Paul G. Allen’s Art at Christie’s Achieves $1.62 Billion, Cracking Records

Microsoft co-founder Paul Allen’s estate made auction history on Wednesday when a group of artworks from his estate sold for $1.62 billion, smashing the record for priciest collection ever sold at auction.

Allen surpasses the previous record for the most valuable private collection ever auctioned, set when divorcing spouses Harry and Linda Macklowe sold their artworks for $922 million last year and Peggy and David Rockefeller for $835.1 million in 2018.

Sale Analysis

Paul Allen’s collection was 100% guaranteed by the house. For Part I, risk on 87.45% was laid off to third parties. Paintings by five artists each sold for more than $100 million: Georges Seurat ($149.2m), Paul Cézanne ($137.8m), Vincent Van Gogh ($117.1m), Paul Gaugin ($105.7m) and Gustav Klimt ($105m), all inclusive of fees. Each of them held a third party guarantee. For full sale anaylsis, see Lobus Market Intelligence.

Net Gains

“Maternity II,” an 1899 Paul Gauguin he bought in 2004 for $39.2 million, resold Wednesday for $106 million and Gustav Klimt’s 1903 “Birch Forest,” which he bought for $40.3 million in 2006, resold on a single bid for $104.6 million, all inclusive of fees. Both works were world records at the time — the Klimt as part of the works that Even with those tremendous gains, reports and analysts are asking whether these assets outperformed the S&P?

Gauguin sale took place on November 4, 2004 where S&P closed at 1,161.67; above reflects November 16, 2004
Klimt sale took place on November 8, 2006 where S&P closed at 1,385.72; above reflects November 17, 2006

The S&P performance is illustrated above, as an approximation.

At maximum, Allen made 2.7x on the Gauguin and 2.6x on the Klimt in those time periods, though in reality a bit less given fees paid. By contrast, over the same time, the stock market is up 3.4x from 2004 and 2.9x from 2006.

Chart via Axios

Axios crunched numbers of works that had purchase prices that were publicly available. According to Axios, “even with all those tailwinds, the average annualized growth rate on the 11 lots with public entry prices was just 6.2%. On average, Allen held them for 18 years before selling them. By contrast, even after its fall this year, the S&P 500 still boasts a compound growth rate of 8.9% over the past 18 years/ The bottom line: Allen would have made more money just buying an S&P 500 index fund.”

All in all, the market continues to climb upwards.

Coverage: Wall Street Journal, New York Times, Axios

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