Modigliani - Portrait de femme

Inside the Art Market: Centers of Influence

The paintings in the living room looked impressive, almost regal. The whopping Pissarro landscape over the fireplace was mesmerizing; but then one noticed a radiant floral still life by Matisse, a portrait by Manet, other works by Cézanne, Boudin and assorted Modernists like Utrillo, Soutine and Vlaminck; and on into a gallery in this spacious Northern California house one encountered a Modigliani portrait on one wall, a Van Gogh on another, and scattered pictures by minor 19th century French artists rounding out the rooms. Here was an old-money collection of taste and style, one which, in the booming current art market roiling with new money and eager buyers the world over, should be worth a fortune.


The owner, the matriarch of a distinguished old family, was elderly and needed round-the-clock nursing at home. Hence the family office asked that all of the paintings in the collection be authenticated and valued for estate planning purposes. They already knew that the large group of Australian paintings in storage and scattered about the house was highly regarded and quite valuable, as most had been acquired in Australia from the artists themselves many years ago. They had impeccable provenance and were highly saleable, as the perky specialist from Sotheby’s in Melbourne had eagerly conveyed. Other works from the collection were on loan to museums and had been thoroughly vetted.

But the many Impressionist and Modern paintings, on the other hand, seemed darker in their pedigree. Even the family made light of the cavalier, buccaneering manner in which their father, a real estate tycoon, had bought many of them in the 1950s and 60s. He had been introduced to a slick and polished gentleman-dealer who styled himself a White Russian aristocrat with impeccable taste and a title of some sort. He traded pictures, almost as a lark, through his posh social connections abroad, all the while trailing an aura of romance, glamour and palace intrigue.

But large sums had been paid to this man, impressive paperwork and correspondence provided with a flourish and many handshakes, along with artful if oily assurances as to authenticity. And now, some forty years later, the moment of truth had arrived. What indeed was the true value of these pictures?

How true it is: If something doesn’t look right, it probably isn’t.

People who work professionally in the art market are cautious and skeptical by nature. Hence no amount of romance or impressive paperwork, or even forensic analysis, will alter the fact, to a trained eye, that a painting is not authentic. The brushwork is sketchy, unconvincing, atypical of the artist; the subject matter or locale are odd, even unknown in the artist’s canon; the signature looks bogus—or worse, the artist is known never to have signed his paintings, and yet here is a signature! So many things can go wrong in a fake and yet still pass into the hands of an unsuspecting owner, passing down from one generation to another.

“Ignorance is bliss,” goes the saying, and how very true that is about art, and the art market, on so many levels.

Sadly, this Northern California collection of such impressive wall power proved virtually worthless: nearly every painting elegantly framed in gold with nameplates for this or that Impressionist master, but still fake. In retrospect, after examining the fascinating correspondence from the aristocratic dealer, one could see clearly this was a case of massive fraud committed by a grifter of exceptional gall. The correspondence from him alone was fabulously fictional: there was even a letter he had provided from Matisse, reputedly written at his behest on a visit to the artist’s home in the South of France attesting to his fond remembrance of the very painting sold to the California client! The invoices and lines of provenance added further color and pomp to the cringeworthy spectacle of fraud.

Despite the dreary, shocking ordeal of vetting these many paintings and having one after another flagged as a fake, now at least, from an estate-planning point of view, the family knew for sure the true value and salability of their art collection.

Most families do not.

The art market today is one of extraordinary breadth and diversity, almost exploding with energy and eager new players. Anyone trying to navigate it on behalf of an estate, a trust or a family office would be well advised to proceed cautiously, as the market is rife with pitfalls as well as opportunities.

It is a market run by insiders, of course—like auction house specialists, private dealers in every sort of collecting category, and others providing numerous ancillary services, such as framing, restoration, insurance, collection management, appraising, and even financing. For those who are outsiders, on the other hand—such as most families and individuals unaccustomed to dealing with this market up close on a steady basis—they may find the art market opaque, confusing, intimidating, even terrifying.

And yet the art market is eager to embrace new business. This is especially true of collections from estates and affluent families wherein art and antiques with good provenance and perhaps a prominent name attached have suddenly emerged. Buyers find this irresistible, a breath of fresh air in a market where so much is often repackaged in an endless cycle of auction sales, antique shows and art fairs.

In many businesses one hears the term center of influence. Generally, this means a person of prestige, knowledge and good contacts in a given field of expertise who attracts notice and respect. Often such a figure of influence is especially good at making connections, putting people together, advancing business deals, solving thorny problems, and generally sharing a wealth of wisdom in a manner that inspires others to do likewise. Think of Warren Buffett, the “Oracle of Omaha,” an extreme example for sure but all the more noteworthy for his genuine humility and self-effacement.

In recent years I have noticed a fascinating trend in the art market regarding centers of influence, ones having little or no special expertise in art but powerful nonetheless for their role in protecting families with art.

These are bankers, private wealth management advisors, family offices, accountants, trust officers, and trust and estate attorneys. Collectively these players may seem shadowy in their profile within the art market, but they have emerged as increasingly important in promoting and developing “best practices” for families and private individuals hoping to navigate the art market with aplomb and happy consequences.

Of course, bankers and lawyers have been on the art scene for a long time. When I worked in the trusts and estates department at Sotheby’s years ago we liaised constantly with them, as they were often the overseers on the transition of art from an estate to the auction saleroom. So we cultivated them as potential clients; we invited them to banker-lawyer walkthroughs during exhibitions of note; we gave them dinners at the yearly Heckerling Institute in Florida; and we awaited the happy phone calls from them about the wondrous collection of this or that newly-deceased heiress, philanthropist, society figure or business wizard whose obituary we had recently read with great interest in The New York Times.

Often such a call set off a bidding war with our only real competitor in the auction market at that time, Christie’s. In due course the bidding war ended, a winner was declared, a contract was signed, the auction process began in earnest, and the neverending work of cultivating the bankers and lawyers for yet another sale resumed.

This robotic routine continues today, rather diminished in zeal at both Sotheby’s and Christie’s due to many sweeping changes at both houses. But it is really an old-fashioned business-getting strategy, and a rather awkward one at that. One thinks of that fiendishly macabre cartoon by Jack Ziegler in The New Yorker some years back, with the lady behind a desk with earphone attached and speaking into the phone: “Sotheby’s is sorry for your loss and wonders if the deceased owned any German expressionist paintings.”

The new breed of legal and financial advisors that one finds today, especially those from family offices, takes a different approach. These advisors have come to realize more than ever before the importance of planning with art in mind.

Think of that family in California with all of those Impressionist and Modern fakes: wouldn’t it be far better to address that potential crisis, as they did, before it becomes an estate situation? Doesn’t it make sense to work closely with a family on an ongoing basis, and perhaps with the younger generation as well, to understand the meaning and value of the art they own and to make a plan slowly and deliberately, to be prepared for gift-giving, museum donations, and sales?

I recall all those times during my years at Sotheby’s when we worked with families that were in shock over the loss of a loved one; and then they were given additional shocks over ugly messes in the art collection, ones that might have been addressed years before but were now left for them to clean up. And to make matters worse, the clock was now ticking on estate taxes. A mood of mild panic and uncertainty often hung over such proceedings, and mistakes were made.

Over fifteen years ago, now out of Sotheby’s and working on my own in advising families with art, I was asked to represent a large and diverse collection of paintings and sculpture. This engagement came through a trust company in Santa Fe, New Mexico, a firm I had known for years and admired for their style and graciousness. At first glance this seemed like a classic estate situation.

But lying in wait was a problem.

A wealthy heiress had died and left her valuable art collection in a trust benefitting her second husband, a courtly gentleman who lived within a gated compound in Santa Fe. The lady came from a family renowned for its art collecting in the Midwest; and so the collection had things inherited as well as acquired by the lady, who had a very good eye. She had bought a sculpture directly from the artist David Smith, for example, and had many glorious Impressionist and Modern works descended in the family, ones by Cézanne, Redon, Braque and Kandinsky, as well as a lovely group of British paintings and sculptures.

The trust company now wished to move forward with sales at auction. After a competition to decide which auction house to engage, the sales unfolded over a period of several years. There was no particular hurry, and the trustees were marvelously patient and sophisticated in dealing with the clamor and noise of the auction process that we had set in motion.

But there was a problem, and that problem was a portrait in the collection by Modigliani.

 The portrait was of a woman with bright red hair. She was reputed to be the artist Marie Laurencin, someone who was thought to be an acquaintance of Modigliani and part of his artistic circle in Paris. However, this attribution was more anecdotal than factual, and so the identity of the sitter remained unknown. Nonetheless, here was a ravishing portrait by an artist whose mystique had grown so heroically in the art market since his death in 1920 that his paintings—especially his nudes—now fetched enormous prices.

Anyone familiar with the market for paintings by Modigliani will know well the complexities of authenticating them. Put simply, a Modigliani that is listed in the standard catalogue raisonné assembled in the 1970s by an Italian named Ambrogio Ceroni is considered to be authentic. Those that are not included in this so-called “bible” are deemed questionable. Sotheby’s and Christie’s have long maintained the rigid policy of not offering such non-Ceroni paintings in their sales, as this is a safer path in light of the prevalence of Modigliani fakes on the market.

The only alternative to Ceroni is the new catalogue that for years has been in preparation by the scholar Marc Restellini in Paris. His catalogue is expected to be more encompassing and up-to-date, and it may well challenge some of the attributions in the old Ceroni catalogue. But for now, until that new catalogue actually sees the light of day, owners of non-Ceroni paintings by Modigliani remain in limbo-land.

This is where we found ourselves with this client’s portrait by Modigliani, as it was not listed in Ceroni. It had peerless provenance and could be traced right back to the artist’s studio; and it had been seen and accepted by Restellini for his new catalogue. Still, since neither Sotheby’s nor Christie’s was recognizing this catalogue yet, we were unable to consign this portrait for sale at either house. We were truly stymied.

This state of affairs persisted for several years. During that time we lent the painting to a prominent Midwestern museum with which the family had enjoyed a long history. Later, the painting was requested for a major exhibition of paintings and drawings by Modigliani that took place at the National Museum in Tokyo, later traveling to Osaka. Throughout this period we had countless conversations with the trust company over a strategy for moving forward with a sale, as they had an obligation to “monetize” this asset and have the funds flow into the trust.

After about seven years of waiting we decided upon a new course of action, engaging the English firm Bonhams to sell the painting. This they were willing to do so long as they could be completely satisfied as to the painting’s authenticity. To this end they engaged a distinguished former specialist from Sotheby’s to examine all of the paperwork that we could provide from the family on the provenance and exhibition history of the painting.

Satisfied, Bonhams then scheduled the painting for sale. As part of their overall marketing and promotion plan, which included illustrating the painting on the cover of the sale catalogue, they took out a glorious full-page color advertisement for the painting in The New York Times. And on a warm June afternoon in a saleroom in London, our client’s entrancing portrait by Modigliani, so long in limbo, fetched a price of $2,938,339 amidst strong bidding.

The trust officer was there with me in the saleroom as we savored this moment of triumph. She is a lawyer by training and only occasionally is faced with art-related issues of this importance. But she is emblematic of what we see as this new breed of bankers, lawyers and family office professionals with a genuine and growing interest in the art market, and, most importantly, a willingness to learn about its arcane folkways for the benefit of their clients.

This makes perfect sense. After all, why shouldn’t financial advisors take center stage in the art market, which, in the end, after all is said and done, is all about money.

—Ronald Varney

(Image: Sold by Ronald Varney Fine Art Advisors, Amedeo Modigliani, Portrait de Femme. © Bonhams.)