18 basketballs in a vitrine by Koons failed to find a buyer at Sotheby’s (BID) against a low estimate of 600,000 pounds. In June 2008, during the final months of the boom, Rachofsky sold the artist’s 1995-2000 sculpture “Balloon Flower (Magenta)” at Christie’s for a record 12.9 million pounds to finance other purchases. Auction prices for heavily traded names such as Koons slumped by as much as 50 percent during the crisis.
