Sotheby's Buys Blue-Chip Art Advisory Firm
January 11 2016 - 6:50AM
Dow Jones News
In a novel bid to expand the way auction houses do business,
Sotheby's said Monday it had agreed to pay up to $85 million for a
blue-chip art advisory firm called Art Agency, Partners.
Art advisers typically serve as independent consigliere to
collectors, hired to help buyers navigate the opaque, high-stakes
world of auctions, galleries and fairs in order to amass coveted
artworks. Such firms have proliferated in recent years, but the
nearly two-year-old Art Agency has quickly risen near the top, led
by former New Museum curator Allan Schwartzman and former
Christie's rainmaker Amy Cappellazzo.
The firm's clients include Dallas Museum of Art trustee Howard
Rachofsky and Brazilian mining magnate Bernardo Paz, whose
5,000-acre park Instituto Inhotim is dotted with oversize art
installations selected in part by Mr. Schwartzman, its creative
director.
By branching into the art advisory business, Sotheby's could
position itself as an indispensable guide to heavyweight collectors
seeking advice about ways to expand or retool their art holdings.
The effort could also backfire if collectors ever feel pressured to
shop at Sotheby's. The house said its clients will pay their
advisers on a retainer basis so that fees aren't tightly linked to
sales. (Retainers could also bring the house steady fees even if
auction sales waver overall.)
The move is the latest salvo in Sotheby's cutthroat rivalry with
Christie's International to become a one-stop shop for the world's
art-loving billionaires, many of whom have already locked in
art-backed loans, storage, appraisals and other perks from both
houses. The volatile art market is also putting pressure on
Sotheby's and Christie's to go into strategic overdrive and
introduce or expand ventures beyond their traditional auctions.
Sotheby's said it bought Art Agency for $50 million with a
pledge to pay an additional $35 million if undisclosed performance
targets are met by the firm's 15 members over the next five years.
Under the terms of the deal, the house will hire the firm's staff
and absorb its art fund and entire client roster—a provocative
arrangement in a realm where discretion is prized. The house said
the firm's clientele have been notified.
The deal comes two months after Sotheby's offered voluntary
buyouts and several weeks after new chief executive Tad Smith hired
Marc Porter , another top deal maker at Christie's. A new
management hierarchy is also emerging, much of it led by newcomers
to Sotheby's: Under the house's newly created advisory arm, called
the Fine Art Division, Mr. Porter will serve as co-chairman
alongside Mr. Schwartzman and Ms. Cappellazzo. Mr. Porter will
focus on expanding private sales globally while the other two work
as advisers and oversee several specialist departments including
impressionist, modern and contemporary art. Eventually, Sotheby's
said, additional collecting categories spanning the 20th and 21st
centuries will fall under the chairmen's purview including American
art, Latin American art and modern British art.
Former investment banker and lawyer Adam Chinn, the firm's third
partner, has also landed a plum role: Starting Monday, Mr. Chinn
will become executive vice president of world-wide transaction
support, succeeding Mitchell Zuckerman, a 37-year veteran of the
house who is retiring.
Write to Kelly Crow at kelly.crow@wsj.com
(END) Dow Jones Newswires
January 11, 2016 07:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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