Private Museums

Why the rise of the private museum is rewriting the rules of the market

Dealers are growing increasingly wary of do-it-yourself institutions

Two months ago, film director Claude Berri opened Espace Claude Berri in the heart of Paris’s Marais district to showcase his burgeoning collection of contemporary art. This month the Polish advertising mogul Christian Boros opened a major space in a former Nazi bunker in Berlin. Later this year, industrial heir Udo Brandhorst opens his museum—with some public funding—in Munich. These are just three of the plethora of private collectors building their own museums.

Unsurprisingly, at Art Basel an increasing number of collectors are buying not just for themselves but to build a museum collection. The trend is changing the dynamic of the market—and its unwritten rules for buyers and sellers. “There’s a real rash of people running around saying ‘I’m doing a museum, I’m opening a foundation’,” said Todd Levin, who curates for hedge funder Adam Sender.

Dealers aren’t nearly as impressed when a collector with a warehouse comes knocking as perhaps they were before. “They may get a little better attention,” said Michael Jenkins of Sikkema Jenkins (2.1/B3). “But the most important thing is the idea that it is on public view.”

Miami collector and real estate developer Martin Margulies dashed to Galerie Bärbel Grässlin (2.1/G2) yesterday morning to pick up transparencies of three Franz West sculptures he had bought on the opening day at Art Basel for a museum in Miami which he opened in 1999. Mr Margulies also purchased a 1962 Picasso from Galería Elvira González (2.0/R2) for an undisclosed sum, and a Justine Kurland photograph at Mitchell-Innes & Nash (2.0/T4).

Mr Margulies, who estimates he now owns around 4,500 works, is among the more respected of a growing group of collectors who choose to create independent spaces, rather than donating works to public museums, where it might stay in storage “for the first 15 years”, he said.

Some collectors are not only opening spaces, they are publishing scholarly catalogues and employing professional curators. One, Emily Ansenk, the director of the Scheringa Museum in the Netherlands, was actively acquiring works at Art Basel, Volta and Scope. She was constantly in contact with the art museum’s founder, Dirk Scheringa, a billionaire entrepreneur. At Galerist (2.1/A1) from Istanbul, Ms Ansenk purchased Taner Ceylan’s Cinderella, 2008 (above), for E50,000.

The international rush to fill these independent museums has been a bonanza for dealers and a blessing for artists hoping to have their work displayed in prestigious public spaces. Dealers are happy that their artists will get the exposure and status associated with museum credentials, private or public—at a price. According to David Maupin, of Lehmann Maupin (2.1/F2), the discount can be up to 15% to a major collector, and 20% to a museum. But there are no hard and fast rules. “It’s a sign of respect to the collector. It’s not about need,” he said.

When a collector is building a permanent collection, putting it on public display can provide an entrée to buy good primary market material where waiting lists are common. Understandably many dealers tread carefully. “People will say anything to gain access to material,” said Mr Maupin.

Dealers say they need to research buyers if they don’t already have a relationship, whether or not they have a museum. “If it’s a new buyer, we check them out first,” says Glenn Scott Wright of Victoria Miro (2.1/T1).

Dealers say boundaries are blurred with so many private collectors with museums reselling works to refresh their collections. Charles Saatchi is the best known example of a collector who buys for his private gallery but also returns work to the market. Earlier this year, 110 works from the Estella Collection of contemporary Chinese art made $51.7m at auction in Hong Kong. The art was converted into an investment vehicle after the original “collectors” sold it on for a handsome profit.

But some collectors prefer the old fashioned route and entrust their collections to existing institutions. Howard and Cindy Rachofsky have pledged around 600 pieces to the Dallas Museum of Art upon their death. At the fair they bought Verne Dawson’s $75,000 Fox in the Snow, Bonjour M. Courbet, 2008, from Gavin Brown’s Enterprise (2.1/T2) and a Mark Grotjahn painting at Blum & Poe (2.1/H3). “If you have pledged it to a museum, you are higher up on the pecking order,” said Mrs Rachofsky.

“At the end of the day, you can’t hang money on your wall,” said Mr Margulies. “The only reason I like money is you can buy art with it.”