The Art Newspaper notes the increasingly complex internal workings of the guarantor system at Christie’s this week, including a growing number of behind the scenes deals and third-party guarantees or investors that help push works to ever higher prices.  “It is becoming more complex and confusing, and that’s not what you want to have in an art market where prices are at this level,” says economist Olav Velthuis. “With the market expanding and prices rising so high, you want more transparency—but this is resulting in the opposite.” (more…)

A piece in the Financial Times notes that the value of the global art market topped €51 billion last year, an astounding figure that comes as Christie’s topped a $1 billion in sales this week alone.  Featuring in-depth analysis, the article notes the U.S. and China as the top shareholders in market value, and as well as the interesting detail that most dealer inventory rarely moves in under 6 months, despite that current clamor for works on the market.    (more…)

The trial over the alleged art fraud committed by San Francisco real estate developer Luke Brugnara took a strange turn this week, as Brugnara was sentenced to 21 days in jail for contempt of court and bullying witnesses.  Brugnara reportedly screamed for a mistrial during court proceedings, and accused dealer Rose Long, who testified that Brugnara took over $11 million in art and refused to pay for it, of being a “liar.”  “I think she’s probably got post-traumatic stress disorder now,” said presiding judge William Alsup. “I’m afraid it’s done mental damage, the way she’s been treated.” (more…)

Another article on the Obama Presidency’s attack on 1031 “Like-Kind” Exchanges is on Bloomberg this week, focusing on collector Steven Edlis and his use of the loophole to acquire works he then donates.  “Stefan Edlis has been generous but many people who will take advantage of this will not be generous,”says critic Robert Storr, dean of the Yale University School of Art. (more…)

An article in Bloomberg this week notes the statement of Laurence D. Fink, head of the world’s biggest asset manager, BlackRock Inc., that contemporary art has surpassed gold as a more secure investment.  “Historically gold was a great instrument for storing of Fink said at a conference in Singapore. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.” (more…)

A recent report by Skate’s has indicated that investors are directing major attention towards Sotheby’s as Vanguard Group, Morgan Stanley and BlackRock have collectively acquired around 18% of the company in the past weeks bringing over $540 million in investment capital with them. (more…)

The New York Times takes a look at the growing number of services catering to financial investment and speculation in the art market, particularly the tech-focused art storage company Uovo, or the market insights platform ArtRank, both of which seem to prioritize contemporary art as a source of financial wealth over a source of intellectual edification.  These new companies demonstrate “something about the way art is functioning, which is less about the artwork saying something or doing something and more about the artwork representing a value,” says one artist, speaking anonymously. (more…)

Sotheby’s CEO William Ruprecht has announced that he will be stepping down from his position at the auction house, following a nearly year-long battle over control against investor Dan Loeb.  “The last few years have been the most successful in the company’s history,” Ruprecht said in a statement.  “I am comfortable and confident saying Sotheby’s is well positioned for the next chapter of its success and I will do all I can to contribute to a smooth leadership transition.” (more…)

An article in Forbes traces the conclusion of the modern and contemporary art auctions over the past two weeks, and places the overall sales during the two series of sales at an unprecedented $1.78 billion.  “We’ve seen a trend over the last few years where clients are going into hard assets, from real estate to art, which is a neutral currency,” says Citi Bank head of art advisory and finance, Suzanne Gyorgy.  “We continue to see U.S. collectors discretely buying at a high level.” (more…)

Russian entrepreneur, mathematician, engineer and collector, Inna Bazhenova has purchased the Art Newspaper, with the intent of helping in the development of the site’s online offering.  “The quality of its journalism and scholarship are outstanding and its excellent coverage of international art news is vital in our global environment,” she said in a statement. “I want to reassure you that The Art Newspaper will retain complete editorial independence, now and for as long as I own it. My aim is to invest in it so that it may remain as good as it is today.” (more…)

An article in Barron’s this week charts the instability and unpredictability of various materials in contemporary art as a considerable liability towards a work’s valuation and security as an investment.  “A great deal of art being sold today may deteriorate quickly and cause the monetary value to decline – precipitously in some cases,” says Emily MacDonald-Korth, founder of Longevity Art Preservation LLC. (more…)

The New York Times continues its thorough investigations into the contemporary art and auction markets, noting struggling stock prices for Sotheby’s and mammoth Chinese auction house Poly Culture Group Corporation, and the statistical dissonances in the claims of auction houses trumpeting a new golden age for the market.  “There’s a feeling among financial analysts that the valuations of art-related companies are peaking,” says Fabian Bocart of Tutela Capital. “These valuations are based on expected volumes at auction. Very expensive items have almost no impact.” (more…)

Investor Daniel Loeb has officially been acknowledged as one of Sotheby’s newest board members, alongside two of his own candidates, expanding the auction house’s board to 15 members.  The appointment was part of a May 5th agreement between Sotheby’s and Loeb, and brings in jewelry designer Olivier Reza and Harry J. Wilson to help lead the company.   (more…)

The New York Times documents a new trend in galleries’ approach to setting up space in Hong Kong: focusing on small exhibition spaces and tighter exhibitions to draw interest while remaining economically flexible.  “We’ll have exhibitions about four or five times a year, but an exhibition can be three works or four works,” says Pace chairman Arne Glimcher of his gallery’s new Hong Kong space. “Or if it’s watercolors or works on paper or small sculptures, it can be 10 works.” (more…)

The New York Times addresses the publication of Thomas Piketty’s critically-lauded book on capital accumulation and income inequality this week, questioning how the work, Capital in the Twenty-First Century, can be applied to the art world, where the vast increase in high-figure spending has priced many interested parties out from buying works  “The art market has become an excuse for banking in public,” says dealer Ivor Braka. “People are displaying wealth in the most ostentatious way possible. It’s luxury goods shopping gone wild.” (more…)

A new venture has opened its doors in London, allowing interested buyers to purchase shares in art on view, and to take the work home to show for a fraction of each year.  Called My Art Invest, investors can buy shares in works for as little as $8, with share value determined by an artist’s market value, including works by Basquiat and Damien Hirst.  “We want to democratise art,” says Tom-David Bastok, My Art Invest’s 25-year-old founder. “For me, it’s very, very, very important that everybody can put a foot in the art market.” (more…)

The Wall Street Journal takes a look at the current art market, and analyzes the risks and rewards of investing money in contemporary art.  “The new moneyed rich are looking for alternatives to help hedge their bets against any loss in value of their money and the rising risks of concentrating too much of their wealth in stocks,” says Jerry Slusiewicz, president of Pacific Financial Planners. (more…)

Writer Melanie Gerlis summarizes her book Art as an Investment? in the Financial Times this week, which reports on the current interest in the art market by major banking and investment firms, and questions the assurances of its value and use in the market.  While often compared favorably to other assets, analysis shows that it is not quite as ideal of a market as some would attest.  She writes: “Equating a popular asset with a profitable asset is misleading. From an investment point of view, art seems to be a very fragile prospect.” (more…)

In what may be a response to internal pressures, Sotheby’s Auction House has announced a dividend for the Fourth Quarter of 2013 of $.10 per share, payable on December 16th to shareholders of record.  The auction house announced the dividend early this week. (more…)

Hedge Fund Billionaire Daniel Loeb has gone on the offensive towards Sotheby’s Auction House today, calling for the resignation of company chairman, CEO and president William Ruprecht for his alleged lack of leadership and excessive pay.  Loeb recently became a leading stock holder in the auction house with his activist investment firm Third Point, and many forecast that he will use his position to force major changes in Sotheby’s operating model.   “Our research suggests Sotheby’s crisis of leadership has created dysfunctional divisions and a fractured culture. There is a demoralizing recognition among employees that Sotheby’s is not at the cutting edge,” Loeb writes in an open letter. (more…)

A new development on the Lower East Side has been green lighted by city authorities, and will include a New York outpost for Pittsburgh’s Andy Warhol Museum.  Essex Crossing, a $1.1 billion development planned by L+M Development Partners, BFC Partners and Taconic Investment Partners, will include a community center, rooftop garden, as well as the 10,000 square foot space occupied by the museum. (more…)

The 27 year-old, Columbian-born Oscar Murillo is the focus of a spotlight in Bloomberg, detailing his recent addition to the David Zwirner roster, and the quickly rising prices for his works.  “He’s had the quickest upward trajectory for his age of any artist I’ve seen in 25 years,” said dealer and writer Kenny Schachter. “There’s a lot of money to be made trading Oscar Murillo at this point.” (more…)

In a recent segment, BloombergTV reviews the current state of Sotheby’s, examining the auction house’s current issues with activist investors Daniel Loeb and others, who have together taken a 15% stake in the company.  Emphasizing Sotheby’s position in the market, and its sole rival, Christie’s, the segment goes on to detail the house’s “untapped pockets of value.”  “It’s widely expected that they (investors) will focus on the brand, the real estate story, the balance sheet.  What’s not clear is whether they will agree.”  Says Bloomberg’s Su Keenan. (more…)

The Wall Street Journal reports on the current state of Sotheby’s auction house going into the fall art season, detailing the company’s increasing stock price despite sales that have been less than exemplary.  With a series of high-profile investors now on board, including the recent addition of Daniel Loeb’s Third Point, Sotheby’s has a number of options standing before it to increase its value for shareholders. (more…)