In recent years this method of hedging stock lots, as a guarantee of third parties, is becoming increasingly popular, superseding the traditional guarantees of auction houses

More recently, an integral part of the auction business have financial guarantees to sellers: auction sets a minimum amount of remuneration which is supposed to work to the owner, regardless of the outcome of the auction. Auction houses, especially in the days of market stability, were ready to spend their own money to establish a presence on the trading of star lots. For example, in 2006 at Christie's and Sotheby's during the spring New York trading spent about $ 500 million in guarantees to customers. Then came the economic crisis of 2008. Then, because of guarantees provided in the months before the crisis, during the fall Sotheby's company had incurred losses of $ 52 million (because of lots that were left without buyers.) The company is not Christie's announced the figures of their losses, but its executives have confirmed that the size of losses were approximately the same order as that of their nearest competitor.

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Jeff Koons Pink Panther Estimate: 20-30 million Result: 16.9 million Source: artinfo.com

FELIX GONZALEZ-TORRES Portrait of Marcel Briand Estimate: 4-6 million dollars Result: 4.6 million dollars Source : artinfo.com

our own experience, then experienced all the "charms" of guarantees, the auction houses have created an alternative to this way of hedging the important lots: they coined the so-called guarantees of third parties - an interim solution, which shifts the financial risk arising from the auction house on a third-party guarantor. Persons providing such guarantees (otherwise - Irrevocable rate) - a group of elected and largely anonymous wealthy dealers and collectors, on the suggestion of the auction houses agreed to apply for a job at a minimal price. If the other quotations, Lot No, he goes to such surety, but if the item is bought at auction for a large amount of third party shares profits from its sale with the seller, or if the terms of the agreement, the auction house. Share payable to each side, depending on the conditions of the particular transaction. These conditions are always negotiated individually.

Guarantees of third parties are significantly different from those that provide their own auction house. According to a New York lawyer specializing in the sale of art objects and knowledgeable market conditions of such agreements in the late 1990s, a "guarantee [auction house] never distributed to a single work: they were given only a group of products. Thus, the risks [of different lots] were balanced, and the auction house received usually pretty significant amount of profit. Eventually, when the market "warmed up" and increased competition on it, the auction houses held increasingly lower share of profit guarantee and the terms of [such] transactions become more complex ».

only thing that guarantees to third resemble those previously existing practice of warranties, so it's all the same its tricky conditions. Each auction house sets its own criteria for concluding such transactions, details of which have never been disclosed. "I have concluded the deal for 50-80 percent of the profits", - said Artinfo asked not to be named a New York dealer, noting that such transactions have now become the foundation of its business. He also stressed that the larger the guarantee might mean to a third party in the implementation of the auction a large amount of compensation.

While traditional auction houses guarantee is still in vogue, for the most part they are already driven increasingly popular third-party guarantees. Since November 2008, the auction house Christie's, for example, organized a similar guarantee for 20 lots of Impressionist and Modern auction and bidding for 56 lots of postwar and contemporary art in London and New York. Company Sotheby's shows the statistics in terms of money: According to data published by the press secretary of the auction house in 2008 to guarantee the company spent 626 million and in 2009 - $ 7 million.

Guarantees third-party auction houses exempt from having to answer for the fate of the lots remaining in the auction without buyers. In such guarantee there is a significant advantage in the eyes of sellers: According to Philip Segal (Philippe Ségalot), representing the dealership Giraud Pissarro Ségalot with offices in Paris and New York, this approach is guaranteed to have a person who already has offered to work a certain price. "The guarantee is just the auction house guaranteed, while the third person [in the case of a failure in the auction] is not merely provide [financial] guarantee, but ultimately satisfied with the fate of work." In preparation for the auction Carte Blanche, which Segal organized with Phillips de Pury & Co. New York, the dealer arranged for guarantees of certain works of third parties, which eventually brought $ 82 million from total revenues of 117 million auction.

Family of New York trader, dealer and collector Magrabi Alberto (Alberto Mugrabi) participated in similar transactions and, as guarantor, and as a seller. Belonging to her silkscreen by Andy Warhol (Andy Warhol) 1962 "Men in her life" (estimate 40-50 million dollars) was top lot of the aforementioned auction Philip Segal Carte Blanche: a picture with reproduction photo of Elizabeth Taylor (Elizabeth Taylor), in excess of all expectations, was paid $ 63 million. Magrabi refused to share details of other transactions of this kind, in which he participated, but noted that they are beneficial for all parties concerned, and for the market as a whole. "Usually, people that provide guarantees as third parties, wish to become owners of the works - explains Magrabi - so for them this chance to get a job at the best price. A seller can expect that [with a favorable outcome] will receive an amount exceeding the size of the guarantee. The seller wants the deal was secure, and no guarantee of many outstanding works simply can not be on the market ».

It guarantees of third parties allowed to bring in some expensive auction of paintings by artists from the collection of the Los XXveka Angeles-based collector, Mrs. Sidney Brody (Sidney F. Brody). In May 2010, in advance of the auction Christie's a New York dealer has provided a guarantee on work of Pablo Picasso ( Pablo Picasso) «Nude on a background of green leaves and bust 'of collections Brody. Bidding ended at around $ 106 million - so expensive at a public auction is not sold yet, no work of art. The same dealer at the same auction provided a guarantee on the work of Giacometti's "The Big flat head" (1955); lot was exposed with an estimate of 25-35 million dollars and was sold for 53 million dollars. Unofficial sources report that the dealer has earned in the two guarantees of over $ 10 million.

Another New York dealer has provided a guarantee on the work of Felix Gonzalez-Torres (Felix Gonzalez-Torres) «Untitled (Portrait of Marcel Briand) "(1992, estimate of 18-25 million dollars), which sold for a record for the artist 4.6 million in the same auction Carte Blanche, and the work of Juan Gris (Juan Gris)« Violin and Guitar "(1913 , estimate of 18-25 million), earned a record for the artist 28.6 million at Christie's in November 2010. "I was ahead with this work - said the dealer a guarantor, referring Gris - but I left the auction with a $ 3 million in his pocket. So, if you arrange everything properly, it's a win-win ».

successfully performed by a third party - the guarantor of Taiwan and collector Pierre Chan (Pierre TM Chen), executive director of the company producing computer chips Yageo Corporation. According to Chen is close to the source, it provided guarantees for at least two jobs, trades and graduated with outstanding results. For example, a picture of Modigliani's "Nude Seated on a sofa (The Beautiful Roman woman)" (1917, estimate more than $ 40 million), the buyer of Asian purchased over the phone for a record for the artist's $ 69 million at Sotheby's auction in New York in November 2010, and work "Reading" by Pablo Picasso (1932, estimate of 12-18 million pounds) during a Sotheby's auction in London last February went to an unknown buyer, a seller on the phone, for 25 million pounds ($ 40 million).

Of course, not always guaranteed a third party wins financially: sometimes a guarantor could lose millions if it conforms to the amount of the guarantee above that which can offer bidders. No warranty, alas, can not recover the interest in the product, the policy of the seller which is too aggressive. Take for example a test case with the sale of Jeff Koons 'Pink Panther', which blew so much this past May. Playful ceramic sculpture in 1988 appeared at auction at Sotheby's in New York with an estimate of 20-30 million dollars, and eventually went under the hammer for just 16.9 million. Moreover, it was only a quote, which probably came from a third party - the guarantor. It is not known what proportion of guarantees received as a result of the seller, the publishing magnate Benedict Tashenov (Benedikt Taschen), but it is rumored that the amount was close to the lower estimate of work. Representatives from Sotheby's declined to officially comment on the results of Koons lot, but one of the experts in backstage interview admitted that the price of the product "may have been overstated».

Gorvi Brett (Brett Gorvy), head of Post-War and Contemporary Art of Christie's, where the owner also suggested that the work of Koons, has explained its lamentable result of the auction: "The seller has bypassed a lot of places, spoke to dealers, so that by the time the item has appeared at auction, any market interest in the subject cool. Auctions and dealers vying rushed to look for guarantors, and despite the high quality of work, it scared away potential buyers. The seller has a guarantee, but nothing beyond its sum ».

Actually, the only disadvantage guarantees to third parties as in the fact that they sometimes discourage potential buyers who previously become aware of the presence of lots of guaranteed of auctioneers and auction catalogs of thanks to the presence of special characters. Some buyers believe that in the event of such guarantees and third-party auction house, get an unfair advantage: in their opinion, the auction house safely performs predprodazhu work, not giving anyone else the opportunity to buy the product on an equally favorable terms. "In my opinion, here it is possible some of the machinations of the guarantor. It becomes available inside information "- believes the unnamed New York dealer, formerly of the auction house.

Company Christie's also offers its guarantors another advantage: the so-called" fee for the guarantee, " which should compensate for the risks and the guarantor can be in reducing the amount of commission to the auction and purchased by the guarantor of guaranteed auctions. Press Secretary Christie's Toby Usnik (Toby Usnik) explained that this award "is calculated separately. You can find the conditions in our directory: A third party may, at its option, either use the money to pay for the auction house, or just pick them ».

presence of such conditions allows Christie's« beat "guarantee from the company's Sotheby's, which does not practice such payments. "I can assure customers that they are fighting for the lots in a fair, transparent, equitable game - said in connection with the Executive Director of Sotheby's William Ruprecht (William Ruprecht), - and I can not give such assurances in some other way." Company lawyer Jonathan Olsoff (Jonathan Olsoff) echoed his boss: "In terms of the guarantee of a third party acting in Sotheby's, the guarantor in the event of his success will have to pay the full amount of the commission and will not receive any additional compensation." Olsoff does not preclude the introduction of such compensation in the future, but in any case not by the amount of commission payments.

However, despite all the positive aspects of third party guarantees, they also have other aspect, perhaps not so obvious: the need to similarly encourage and stimulate sales means, apparently, that the market is still not fully recovered from the stronger and the crisis. And if so, we can hardly expect that the popularity of the practice of third party guarantees as a special form of safety net of lots in the near future will decrease.

Prepared by Mary Estrova, < em> AI

Source : artinvestment.ru