Robert Milazzo

Wall Street trader-turned-art dealer Robert Mnuchin, standing in front of Jeff Koons's "Wall Relief with Bird" (1991)

The Wise Men

Asher Edelman

Andy Warhol Pablo Picasso Francis Bacon Joseph Cornell Yves Klein Jackson Pollock Barnes Storm The Appendix: Francis Bacon and Sadomasochism, Cheap Conceptualism, and Arts Education

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I ask myself those kinds of questions all the time, and I get asked them a lot because of my background. But I don’t profess to have the answers. Not only has there been an enormous broadening of interest in art, but there are also so many more museums, and there are going to be even more museums. The fact that art will have a different position worldwide in the foreseeable future is irreversible. We don’t know if we’re in the beginning or the middle of this rising market. We might make a good case that we’re at the beginning.

What do you tell people who want to invest in art?

I believe, as a collector and as a dealer, that the reason to buy art is because you love, love, love it. The next question is, Can you afford it? Then you must try to evaluate it, but it has to start out with “My life is going to improve by having this kind of presence in it.”  

Of course. But that doesn’t mean there aren’t people who want to use art to diversify their portfolios, so to speak.

There’s no question that for some people, it is about diversification of assets. I like that notion a lot better than the idea of speculation. The percentage of speculation in the market is lower than one would expect, especially when you get into the very items that startle us with their prices: trophies! It’s hard for me to imagine that any of the core group of 10 or 15 trophies that have sold in the past two or three years have anything to do with speculation.

Really?

You think somebody bought a $50 million or $60 million Bacon for speculation? Does that sound logical to you? With younger art, it is different. What’s the fun of going to see an off-Broadway show? There’s a sense of discovery. It hasn’t been reviewed four times. For some, hunting young art—in Chelsea or London or wherever—offers the lure that maybe this is the next Warhol.

What about art funds? Asher Edelman cites one that you founded as a rare example that worked. Can you tell me about it?

When I started the business, I created a small limited-partners fund with a structure not too unlike that of a conventional hedge fund. I tried to raise a very limited amount of money. I didn’t want the responsibility of a lot of money, and I didn’t want too many investors. I went to fewer than 10 people whom I knew well. They invested with me because they had respect for me. It still exists in its original form. They haven’t hit any home runs, but they’ve done nicely with it.

What about the bigger funds?

I honestly don’t have an opinion on them. We have to go through a cycle and see what happens. The only one I’m aware of a little bit is the British Rail Pension Fund.

Yes. It invested $100 million in art in the mid-1970s and sold off all of it from 1987 to 1999. It is often pointed to as the only major art fund that has been successful.

I don’t remember what the definition of that success was. Clearly it bought quality objects.  

And it invested for the long term.

It was very well advised. The objects it bought had nothing to do with fashion.  

I just read that Charles Saatchi is now advising a hedge fund on purchases of new art.

Without being negative about it, these things are totally out of sync with what interests me. What interests me is representing or having objects that we think are wonderful, having the pleasure of working with people, or often their advisers, to consider an artwork, understand it, explore it, try it out and decide that they want the experience of owning this thing. That is where my satisfaction comes from. You know, I’m an idealist in all aspects of my life, but I certainly am as an art dealer. I think of myself as a collector who’s dealing.

Considering your recent work with contemporary names, such as the Amer­­ican artist Liza Lou and the British duo Jake and Dinos Chapman, would you hesitate to do business with a client you knew had a tendency to flip pieces at auction?

I believe the people who buy a work of art are entitled to do whatever they want with it. On the other hand, I would hope that if they chose to do something with it, they would come back to us.