Citi Offers Guide Through High-End Art Market

A new breed of auction house junky can intimidate those considering art as an investment. Citi can help.
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If you get those large glossy catalogs from Phillips du Pury or subscribe to Lot Finder from Christie's for auction-related emails, you're well aware art season is upon us.

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Lehman Brothers auction Saturday took in some $12 million, and Christie's First Open show netted $7.5 million in proceeds from buyers willing to outbid even auction house estimates to acquire pieces by Richard Prince, Christo and Frank Stella, including a Stella painting that sold for $410,500 -- double the top estimate of $180,000.

A new breed of auction house junky -- participating mostly over the phone, in real-time via the Internet and through absentee bidding -- can intimidate those looking at art as an investment by making it more difficult than ever to know if they're investing or simply spending money.

The high-end art market, often facilitated through auction houses such as Sotheby's and Christie's, has been steady and strong since 2008.

It may seem like a high-class problem to have, but an unpredictable stock market, grim real estate forecast and sky-high price on gold has more people looking at art as a serious investment alternative that happens to make their living room look a lot better.

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has operated its Citi Private Bank Art Advisory service for almost 30 years for this sort of person, providing professional art advisers to help clients research purchases from galleries, private collections and auction houses. The service charges a yearly retainer as well as a percentage fee on purchases it facilitates.

While technically not an investment adviser, the service is sought out by high-end buyers, from the most sophisticated of generational collectors to a newbie with a penchant for Prince or Bacon looking to fill empty walls, for its ability to sift thorough the growing art marketplace and help with financing or the leveraging collections of over $10 million in value.

Suzanne Gyorgy, head of the Advisory, previously worked as the division's art finance manager and director of the PaineWebber Gallery in New York.

"The high-end art market has been very steady and strong since 2008," Gyorgy says, noting record-breaking sales for this year that have included works by Warhol and Monet. Investors from the Middle East, Asia and Eastern Europe, often gobbling up lots at auctions over the phone or by proxy, are partly to credit for the demand.

A pleasant voice you don't mind heeding on the way to multimillion-dollar purchases, Gyorgy manages to decode the nuances of art history and technique in digestible explanations.

Those without the high net worth of a Citi Private Bank client or simply looking for the rush of the auction house experience can heed a few simple steps to ensure they're not overpaying for art.

"Auction house estimates seem to be lower than in times past. That attracts more buyers to auction, and with it come prices that often exceed auction house estimates," Gyorgy notes. But buyers should still look to the estimates as guidance, and of course "it's essential that buyers do their homework and inspect the pieces before bidding to know exactly what they're getting."

"Homework" means getting at least a basic knowledge of art, including the difference between an original work and a multiple, a term meaning there's more than one of the same piece. Both are worthy of investment, with the latter likely having a sales history that can be found on websites such as

Artnet

or even through the auction houses themselves. The history can be used as a basis for a bid.

The condition of intended purchases is a crucial factor, Gyorgy emphasizes, especially art acquired through the secondhand market that has likely been exposed to wear, sunlight and general aging sometimes not obvious in auction house photos or third-party condition reports.

There's been much emphasis of postwar and contemporary art, Gyorgy says, and there continues to be opportunity and strong interest in both areas -- but also in 19th century works that sometimes don't get the media buzz of the contemporaries.

When pressed as to the investment value of the booming multiples market or ways buyers can enter the under $100,000 market, she encourages "looking into works on paper to find some of the best deals." She also stresses that "art should not be seen as an investment, but as something that lives with you for years to come."

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Michael Martin is the managing editor of JetSetReport.com, a luxury travel and lifestyle guide based in Los Angeles and London. His work has appeared in InStyle, Blackbook, Elle, U.K.'s Red magazine and on ITV and the BBC.