Hirst out, Mehretu in

September 28, 2010

Prior to the Lehman collection sale, Skate’s predicted that if the work “We’ve got Style, (the Vessel Collection – blue/green)” did not sell, it would be a nail in the coffin of Damien Hirst’s art market. Nailed in he is—the failure to find a buyer for Hirst’s work, number one for the auction in terms of estimate range, is a spectacular end to the change in demand for Hirst’s artwork over the last decade. This market, which was estimated at a value in the hundreds of millions of dollars, is now officially illiquid for prices over $1m (and probably over $400-500k) apiece. Skate’s thinks it was a big mistake by Hirst and his dealers/advisers not to support Sotheby’s auction on Saturday and to let the headliner lot go unsold. The auction has brought opposite fortunes to “Untitled 1,” the work of Julie Mehretu.

In anticipation of the auction Skate’s wrote:

“Forty-year-old Julie Mehretu is among the youngest represented in the sale, yet her work is priced next to Hirst’s as the most valuable lot of the sale, with a Sotheby’s range of $600-800k. Should it get sold within this range that will constitute an enormous success story for a piece of art created as recently as 2001 and immediately sold to the Lehman collection from the primary market. Going forward, it will also probably make Mehretu the most interesting and value-creating artist to watch.”

Well, Mehretu’s work outperformed and has become the most valuable lot based on auction results. Skate’s welcomes this new queen of the contemporary market and perhaps the hottest star to watch during the coming art-market season. We can already imagine the sale of her multiple works at Frieze and Art Basel Miami.

Read the complete analysis of results from the Lehman collection auction and predictions for coming auctions in our October newsletter, to be released later this week.

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MCH Group, Owner of Art Basel, Reports Upbeat First-half Results and a Return to Pre-crisis Numbers

September 15, 2010

MCH Group, a Swiss-listed trade fair and exhibition services company, published strong financial results last week. The company, which was included in Skate’s Art Stocks Index because it owns and operates Art Basel fairs, reported six month revenues totaling 242.1 million Swiss Francs. This represents a more than 20% increase over the same period in 2009 and the successful rebound of MCH Group’s top line to exceed pre-crisis 2007 numbers.

The only visible damage caused by the economic downturn came in the form of reduced profitability and a less favorable product mix. Based on the first half of 2010, the group’s net profit margin stands at 16% (19% in the same period of 2007, but a strong recovery from 8% in 2009), and the EBITDA margin is 28% (versus 33% in 2007 and 23% in 2009). The group’s attempts to diversify away from exhibition business took the opposite direction – in 2007 the MCH Exhibitions segment contributed 69% of Group revenue; in 2010 this contribution grew to 76%. The MCH Infrastructure segment no longer registers as material for the group: its revenue share of MCH’s top line went from 8% to 4% between 2007 and 2010.

Nevertheless, MCH Group performance so far this year was sufficiently exciting to please capital markets – the company’s stock is among the best-performing constituents of the Skate’s Art Stocks Index, scoring 18% year-to-date capital gains and strongly outperforming the S&P 500.

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Monthly Art Investment Ideas from Skate’s Art Market Research

September 6, 2010

As the auction season is about to start, our monthly Skate’s Art Investment Report is now brought to you in a new format: each month we’ll summarize the key auction results for the prior month (with a specific focus on new repeat sales benchmarks and Top5000 changes), our investment picks from upcoming auctions and the most important news for twelve art industry listed companies (“Art Stocks”) we cover.

To get the best use of Skate’s Art Investment Report please note that our coverage is focused on the universe of 635 global artists that have their artworks represented in Skate’s Top5000 list of world’s most valuable art based on auction prices. To learn more about Skate’s Top5000 and its constituent artworks and artists represented, go to www.skatepress.com.

Click here to view the full article.

Russia Takes the Lead in Regulating Art Securitization and Collective Investments for Art & Collectables

September 6, 2010

While Moscow was buried in smog this summer, its regulators, specifically Federal Commission on Securities Markets and Ministry of Justice worked in concert with some of the most influential domestic financial institutions to launch a new regulation that allows for art securitization and creation of art funds to be offered to domestic and international investors, including Russian general public.

This initiative has been implemented within the ambitious modernization program launched by Russian political leadership that among other objectives includes creation of the international financial center in the city of Moscow. While the prospect of Moscow to rival London, New York or Hong Kong seems to be laughable as far as mainstream investment assets are concerned (the country’s large scale corruption cases such as recent incident with Bill Browder among others, continuing isolation from WTO and arcane visa regime make it unlikely new global financial hub), an idea to give it a try with alternative assets might actually be not a bad strategy.

Click here to view the full article.


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