x Abu Dhabi, UAEFriday 21 July 2017

As markets implode, picture the real art of making money

As markets suffered their worst collapse since 2001, the auction of Hirst's collection fetches a record £71 million.

The auction of Damien Hirst's works is a record for a single artist in Britain.
The auction of Damien Hirst's works is a record for a single artist in Britain.

As markets suffered their worst collapse since 2001, the auction by Sotheby's of Hirst's collection entitled Beautiful Inside My Mind Forever - replete with new versions of his famous pickled creatures, including a calf with gilded hooves - fetched a record £71 million (Dh465m) on Monday, the first of a two-day frenzy.

That means Hirst has already smashed Sotheby's best expectations and the record 1993 sale of Picassos. Hirst's auction is unique and his tactics are truly modern. Instead of selling his work in the traditional way through long-standing art dealers, such as the White Cube and Gagosian galleries which have helped make Hirst the brand that the hedge fund elite must acquire, Hirst has attempted to cut out the middle men by taking his formaldehyde tanks and dead butterfly arrangements straight to the auction house.

It was a risky move. Sotheby's and Christies typically exclude the sale of anything less than five years old. So why does Hirst's bet seemed to have paid off? Sotheby's global ambitions and Hirst's brand certainly helped. Canny marketing has been a hallmark of the group of formerly young British artists from which Hirst emerged. It also no doubt helps that Sotheby's estimates that less than 10 per cent of its top 500 buyers over the last five years have made their fortune in financial services.

So it had a wider pool than Hirst's loyal galleries to lure new buyers. Yet, Hirst's biggest hand may have come from his collectors and disgruntled dealers. Collectors are anxious to support the value of the creations they own. And White Cube set the tone for the auction by offering almost £1m, twice the upper estimate, for the first lot on the block, the pinned butterfly triptych called Heaven Can Wait. Only two months ago White Cube, which has yet to find a buyer for Hirst's diamond-encrusted platinum skull, denied rumours that it was sitting on a mountain of unsold Hirst works.

Perhaps Hirst's story is not such an antithesis to trends in the financial markets after all. Indeed, in the same way that investment banks such as Lehman Brothers and Merrill Lynch were reluctant to write down the value of the swathes of exotic credit products held on their books, collectors and dealers are leveraged up with Damien Hirst. He, and they, must hope the value of Hirst-related assets do not follow those of Wall Street's.