Dealer sets up company to fund artists’ production
Perrotin also has plans to coordinate new works backed by other galleries
By Roxana Azimi. Market, Issue 196, November 2008
Published online: 12 November 2008
PARIS. Dealer Emmanuel Perrotin has set up a company to fund the production of new works, into which collectors can now invest. The idea to create a separate business—called Artists’ Dreams—has been emerging over several years as the Paris and Miami dealer has successfully asked collectors to help finance the production of major works, including an electrical installation by artist Piotr Uklanski, Untitled (Floor Dance), 1996, which was exhibited at the Guggenheim Museum in New York in 2007.
The new company formalises the process of outside contributions to new works, as well as enabling collectors to take advantage of a new tax law in France that encourages investment in small- and mediumsized firms.
The cost of producing works has become a pertinent concern in the contemporary market, particularly for dealers in France who risk being bypassed by artists who are in demand internationally. “The more I churn out, the more artists want me to keep churning out. I can’t do two things at once,” says Mr Perrotin.
He explains that investors are unlikely to get “amazing profits”, but that he is prepared to share both the risks and the potential upside with those who invest in contemporary art production. Under the terms of the agreement, once the money had been raised through Artists’ Dreams and the work produced, it would then be sold exclusively through Mr Perrotin’s gallery. Instead of the proceeds of the sale being split between the artist and his dealer, investors would share in the dealer’s cut.
The longer a work takes to sell, the higher the potential return to investors. For example, a work that generates a profit margin of 10% within three months would see this share of profits grow to 27.5% after 18 months rising to 37.5% after 60 months (in order to reflect the risk involved of tying money up for a longer period). “In the art market, it’s about making a loss to make a gain,” says Mr Perrotin. Meanwhile, the gallery’s remuneration would fall from 40% to 12.5% after this 60-month period.
Mr Perrotin was hoping to raise E2m for the venture following its initial launch on 21 October, and then begin work immediately on a project by Xavier Veilhan planned for the Chateau of Versailles next year.
He also intends to launch another new body that will work with both museums and other dealers in order to produce works. He says that this will enable him to work with other artists without changing his existing stable.
The dealer representing the artist would have exclusive sale rights for three to six months, after which time Mr Perrotin would also be able to sell the piece, sharing sale rights with the artist’s dealer.
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