Selling/Buying Art by a famous art Investment Banker/Collector

Share on Facebook Share on Twitter Share on Pinterest Share on Tumblr Coming from the financial sector, where for years he has worked as an investment banker, the Brussels-based collector Alain Servais prides himself on taking a holistic view of the systems powering the global art industry, applying market models to predict future trends—and swoop in on overlooked opportunities. He is also, crucially, a passionate lover of art, and someone who believes in its capacity to change society for the better. In the second part of a wide-ranging telephone interview, Artspace editor-in-chief Andrew M. Goldstein spoke to Servais about his dissatisfactions with the current gallery system, what underappreciated artists he thinks are bound for art history, and where he thinks contemporary art will be in 2150. RELATED LINKS: How I Collect: Collector Alain Servais on Why the Venice Biennale Is the World's Best Art Fair You have said that you see the gallery system as flawed. Why is that? The gallery system is rather efficient—for the best of them. The top dealers who know how to navigate can end up flying in private jets. The problem with the law of the strongest, though, is that there are no rules, no respect, no ethos, no nothing. That’s what I’m sorry about. In Paris I watched an artist move from one gallery to the other, and I knew that move would kill the gallery. Even if it’s a small gallery, it doesn’t matter. When Adel Abdessemed moved from Kamel Mennour in Paris to David Zwirner, Kamel was deeply and personnally affected and it took him a year to recover. With the law of the strongest, the strongest rule with absolute power. Even in the financial market we’re more respectful of one another. We have more rules. In your interview with Michael Hort, you mention how a PR company wrote an email about his son, Peter, claiming that the family had access to “inside information” in the art market. And, yes, there is such a thing as insider information. I can give you an example: I own two important works of Frank Stella that I accumulated during the financial crisis when no one wanted to hear about Frank Stella. But I find him a really important artist in art history. One of the trends in my collection is the constant conversation with art history, because when you look with connoisseurship you can find people who are completely forgotten, disregarded, or underestimated. If you know enough about art history—and I am not an art historian by any stretch of the imagination—you can recognize the people who played a significant part in that history, even if they weren’t acknowledged at the time. And these people don’t carry the prices they should—it’s as simple as that. That’s why I started accumulating Cindy Sherman in the $25,000 range, not because I’m a genius but because for me it was so obvious—I couldn’t understand why amazing photographs by Cindy Sherman were always trading down there. Same with Barbara Kruger, she was in the $60,000 level forever. Jenny Holzer, same story—so dirt cheap. Tony Cragg’s early works are so dirt cheap. Frank Stella, Richard Tuttle, Robert Rauschenberg, Gilbert & George… I mean, those guys are or were just so cheap. And sometimes they don’t stay cheap. So what I do is I pay over my usual range of $5,000 to $50,000 for important works from those artists, because I think, “This is art history, and those guys are important. How come the market doesn’t see it?” Why do you think these artists slip under the radar? One explanation was given to me by a collector who has built one of the most important collections of furniture and objects in plastic. He told me how, during the ‘70s, people started creating everything in plastic—the chairs, the tables, the alarm clocks—and there was just too much and people got tired of it, not understanding they were part of that time, so no one paid attention. It’s the same with art, because in a way you say, ”Oh… another Barbara Kruger with that red square around it?” And if you see the same thing for 10 years, you say, “Ok, let’s buy something younger”—except that often it takes 20 years for someone’s full importance in art history to be made clear. It can be very brutal sometimes. Or, suddenly, you can multiply your money by five or 10 times. All the names that I mentioned saw their markets go through major upswings. Peter Saul went through one recently. It was so obvious, and I was so close to buying some Peter Sauls from the ‘70s for $25,000 to $30,000! They are so significant and cheap. Suddenly, Adam Lindemann came up with that show [“Peter Saul: From Pop to Punk” at Venus Over Manhattan, March 2015] and his market exploded. It happens so often, and I try to identify these artists for my collection—not for investment at all, but because I would love to have a Robert Ryman, a Caravaggio, a Klimt, a Schiele, a Guston. I’d love that, but I can’t afford it—so I’m glad there are still artists who are part of art history and who are so underrated. Robert Rauschenberg is an example. That’s why I’m so happy about the Robert Rauschenberg Foundation’s super-smart decision to move out of the tombstone of Gagosian to split its representation between three active galleries [Pace Gallery, Thaddaeus Ropac, and Luisa Strina] that will take good care of his art, which is still super-underrated. Back to my Stella, suddenly I hear everybody saying that his "Polish Synagogues" sculptures are amazing, and people are coming to me to ask if they can buy them for five times what I paid originally. So I wondered, “What the hell is going on here?” Then I got my answer when I learned two years ago that one of the first solo shows at the new Whitney will be Frank Stella. So, is this insider information? For sure it is. Guys on Wall Street would go to jail for this. What are some of the varieties of preferential treatment and insider information? So, what’s dubious about the gallery system? One thing is the relationship between the museums and the galleries. Right now only the wealthy galleries can get their artists work into museums because one of the problems is: who can produce the works? Who can put the money up front for massive pieces for exhibitions and biennales? With the multiplication of biennales it’s endless, and you need really deep pockets to be able to do it. You also need deep pockets because you won’t make any money out of the piece that you’re going to be producing. With Gucci or Prada, they don’t sell the catwalk pieces, they sell more standard products in the shops, and it is there they make money. With art it’s the same. That means you’re producing a work in the gallery that hardly anyone will be able to buy. It’s funny in terms of pricing, too, because if you think that buying a 10-square-meter painting by Anselm Kiefer is 10 times the price of a one-square-meter Anselm Kiefer, you’re wrong. It will sometimes be cheaper to buy the bigger Kiefer, because the element of size gets in the way at some point. I was interested in a massive installation at Manifesta and the artist came home with me to see how he could maybe adapt it to a 300-square-meter space. I began discussing the price with the artist, and half jokingly I said to him, “How much would you pay me to take care of this piece?” Because otherwise he would have to figure out how to store it, he’d have to pay monthly rent for storage—it would be a catastrophe. The first thing is the relationship between galleries and the big museums and biennials, which creates a reinforcement of the top—that’s the law of the jungle again—because that system of biennials is key to the validation of an artist, but it’s dependent on the ability to produce it. Another element has to do with gallery representation. I wrote an article about the industrialization of the art market that starts with a graph that is absolutely essential for understanding what is going on right now. And I still cannot believe it. If you look at the evolution of auctions of artworks in the European Union, the United States, and Hong Kong created by artists born after 1950, the value of this in 2001 was quite unbelievably $48 million dollars. That’s nothing—it’s not even a day sale at Christie’s. The same figure in 2008 was $800 million. I put three years of analysis and research into this article. What do you make of that shift? With people complaining about flipping and other marginal details today, the key thing to understand is that the world’s contemporary art market grew by 21 times between 2001 and 2008. What does it mean? Before, art was a leisure industry, and the gallerists and collectors were hobbyists. Dealers would characterize their collectors, “It’s cool, guys, we know each other, let’s take time to discuss things, no problem.” To artists they represent, they would say, “You’re like my son, I would do anything to develop your career slowly—you could count on me, and I’ll give you money when you go through a difficult time.” When you get to an $800 million market for contemporary art, suddenly the sharks start getting in the swimming pool. It’s not a playground anymore. You have the bad sharks like Yves Bouvier and you have the good ones like David Martínez from Mexico or François Pinault who know better than anyone how and when to buy and sell valuable assets. So, the whole system has changed completely, and one of the things that changed most drastically is that suddenly there are growing conflicts of interest between artists and gallerists. Sometimes what is in the interest of the gallery is not in the interest of the artist. For example, pricing policies. How fast do you want to raise the price? Again, I had a first-hand example with an artist from a collective in Paris, who once told me, “What can I do? The gallery representing me has a ground-floor booth at FIAC where they’re showing my drawings for €20,000, even though we agreed on a public price of €10,000. I went to the gallery and said, ‘What are you doing? Nobody will buy them at €20,000, and they’ll think I’m crazy for suddenly selling at that price.” The gallery responded, ‘I’m sorry, I cannot sell works on the ground floor of FIAC for €10,000—it needs to be €20,000 at least.’” Another example: a Manifesta artist came to me and said, “Something really strange has happened. Jay Jopling from White Cube came into my gallery’s booth in an art fair and he spoke to me for 20 minutes—he seemed really interested in my work, and we had a nice conversation. Before he left, he asked the gallery to send him a PDF. Then two months later I asked my gallerist if there was any news from Jay Jopling, if he had expressed any further interest in showing my work. And my gallerist told me that they didn’t send him the PDF. I said, “Wait, why not?” And the gallerist said, because if you started showing your work at White Cube we wouldn’t be able to sell to our clients at White Cube’s price levels.” This isn’t even to mention the lawsuits that I listed in my article, but it’s very well known that galleries and artists are working without contracts, so it happens. Look at the recent case, where the artist Dean Levin sued Robert Blumenthal for not paying him for works that were sold. Why is this happening? It’s because the money guys are coming in thinking, “Ok, I want to make money, and it’s easier here because it’s the Wild West, no rules apply.” So now you don’t only have reckless sharks, you also have blood-sucking leeches everywhere. Do you think that anything should be done? Because the art world is becoming this jungle, it’s necessary to reorder it—by beginning with proper self-regulation but also perhaps by introducing other possible participants, who could act as independent anchors for artists. Like artist agents. Do you believe those artist agencies like CAA are really going to gain traction? I believe CAA is more oriented towards promoting an artist’s brand across markets like in product or brand endorsement but in my opinion, the right agency platform definitely has a future. And many art dealers aren’t really gallerists anymore in the old-time sense of people like Leo Castelli, with galleries now functioning simply as exhibition spaces—they’re not interested in the long-term careers of the artists anymore. I see it, and everybody sees it. You said that, as a collector, you’re interested in changing the art system from within. Can you explain what you mean? As an investment banker I’m observing luxury goods, pharmaceuticals, and other industries—it’s natural for me, it’s nothing fancy—and I’m observing the art industry, and I think it gives me a rare capacity to see what is going on. Because most commentators on the art market, even the most senior ones, mainly have a background in art history—they don’t have the background of a finance guy. They have no clue about the impact of finance on the art world, and the bad impact it has. I can see it and it can be frustrating. Second of all, I have the capacity to get the direct information, like all those examples I gave you from firsthand experience, and that gives me insight into what’s been going on behind the art-fair smiles of the gallerinas. The third thing, as I hope I have convinced you, is that I am an art lover, and I believe that art is an important element of society. In a day where you have partisanship in the U.S., where you have what’s happening between the U.S. and Israel, or Israel and Iran, the whole thing is that if these people don’t start accepting that the other has a right to exist we might be heading toward the end of the world. The media, as you know, is partisan as well—if you listen to the same news on Fox and CBS, you say, “Can they possibly be talking about the same facts?” It’s totally different. As an art lover, I truly believe that art has a very strong social function, so I want to defend it. And what I’m seeing is that we now have the sharks for good art and the sharks for bad art, and we have the new buyers who are being convinced that after you have your five cars and two houses the thing to do is to buy art. But what they don’t have is the education or the culture, so they buy something that refers to something they know—for instance, that looks like a Picasso. I’m sorry guys, if something looks like a Picasso in 2015, run away! This is the issue with Zombie Formalism—it’s bringing nothing new. Nothing, nothing, nothing! The worst temple of that right now can be found in Hollywood and Los Angeles. You’ve said you believe the L.A. art scene is by far the worst in the world right now. Without any doubt. Why do you find it to be so dire? Others consider it to be the most exciting ascendant art scene. Because we are mixing two things here. Yes, that abstract painting is where the demand is right now, and this demand really is increasing. Ten years ago I was seen as a major client, someone whom dealers would die to invite to dinners and stuff like that. Today I am considered a marginal buyer, because the dealers kind of leave us old-school collectors alone—they know that we do our homework ourselves and that we’re going to come and choose and decide what we want and they’ll ship it and send us the bill and that’s it. They don’t need to work on us and we’ll still be there, so it’s ok—we’re like drug addicts who they know won’t go away. So they focus on new clients, the ones who really like to see James Franco up-close at a dinner at Cipriani, blah blah blah. They don’t know much about art, so you cannot sell them Barbara Kruger with a strong message or a complex work like the old-school collectors buy, but dealers can make tons of money by manipulating them into buying what is ‘hot.’ Again, I find it convergent with the luxury goods industry. When he was building LVMH, [Bernard] Arnault just started from an observation: Dior, Louis Vuitton, and those other guys are making amazing dresses, amazing luxury goods, but they don’t really know at what price to sell it, so they just throw a dice and say we sell it for €2,000—they aren’t aware they can price it at €20,000 and then make millions by selling belts with the logo. So Arnault realized the power of branding of those brands and started buying them aggressively. I was involved in the debt-financing of Gucci buyout, where there was a terrible battle between Pinault and Arnault. From there on, it was all about expanding the branding technology, creating the flagship store that was all about the image. So when you see Gagosian putting on a Koons booth at Frieze in London two years ago with just three sculptures at $25 million each—and nothing else in the booth—it’s not for selling, it’s a brand building exercise. Same with Gavin Brown, when he did the Urs Fischer booth with the single cigarette pack dangling from a string at Art Basel Miami Beach [in 2006]. He didn’t care about selling anything at that fair—he was building his brand. Right now, we are going through a massive period of brand-building, and it’s perfect for those new buyers, because they might not know much about art, but they do know about one thing: brands. “I want to buy from Zwirner.” “I want to buy from White Cube.” “I want to buy whatever Gagosian will bring me.” What this does is that it allows the galleries to sell anything. A speciality of Hauser & Wirth, for instance, is to dig up an artist from the past who has been a little bit forgotten, write a nice catalogue on them, and move the prices from $10,000 to $100,000. Done! You have an unlimited supply for that stuff, and you don’t even have to pay for production because it’s already produced. What are some examples of collectors who buy art along gallery brands? I was in Milan and I went to visit a private collection and I couldn’t believe it—Gagosian was everywhere! Six Kiefers, Peter Doig, Francesco Vezzoli, Elizabeth Peyton, everywhere. But Peter Doig isn’t represented by Gagosian. Ah, but that’s how it starts. He once said in an interview that his geographical spread across 12 or more galleries almost happened by accident. I remember the first Cindy Sherman show he did in his Beverly Hills gallery. Of course, Metro Pictures could not tell Cindy that she couldn’t do the show in Beverly Hills, because it’s not their territory. But once he did the show in Beverly Hills then it became possible to sell her work under the nose of Metro Pictures here in New York. And he said he started his gallery in London because he followed his trusted dealer Mollie Dent-Brocklehurst, who wanted to move back to London, and who then went on to be the advisor to Dasha Zhukova [and now leads Pace’s London gallery]. But that started the ball rolling, and then all the other top galleries had to move to London. It’s like what Emmanuel Perrotin said about moving to New York—he said he wasn’t moving because he wanted to move to New York, he said he was doing it for defensive reasons, because his artists want to show in New York and if he didn’t show them himself he’d have to give them over to his competitors there, and they’d eat him alive. Do you really think that Marian Goodman at 87 years old really wants to take on the burden of opening a place in Mayfair? Of course not. But what other choice does she have if she wants to sell Richter in Europe. It’s always defensive. What I mean by all of this is that all of the money that’s pouring in to the art market from all over, and that money is spoiling things. And you ask me what my agency is in all of this. My agency is to try to make it possible for real art to survive. Because right now the artists are producing to sell, because that’s the only thing they can show in galleries. And I’m worried, I’m really worried, like many people are. There could be a lost generation. You’ve said that investment banking is all about seeing the future. What do you see as the future of the art market? Again, personal experience. I spoke to a major collector from London and he said to me, “Alain, I had the most amazing and most horrifying experience ever.” I said, “What happened?” He said, “I was in the warehouse of Hauser & Wirth in the tunnels under the mountains in Switzerland, and it’s gigantic. But when you see one Paul McCarthy pirate in their booth in Frieze New York, there are hundreds of them there, Alain. It’s an unlimited supply.” Another story. I follow the day sales at Phillips very closely, and there was a sale in April called “Under the Influence” that had about 25 lots with no reserve. What does that mean that there is no reserve? It means the seller wants to sell it at any price. Ah, interesting—people are willing to sell, whatever the price? I thought art was precious and so on. But people are approaching auction houses with work right now like crazy, and that’s why the auctions keep multiplying all year long. I remember a time when there were two auctions, November and May, and that’s it. Now it seems there’s an auction every single month. Why? Because there’s the supply, so the auctions houses can say, “I don’t know if I’m going to be able to sell this work, so the only way I’m accepting it is with no reserve.” So, for example, there was a Rachel Feinstein, a large piece, that was estimated at ₤4,000 to ₤6,000. What was the final price? ₤750. What does this mean for the future of art? I believe that the craze for contemporary art among these new buyers who don’t know anything is going to create a situation when they just accumulate and accumulate and accumulate, and one of the biggest problems for any collector is storage—and not only the freeports but any type of storage. So I was speaking to a foundation in France that said they wanted to reduce their collection from 500 pieces to 400 pieces. I know many collectors who have hundreds of pieces that they would like to sell, and they don’t know how to sell them. So my view of the future is that suddenly there could be a glut appearing. And that’s why I admire the auction houses and the big galleries—because the way they hide this reality is fantastic. It’s a big marketing machine. So Christie’s erases all the pictures and the prices of the unsold lots as soon as the auction is over, so you can’t see what didn’t sell unless you have the catalogue—otherwise it’s gone. And everyone always focuses on the highest-selling lots, but they ignore all the rest. Also, the auctions are highly manipulated events, without even entering into the discussion of multiplying guarantees, and they always know in advance who wants the work because they know who has been asking for condition reports, so they can go back to the seller in advance of the auction and say that there isn’t enough interest in the work and that they have to decrease the reserve. So then the work does sell, and people will say, “Oh, 80 percent sold.” But look at how it was sold. What is the relationship between the primary-market price and the secondary-market price? Then you can say, “Aha, maybe there is a glut building.” Not only in terms of quantity but also the prices. So what will happen when people become a little more aware of the glut? It might take a little bit of time to reach these new collectors, because their only points of contact are art advisors and galleries that will keep a smiling face. But at one point—and I’ve seen this in the financial markets—everyone is rushing to the door at the same time. And then it could get nasty. So I don’t know when, and I don’t know how, but there is a possibility of this happening. Specifically in contemporary art, because other categories like Modern and Old Masters are not sharing in the excitement right now. I want to create an ecosystem where the real art can survive today, and tomorrow, so we need to find a system where artists can make good art that can still support good galleries and good institutions. And how do you see the future direction of art itself? Let’s say you put yourself in the year 2150, and you’re looking at your history books. What happened in the 2000s? I would say a few things. Religious war and the advent of the Internet throughout our lives—it’s like the invention of the electric light or the telegraph—and Internet 2.0, which is the social layer of Facebook and Twitter and all the rest. It is obvious that this is what will be remembered of today. So if there are artists who are creating interesting, questioning works that are talking about this evolution… and it’s not about doing geeky things, it’s not about doing gadgets. It’s about looking around, and looking around again. Like Cory Arcangel’s early works that remove Mario from Super Mario Brothers and just leave the landscape of the clouds. They’re expressing something about looking at reality in another way—that’s why they’re works of art. It’s the same with Tabor Robak, Jon Rafman, Rafael Rozendaal, Siebren Versteeg, Mark Napier—all those guys are creating works online that are very powerful. Ian Cheng is a genius, and I was one of the first to buy him. That’s just being a good collector, I’m sorry to say. But, yes, digital art—and we must dare to go the entire way. It’s like Facebook. Facebook is not just something on your desktop, it’s something that you consult on your iPhone, on your computer, on your iPad, on your watch, on your whatever. It’s virtual. So don’t try to bring everything back to objects, like self-branded Post-Internet art tries to do. It goes back to what I was saying about new buyers needing something they can refer back to—the easiest thing to refer back to is an object: “A work of art is about an object. No object, no art.” And this is why I’m so sorry about all the artists who have been working for the last decade in digital art—all of a sudden, people are saying, “They’re in the past, they’re the first version of Internet art, and now we can’t even turn their material on anymore.” That’s the thing we need to save! That’s the real work of art—that’s what will make history—and not the kind of object that’s made using 3-D printing so we can say, “Yes, we’ve got an object.” It really makes me want to throw up. If you saw things the way I see them you would understand why I’m so irritated by this. Because, I’m sorry, calling it “Post-Internet” as if what came before is a kind of backcountry precursor and what’s happening now is the real art? Come on guys, you’re just a victim of the art market. So I tell all the galleries coming to me, “Show me only the things that are digital. Show me screens, show me software.” And even with the software, I don’t want a video, I want a random composition, like Ian Cheng.

And I love Ian, because he was given the chance to show his work as a video in the video section of Art Basel, and I was speaking to the guy in charge who said, “I can’t believe this kid—he said, ‘No’! Of course I can’t show his work in a random setting for 24 hours. I wanted to show how it looks!” But the fact that it’s random is essential to Ian. It’s not a video—it’s not the same thing. So, it seems you’re presaging a coming flood that could be brought on by a glut of physical artworks, but at the same time saying we’re in a golden age of virtual artworks. If there’s one thing I can say in this interview, it’s: let’s not be manichean. This is not about the bad boys being punished and the good rewarded. Everything that I say about the new buyers is immediately linked to [Capital in the 21st Century author Thomas] Piketty, because that new money is exactly what Piketty is discussing. It’s not about the end of the world, about the golden calf, about destroying the temple. It’s about the fact that there’s an evolution in the world that is independent of the art world—it’s about cars, watches, diamonds, apartments on Central Park. Everything is way overpriced, and there’s a glut, and at one point it will overturn. Because that evolution cannot go on forever. Piketty said, “Yes, maybe it can.” But now even Republicans are talking about shifting a greater tax burden to the wealthy, and if a turn like that happens that’s something that would suddenly kill all of the excesses, and not only in art, but everything. But the one underlying thing linking the whole thing is the art, I’m sorry to say. And that means that the art of the future will be partly virtual, and I believe that there will be more virtual art remembered in 150 years than there will be of Los Angeles painting. And I would be happy to make a bet with you on that one. You ask me, when do I decide to buy something. The one thing I ask myself every single time is, “Is there a chance that someone will want to look at this work in 30 years’ time?” And I can tell you that it is easily solved. Look at a Kour Pour and ask yourself if someone will want to look at that in a museum in 30 years, when it has been done 150 times in the last 150 years. Not a chance. Cory Arcangel? Yes. Ian Cheng? Yes. Barbara Kruger? Yes. Josh Kline, with his discussion of virtual worlds and automatization? Yes. Bruce High Quality Foundation? Yes. They stand a chance. So where will your collection be in 2150? I have no clue. Depending on what kind of money we will be left with and the evolution of my family, what my children want to do? I don’t know what will happen with that. But I’ve been watching all of the models, and for me the best possibility of making your collection public but still controlling it—because if you give it to a museum you won’t—is the solution that Eli Broad found. When everyone was expecting him to build a museum, he built a kind of a schaulager, which is a kind of storage site but one equipped with a team that makes sure you collection is known by all the museums and curators in the world. You make sure that the works are lent and shown regularly. That for me is the future. If you want to make an impact, you acquire masterpieces and you make sure that they are circulated. RELATED ARTICLES