Late Microsoft Founder's Estate Sale Spotlights Art's Alternate Asset Potential
That art is often seen as a pursuit for the uber-rich is a given but for the serious collector it also becomes an acquisitional effort that results in exponential returns on investment. That was seen with the collection of Microsoft's late founder Paul Allen, who in his lifetime went on to build a portfolio that would embarrass some fund managers. Last international auction house Christie’s wrapped up its sale titled 'Visionary: The Paul G. Allen Collection', which comprised 155 masterpieces that encompassed 500 years of art history, and sold over a two-day series.
While bids came in from dozens of countries worldwide, the collection netted a stupendous $1.6 billion and was all sold out. While the sheer magnitude of the Visionary sale goes on to reflect how evolved the Western markets art world ecosystem is, it's notable that at least 28% of works by value had been purchased by clients in Asia.
Dirk Boll, Christie's EMEA deputy chairman, 20th/21st century art, and formerly president of Christie’s in Europe, Middle East, Russia and India, says that while he couldn't share details on what the Allen family had retained of the collections, the auction included 155 lots that led to break all existing and prior records. What themes drove Allen's art-buying?
"There was clearly a lot of love for Venice and his collection included landscapes and he was interested in how good artists dealt with their challenges and he was of course able to buy the best available so there was a lot of high quality works," Boll said. Allen didn't have a group of advisers who told him what to buy but; instead did his own research and homework and went about buying what he wanted to buy, which shows the depth and breadth of his collections, Boll said.
Pablo Picasso's Tête Classique. (Photo: Christie's)
A keen art collector for decades, Allen, according to Christie's, shared pieces from his collection in the late 1990s through anonymous loans to museums around the world.
There are not many collections of quality that match Allen's, he said. "I don't think that density of quality is common, and this is the first auction to have crossed the billion-dollar mark. The closest was the Rockefeller collection which was sold over three days and fetched about $835 million and the collection of designer Yves Saint Laurent that sold in 2009 for a little under $500 million."
Will India ever see an auction where a collector has built a sizable portfolio over a lifetime, with the highest quality pieces that serve as repositories of art history and grow in value only to be given away to charity on being sold?
According to a report Indian Art Investor, in the financial year 2021-2022, the Indian art market had a record turnover of $137 million—large by a domestic yardstick but still tiny in contrast to the Western world.
Dinesh Vazirani, director of Saffronart Gallery, says that the major difference with collections in the U.S. is that the environment there has a very strong institutional awareness of art in museums and those are few and far between in India.
"The world will notice when we display how we showcase our art and an example is the Kiran Nadar museum of art, the Sunil Munjal museum and the upcoming MAP in Bangalore," he says. "When there are iconic buildings then it will lead to top art inside it as well. So far in India real estate has always been more valuable than art and it's the exact opposite in the rest of the world."
Salvador Dali's Le Spectre De Vermeer (Source: Christie's)
There has been lots of progress in Indian art in the last two decades but it is still catching up with the west.
Rakhi Sarkar, who runs CIMA in Kolkata, says that there are also other fundamentals that drive such collections. "The access to serious capital, possessing the appropriate sensibilities and having a very keen eye in spotting the difference between a good work and a great work."
She also goes on to add that for the values of Indian art to increase exponentially, there will have to be a co-related rise in the organised infrastructure of the art world at large. That includes state participation in museums, sponsorships, promoting Indian artistry to the world at large and in a manner that befits its overall profile, she says.
She dismissed the notion that foreign collectors don't appreciate Indian art. "Dutch consultant Kito De Boer of McKinsey & Co. was a significant collector and Masanori Fukuyaka was a leading Japanese collector of Indian art as well."
How do the laws play out for collectors who want to buy art from international auctions such as these?
"There are significant art purchases that are taking place globally; however, due to complications arising from bringing art purchased overseas into India, people tend to make purchases overseas and choose to keep the acquisitions in other locations and properties worldwide," says Roshnek Dhalla, counsel at the Art Law Practice at corporate law firm Khaitan & Co.
If an art collector wants to buy a work from an overseas sale and specifically wants to bring it to India, Dhalla says art works attract an import duty of about 25%.
Of course, there is another factor at play as technocrat and former Citibank India head Jerry Rao says: "If you look at the Chinese market, it is natural to play the violin and the cello and integrate with other western artistic notions but in India that is not the way it works." Lata Mangeshkar, for example, won national awards of honor for playback singing—a craft and art that isn't even recognised in the Western world.
He goes on to add that building a world-class collection by the very top collectors lends them to usually go through only one and one dealer or gallery that gets them a certain kind of art collection. "It's almost like a money manager who takes care of your wealth and does so exclusively," Rao says. "The other difference with such collectors is that from the very start they are buying not with a view to showing off art in their living rooms but with a view to public venues, museums, installations and so on."
Senior Artist Paresh Maity says the history of contemporary art is very young in India. "If the West sells Monet or Manet, it's been happening for centuries not decades; whereas here it's essentially post-independence and the present so it's literally in the beginning of what will hopefully be a take-off inflection point," he says. "If you look at what a VS Gaitonde sold for five years ago, it will be significantly higher right now and that says it all." He goes on to say that creating a model of art for India on the global stage for a global audience by global buyers will take time.
Every major city needs museums, or contemporary art-facilities to be able to give the broader Indian audience the right exposure to art.
Are Indian buyers of art too value conscious? Rao seems to think so and says that when it comes to artworks, what you can get for the price of a Cezanne can get you... maybe five masterpieces by five different artists in the Indian realm.
Despite that Indian art market being small, it is picking up pace owing to the rise in demand for senior 'Master' Indian artists such as Maqbool Fida Husain, Syed Haider Raza, Jamini Roy, Francis Newton Souza, Jogen Chowdhury, Tyeb Mehta, Manjit Bawa and more, Dhalla says.
Francis Bacon's Three Studies for Self-Portrait (Source: Christie's)
Of course, the Paul Allen sale is important for multiple reasons.
Ashvin E Rajagopalan, director-Piramal Museum, says, "Everyone is caught up with the $1.6 billion dollars it achieved but one must highlight two very important points. One that this is the best example of how paying for the absolutely best quality work yields the highest returns, and second that art is a solid and serious enough asset that can yield the same or better return as real-estate or share market."
"Ultimately, art can outlast its creators as well as its owners. “You have to be doing it because you just love the works… and you know that all these works are going to outlast you,” Allen presciently had reflected in an older interview. “You’re only a temporary custodian of them.”
Pavan Lall is a Mumbai-based author and journalist with over two decades of experience in the media industry.
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.