When Finance Bro Met Gallerina
The corporate-financialisation of the art world
Courtesy of NBC
Seismic shifts have happened in the art world in recent years, but last June we heard perhaps the most exciting, terrifying, and for some infuriating rumour in a while: the prospect of a power couple that marks the knot-tying of a long-suspected alliance.
As much as I would love to delight you with my take on Midtown uniform wearers and frosty overqualified female gallery staff, the real protagonists here are the world-class Perrotin Gallery and Colony Investment Management, who are currently waltzing their way into negotiations that involve the Parisian gallery handing over a whopping 60% of its contemporary art business to the French private equity firm.
Art and finance have been indulging in a decade-long flirtation, but this headline might just hint at an official engagement at last. Finance Bro and Gallerina are getting hitched!
Art-corporatising events
As we dive into this colourful saga, let’s recap the latest episodes of the art world’s corporate makeover:
Frieze acquired The Armory Show in New York and signed an agreement to acquire EXPO CHICAGO, showing it means serious business on American soil (July 2023)
Gagosian announced their Board of Directors, proving that art galleries are stepping up their corporate game (November 2022)
Christie’s pulled out their VC hat and launched a Venture Capital firm to support tech in the art scene (July 2022)
PACE Gallery acquired Kayne Griffin (February 2022)
L.G.D.R. merger (August 2021) which has, by the way, just come apart with Rohatyn dropping out (August 2023)
Drahi’s BidFair USA acquired Sotheby’s in a leveraged buyout (June 2019)
Bonhams’ seemingly never-ending shopping spree buying competitors in the below-$1-million-auction market
Artists that produce industrially and have adopted corporate structures with huge staff and defined functions (Damien Hirst, Jeff Koons, Takashi Murakami..)
Rewind to a mere decade ago, and the art world was still figuring out how to spell “contract”, let alone navigate complex corporate-financial transactions. Back then, the art market was — as seasoned insider Josh Baer said — a “mom-and-pop”, handshake-based affair.
Perrotin Gallery, Courtesy of TimeOut
Why the art world is going corporate
Now, let’s talk about the art world’s transformation from its mom-and-pop beginnings to its corporate lift. Remember the one big fall the art market took in the early nineties? It was like slipping on a banana peel while juggling priceless Chinese Qing Dynasty vases. That was also when top gallery PACE joined forces with Wildenstein, painting a not-so-pretty picture of the market’s health.
It’s no surprise the art market nearly went bust in those years. With Wall Street trembling, Japan’s art bubble bursting like an overinflated balloon due to a corruption scheme after the payoff of real estate loans, and AIDS casting a big shadow on the scene. The art market was a roller coaster that made us all hold onto our fedoras for dear life. Not forgetting big collectors Swedish Fredrik Roos and Swiss Thomas Ammann dying in those very years. A reminder that the art market can be made by a single person and can equally crumble down with that person exiting the scene. If, say, Jeff Bezos sneezed, the art market would catch covid. In other words— if he wanted to throw a couple of billion dollars into art next year, that would likely affect the market.
Fast forward to today, after facing moderate stumbles like 9/11 and Lehman Brothers in 2008, art folks probably started realising that in order to avoid falling flat on their derrières again, they needed to corporatise and act more like proper companies and brands.
What lies ahead
Galleries expand vertically and horizontally and consolidate in a few market rulers
Galleries brandify to capture new millennial $$
Institutional investment is welcomed and sought as competition for the mega-market podium intensifies
Small galleries merge to share resources and staff
As we bid adieu to conventional art market archetypes and say hello to Art Inc., this new chapter of the industry raises big questions: How will these changes impact the structure and values of the art world? Can Finance Bro and Gallerina navigate the tricky waltz of the corporate-financialisation of art without stepping on each other’s toes?
The Perrotin-Colony deal opens the door for the gallery to reinforce its existing market position, be more agile, and expand its real estate strategy (that’s where Colony’s expertise seems to lie). Where does that leave the heavyweights like Gagosian? Are they getting twitchy and will they end up after all in the arms of LVMH confirming the juiciest yet categorically dismissed acquisition rumours? It’s the art industry’s version of a will they, won’t they cliffhanger that even Netflix’s corniest romcom would envy.
Commercial success vs. curatorial integrity
Art is making its mark in the mainstream consciousness. More people are familiar with famous contemporary artists who have become proper brands on the global pop radar (Kusama, Murakami, Hirst etc.). As Millennials are cashing in their tokens, whether they’ve won them in the startup casino or scored big on the inheritance lottery, galleries are brandifying hoping to catch the eye of a generation that is as picky about brands as it is about avocado toast.
As institutional investment strides onto the grand stage of the art world, the tension between commercial success and curatorial integrity becomes inescapable. With greater scrutiny on growth and profitability indicators, galleries and their backers need to solve the puzzle of maintaining their commitment to nurturing art that contributes to meaningful dialogue, rather than solely focusing on chart-toppers.
So grab your popcorn because Gallerina and Finance Bro might just give Frida Kahlo and Diego Rivera a run for their money in the drama department.
