Earlier this week, the Financial Times published a wide-ranging interview with Sotheby’s CEO Charles F. Stewart, seemingly meant to talk up the auction house’s business ahead of next month’s all-important marquee auctions in New York.
The biggest takeaway, however, didn’t come from a quote, but was tucked halfway through the piece. The auction house’s recent $1 billion investment deal with ADQ, Abu Dhabi’s sovereign wealth fund and investment company, the FT reported, was for a 25 to 30 percent stake in the company. Given that the figure wasn’t directly quoted by Stewart, Puck’s Marion Maneker ran it back to Sotheby’s PR, who confirmed the equity stake.
The size of the stake is notable given that, when the deal was announced last November, it was merely reported that ADQ took a “minority stake” in Sotheby’s. It’s not clear what kind of influence on operations 25 to 30 percent buys.
The rest of the interview is well-worth a read, as Stewart is characteristically candid in his responses, providing a window into how the CEO approaches Sotheby’s larger business.
Stewart indicated that he believes—despite two years of a soft market and a particularly challenging 2024 for Sotheby’s—market trends are moving in their favor. He pointed toward a “tsunami” that could bring “hundreds and hundreds” of major art collections to market as Baby Boomers and the Silent Generation shift assets and wealth to their Gen X, Millennial, and Gen Z children.
That “Great Wealth Transfer,” as its called in financial circles, is well documented. The most recent Art Basel and UBS Survey of Global Collecting said $84 trillion will pass to younger generations over the next 20 years. In 2022, Sarah McDaniel, then the head of Morgan Stanley’s Art Resources Team, similarly told ARTnews that they expect the wealth transfer to see a lot of art go to market.
“What we’ve found is that with the Great Wealth Transfer and the economics of taste in the art market, many collectors’ children don’t have the same taste in art as their parents,” McDaniel said. “In the past collecting categories and who’s collecting them tended to last longer so there was potentially less of a disconnect when a collector was passing away or disposing of their collection.”
That increase in supply couldn’t happen soon enough for Stewart. Last week, at a press preview in Hong Kong ahead of that week’s modern and contemporary evening auction, Stewart told me that the auction house’s recent issues have “all been on the supply side.” In that instance, Stewart was referring to the Asia market, but Sotheby’s has trailed Christie’s in consignments as of late.
As Maneker noted in his newsletter this week on Sotheby’s-ADQ, the auction house had sales volumes half that of Christie’s during the latest sales in Hong Kong and London. And the latest major art collection to head to the block, that of Barnes & Noble founder and former ARTnews Top 200 collector Leonard Riggio, will be sold by Christie’s, with an estimated value of $250 million.
Check out the full interview with Stewart here.
