January 2007

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Art World Fever

By Janet Allon

Now a multibillion-dollar industry, art—and especially contemporary art—is the topic du jour among New York’s wealthy and prominent. Everyone, it seems, is chasing what Warhol called “money on the wall.”

In the mid-’90s, early in her career as an art advisor, Kim Heirston says she counseled her client, Italian collector Massimo Lauro, to buy a sheep preserved in formaldehyde for about $45,000. Few people at the time had the prescience to know that Damien Hirst, the young British sculptor who once told the press he envisioned creating an entire zoo of dead animals, would become one of the hottest artists of his generation. Last spring, Hirst’s sheep in formaldehyde—or “Away from the Flock”—sold for $3.4 million at Christie’s postwar and contemporary art auction.

And so it goes for the right piece in today’s contemporary art market, which rages hotter than ever. With so much money chasing today’s and tomorrow’s art stars, the services of advisors like Heirston—who has clients ranging from Hollywood moguls to Wall Street highfliers, from designers like Kate and Andy Spade to literary figures like Salman Rushdie—have never been more valuable. She has advised them to buy everything from Hirst’s dot paintings to Cindy Sherman photographs to paintings by Bacon, Rothko and Rauschenberg, and watched as the values of works of their ilk have climbed. The best among these advisors, like Sanford Heller, Thea Westreich and Heirston, have a knowledge of art history that verges on the curatorial. They are not just telling their well-heeled clients to buy the latest sensation; they are providing both access and scholarship. “I have a strong sense of what’s important, or potentially important, versus what is trendy,” says the tall, elegant, Yale-educated, gallery-trained Heirston. “When I see a piece, I want to feel like it changed the language of art history. That is my core, no matter what kind of money is involved. If you want pure decoration, don’t hire me.”

The role of a good art advisor, says Sanford Heller, who advises supercollectors like hedge fund billionaire Steven Cohen, as well as David and Danielle Ganek, is to “provide access, both to material and to information.” For the Ganeks, who have been collecting for 20 years, and who have a deep interest in the art of Richard Prince, as well as that of Damien Hirst, Ed Ruscha and the less well-known Piotr Uklanski, Heller is an invaluable sounding board. “He’s so well-educated,” says Danielle Ganek, who has an upcoming novel set in the art world. “So much of art references things that came before, and he knows everything about what came before. That’s the criticism of some of the new contemporary collectors: They don’t know anything about art history.”

Knowledgeable or not, it seems everyone—or everyone who can afford the ever-increasing ante—is collecting art these days. While many of New York’s billionaires—including Leon and Debra Black, Henry and Marie-Josée Kravis, Ronald Lauder, and S.I. and Victoria Newhouse—have been collectors of long-standing, a new generation of wealthy collectors is setting tastes and driving the market. Steven Cohen, Adam Lindemann, Adam Sender, Aby Rosen, and many more who have made their money in hedge funds, real estate and media, are busy collecting the art of their day, from Warhol forward. Their passion and ability to pay big bucks for high quality work is fueling an unprecedented art boom that has yet to show signs of slowing. And theirs is not the only money around. Newly minted millionaires from China, India and Russia are jumping into the fray. “Art is exploding because there is a lot of money around and not much supply,” says Alberto Mugrabi, an art dealer, collector and art partner with Rosen. “Right now, artists like Andy Warhol, Willem de Kooning, Damien Hirst, Jean-Michel Basquiat, Francis Bacon and Richard Prince are very hot. What’s hot is quality.”

News of art being a great investment doesn’t hurt either. “People may love their Richard Prince photograph,” says Kadee Robbins, the London director of the Michael Werner Gallery of New York, London and Cologne. “But they love it even more when it’s worth five times what they paid for it.”

Heirston says the upside reaped by her clients and other art collectors transcend the financial. “There are so many benefits to collecting art,” she says. “It involves less upkeep than real estate. It’s more tangible than stocks. Jets and cars depreciate. It’s philanthropic, at least when you buy on the primary market and help support a young artist, plus there can be PR value. It also satisfies your intellectual curiosity. I would say it can even fulfill your soul.”

By some accounts, the current art boom dates from 1998, when S.I. Newhouse bought Warhol’s “Orange Marilyn” for $17 million. The Warhol market and the market in general have been gaining momentum ever since and, in the past two years, both have been positively turbocharged. Sotheby’s fall and spring contemporary art sales brought new price records for 25 artists, including $15 million for a Francis Bacon masterpiece, about $5 million over expectations. Christie’s broke the $200 million barrier with its postwar and contemporary art sale just 18 months after it crossed the $100 million mark. Works by Warhol, de Kooning, Rothko, Pollock, Sill, Lichtenstein and others are consistently commanding sums previously reserved for the Impressionists and Old Masters. Mugrabi, a major player in the Warhol market, puts the surge of interest in the artist like this: “He represents the most powerful country in the world in the best possible way.”

The prices that Warhol art is commanding are a far cry from the days when Vanity Fair writer Bob Colacello hung out in Warhol’s Factory, as the editor of Interview magazine. Art, Colacello says, has gone mainstream. A generation has come of age that has grown up looking at and living with art as never before. “Before the ’60s, only very rich people collected art, and art and culture were mostly the province of women,” Colacello says. “But pop art really popularized art. Jasper Johns’ flags, Warhol’s Marilyn and Roy Lichtenstein’s comic book paintings ushered in art that a lot more people can relate to.”

Contemporary art and the robust art market are enjoying full-throttle coverage in the popular media, from Vanity Fair’s entire December cover package, to ongoing coverage in Vogue, W, BusinessWeek, Forbes, the New York Times and others. “More and more, to be considered a person of culture and sophistication, you have to be at least conversant in postwar and contemporary art,” says real estate broker and keen social observer Serena Boardman. “That means you not only have to know your Jasper Johns from your Jackson Pollocks, but your distorted portraits by John Currin from your disturbing nudes by Lisa Yuskavage, your kitschy Jeff Koons sculptures from your taxidermic Damien Hirsts, your Richard Prince rephotographs from your Cindy Sherman self-portraits. It helps to know that some consider Zhang Xiaogang to be the Chinese Andy Warhol, although he lives in Queens. The Japanese version is Takashi Murakami, who even works out of a place in Tokyo he has dubbed “The Factory.”

Along with the escalating prices, the art world has simply expanded far beyond what was once a fairly elite and somewhat closed group, or, in the ’50s, ’60s and ’70s, a sort of countercultural ghetto. In New York, and everywhere else, there are more collectors, more dealers, more advisors, and more and bigger galleries. In Chelsea, the mecca of the New York contemporary art scene, a few galleries—Gagosian, Pace, David Zwirner and Marianne Boesky—have taken on museum-like proportions. It is no longer anywhere near possible to count the number of serious collectors on two hands. “It used to be you would see the same 100 people at openings and art events,” says Beth Rudin DeWoody, a longtime collector and passionate patron of the arts. “It’s a much wider group now.”

That group and tens of thousands of others converge on some of the major art fairs during the year, like the fifth annual Art Basel Miami at the beginning of December. They will pack up again for Art Basel in Switzerland in June, and for Frieze Art Fair in London in October, and every other year, the Venice Biennale. “It’s crazy,” says Colacello. “Before, rich people set their travel rhythms with horse races, thoroughbred sales, or fashion and couture shows. Now it’s art fairs and auctions.”

This year, about 40,000 visitors turned up for Art Basel Miami, the preeminent art fair in America, which has spawned more than 10 other satellite art and design fairs. NetJets, a sponsor, sent more than 200 of its jets in what has become its single busiest time of year. The fair featured practically “round-the-clock parties—some, like the Jimmy Choo party, only tangentially related to art. There are lectures, tours of private collections, multimedia events and more art than any one person can take in. “It is incredibly busy, active and energetic,” says Yvonne Force Villareal, co-founder of the Art Production Fund and a huge supporter of contemporary art. “There is something new to do every hour.”

Business at the fair, says art advisor Lorinda Ash Ezersky, was unbelievable. “At the main fair, the dealers told me they couldn’t keep up. They kept restocking their booths.” Ezersky says she bought seven or eight items, including something for her client, the London mega-collector, art impresario Charles Saatchi. In one of the bigger deals, the New York gallerist Jeffrey Deitch sold a Basquiat painting, a gift of the artist made to Andy Warhol, for $5,5 million, reportedly to the Acquavella Gallery.

The deal illustrates one of the main truisms of the art world today, Mugrabi explains: “The art dealers themselves are the biggest collectors in the world. They are always replacing and upgrading.” The ultimate art-world insiders, the dealers, are always on the lookout for the best picture. And when it becomes available, they pounce.

Villareal was taken by a few pieces that, she says, meet the standard she personally sets for art, reflecting on the troubling times we live in and providing a new perspective. One piece, by Aaron Young, was an installation at The Container Show, which cleverly and poignantly commented on illegal immigration. Another, by artist Nate Lowman, is one that collectors can have personalized. “It’s a gravestone,” she explains. “You commission your own names and fictitious date of your death, and underneath it says, ‘The Victim of Identity Theft.’”

Wilbur and Hilary Geary Ross scoured the fair to add to their growing collection of contemporary Chinese, Japanese and Vietnamese art. They picked up a piece by a young Chinese expatriate painter, Sue-En Wong—a fanciful work that combines traditional techniques with a contemporary sensibility. Like a lot of art collectors, the Midas-touched billionaire is hoping he has picked another winner. Last year, at one of Art Basel Miami’s satellite fairs, Ross bought a lightbox by a then-little-known artist named Kota Ezawa, and since that purchase, the Whitney, the Met and the Guggenheim have all bought work by the artist. And you can’t argue with his rationale for investing in art from Asia, and especially China. “The market for those pieces will only become stronger,” Ross says, “With China becoming a major world power, why shouldn’t major Chinese artists sell for as much as major American and European artists? It’s all part of the globalization of art and culture.”

The practically nonstop parties of Art Basel Miami, with their glamour, outrageousness and spiraling celebrity quotient, are beginning to rival those of Oscar week or the Cannes Film Festival. All the museums and all the major dealers throw parties. Vanity Fair threw a party, Diane von Furstenberg and son Alex hosted a bash aboard their yacht, Andre Balazs hosted one at his ultra-chic Raleigh hotel. Yoko One, Russell Simmons and Dennis Hopper had events. The larger gatherings are packed with people; UBS, another fair sponsor, held a dinner where Ezersky estimates that 1,000 people must have shown up. Heirston’s clients got a reprieve from the madding crowd at a small private dinner she co-hosted with Audermars Piguet on a private terrace at the Ritz Carlton.

The snowballing event and surrounding festivities are drawing more than just art people to Miami. “A lot of people who have nothing to do with the making and marketing of art are showing up at these things,” says Colacello, who was among those who hosted parties this year. “I mean, Fabian Basabe comes to Basel. I guess if Paris Hilton shows up, then we’ll know we’ve really hit a saturation point.”

The art fair mania and the fevered pace of art consumption are causing some to wonder if the art market is in a bubble that soon could pop. As mega-dealer Larry Gagosian reminded Adam Lindemann in Lindemann’s new book, Collecting Contemporary: “Art can be an investment. It can also be a bad investment.”

And while no one knows if, let alone when, the bubble will burst, Heirston says she’s not too worried. She started her career in a weak market. “If the market softens,” she figures, “it just means I can get better work for a better price.”