(Bloomberg News) The contemporary-art market surged by 35 percent in 2011's auctions as an influx of wealthy buyers sought refuge from financial turmoil.
Sotheby's and Christie's International raised a combined total of $1.7 billion from evening sales, according to calculations by Bloomberg News. Collectors sought proven artists for investment, led by Germany's Gerhard Richter, 79.
While some prices are still below the highs of September 2008, when Lehman Brothers Holdings Inc. collapsed, buyers from the U.S., Russia, Asia and other emerging economies have been investing in contemporary art.
"The art market is a place for new people these days," Christophe Van de Weghe, a New York-based dealer, said in an interview. "There are Americans nobody has seen before who are excited by this world and who want an alternative to shares. And then there are buyers coming in from places like India and China. The collectors who bought 15 years ago aren't prepared to pay today's higher prices."
Sotheby's and Christie's made their combined total with fees from 12 high-value contemporary art sales in New York and London this year. In 2010, the equivalent evening auctions made $1.2 billion, an increase from $482.3 million in 2009. The sales reached a record $2.4 billion in 2007, fuelled by speculative bidding for fashionable names such as Damien Hirst, Jeff Koons and Richard Prince.
"The market is hungry for great works at 'masterpiece' level," the New York-based art adviser Mary Hoeveler said in an interview. "There is tremendous wealth to buy them. New buyers are also migrating to the contemporary market from other more traditional art collecting fields. Demand for contemporary art has increased exponentially."
Sotheby's raised $844.1 million from its evening auctions in 2011, while Christie's took $834.3 million. Equivalent auctions in New York and London held by Phillips de Pury & Co., which has a reputation for offering pieces by emerging artists, totaled $208.3 million, an increase of just $7 million on 2010, according to Bloomberg calculations.
Classic contemporary works from long-established collections attracted intense demand. Sotheby's sale of 34 paintings by Georg Baselitz, Sigmar Polke and other German artists belonging to Christian Graf Duerckheim-Ketelhodt, chairman of the Cologne-based pharmaceutical company Axiogenesis AG, raised 60.4 million pounds ($94.6 million) in London on June 29. The total with fees almost doubled the low estimate of 31.8 million pounds, based on hammer prices.
On Nov. 9 in New York, Sotheby's offered the Clyfford Still abstract "1949-A-No.1" valued at $25 million to $35 million. One of four works by the abstract expressionist that were consigned by the City of Denver, it was bought by a telephone bidder for a record $61.7 million. Before the auction, would-be bidders had to file past protesters shouting "shame on you!"
The previous evening at Christie's, a 1961 Roy Lichtenstein painting from the collection of Courtney Ross, the widow of former Time Warner Chief Executive Officer Steven J. Ross, fetched a record $43.2 million. "I Can See the Whole Room!... and There's Nobody in It!" had been bought at auction for $2.1 million in 1988.
Asian collectors bought an unprecedented 14 percent of the lots at Christie's 38.1 million-pound sale of contemporary art during London's "Frieze Week" on Oct. 14.
Among living artists, Richter was the star, setting records at Christie's in October and at Sotheby's New York in November. A private collector entered eight abstracts by the German artist in the latter sale and all sold above the high estimate.
A 1997 "Abstraktes Bild" in purple, red and blue was the most expensive, at a record $20.8 million. The buyer was Bernard Arnault, chairman of LVMH Moet Hennessy Louis Vuitton SA, said dealers with knowledge of the matter.
"Richter is going to play a huge role in the market for years to come," Jonathan Binstock, a New York-based senior contemporary-art adviser at Citibank NA, said in an interview. "Collectors are going for artists with proven reputations."
Buyers were also keen to spot the Richters of the future. A silver minimalist abstract by the New York painter Jacob Kassay, 26, created a stir when it sold for a record $290,500 at Phillips de Pury & Co. in New York in May. The estimate had been $60,000 to $80,000.
"Overall the market is more balanced and focused than it was in the last boom," said the London-based art adviser Wendy Goldsmith. "Though there are new clients coming in all the time, these are mainly international business people. The hedge- fund crowd isn't so much a factor this time round."