Sept. 19 (Bloomberg) -- Buyers from the former Soviet Union and the Middle East were more active than those from the U.S. at Sotheby's 111.5 million-pound ($199 million) auction of new work by Damien Hirst in London, said art dealers.

Ninety-eight percent of the 223 lots in Sotheby's Sept. 15 and 16 ``Beautiful Inside My Head Forever'' sale found buyers, generating a total that, with fees, exceeded the estimate of 65 million pounds to 98 million pounds. Twenty-four lots by the U.K. artist sold for more than 1 million pounds, said the auction house, which has its main salerooms in New York. Unusually, it did not release a geographical breakdown of buyers, saying that at this auction it was ``proprietary'' information.

``If that sale had been held in New York, it would have been a flop,'' said London-based dealer Conor Macklin, who was in Manhattan on the morning of the sale. ``The atmosphere is terrible here,'' said Macklin, of the Grosvenor Gallery, in a telephone interview. ``For a lot of people, art is no longer a priority. Deals are being canceled.''

The auction kept alive a 10-year bull run in the art market. It was the first time a major contemporary artist had sold a large body of work directly at auction rather than via a commercial gallery. The sale began on the day that financial markets reeled as Lehman Brothers Holdings Inc., the fourth- largest U.S. investment bank, filed for bankruptcy and Merrill Lynch & Co. agreed to be bought by Bank of America.

``There weren't many members of Sotheby's New York contemporary-art department present,'' said the Dusseldorf-based art adviser Jorg-Michael Bertz, who was at the sale's 70.5 million-pound evening session. Bertz worked in Sotheby's Impressionist and modern art department until 2003.

Different Crowd

``There weren't many major collectors or dealers in the room either,'' said Bertz in a telephone interview. ``It was a completely different crowd.''

Thirty-five percent of the buyers in the evening sale were new to Sotheby's contemporary-art department, the auction house said in an e-mailed statement.

``I've spoken to my clients, and it's clear Americans were quieter than usual,'' said Philip Hoffman, chief executive of the London-based Fine Art Fund, in a telephone interview. He said that while the fund spent $3 million on an early installation piece by Hirst in August, it didn't buy at the Sotheby's sale.

``At least 10 percent of the evening sale went to Middle Eastern buyers,'' said Hoffman. ``Two of my clients from the region told me that they each spent between $4 and $5 million that evening.''

Americans Compete

American bidders did compete for two of Hirst's formaldehyde sculptures. Bruno Vinciguerra, chief operating officer of Sotheby's, New York, acted for a client to buy ``The Kingdom,'' a black-framed tank containing a 7-foot, 9-inch tiger shark, for 9.6 million pounds with fees against a highest estimate of 6 million pounds.

Alexander Rotter, a contemporary-art specialist at Sotheby's, New York, taking bids for a client, was an underbidder -- as was Hirst's dealer White Cube -- for ``Golden Calf.'' It sold for 10.3 million pounds with fees to Cheyenne Westphal, Sotheby's European chairman of contemporary art, bidding on behalf of a client. The preserved Charolais bull calf, embellished with gold horns and hooves, had been expected to fetch up to 12 million pounds.

Other formaldehyde works struggled to attract bidding. In the evening session, ``Theology, Philosophy, Medicine, Justice,'' featuring four bull sharks in two tanks, failed to find a buyer. In the following day's sale, ``The Broken Dream,'' consisting of a severed ``unicorn'' head in formaldehyde, was bought by White Cube, for 505,250 pounds with fees against a low estimate of 600,000 pounds.

Loaned Shark

Hirst's 1991 shark-in-formaldehyde sculpture, ``The Physical Impossibility of Death in the Mind of Someone Living,'' is on a three-year loan to the Metropolitan Museum in New York. It was bought by SAC Capital Advisors LLC founder Steven A. Cohen for $8 million. Other U.S. collectors who have acquired major Hirst pieces include Warhol-specialist Jose Mugrabi (who attended the London sale) and hedge-fund manager Adam Sender.

Shiny metal cabinets filled with manufactured diamonds and abstract butterfly paintings that resembled Islamic mosaics -- both new departures for Hirst and created specially for Sotheby's auction -- were the sale's outstanding successes.

``This kind of Hirst is very new-market taste,'' said Mark Poltimore, deputy chairman of Sotheby's Europe, as the 9-foot- wide geometric butterfly painting, ``Ascended,'' fetched 2.3 million pounds with fees, three times its highest estimate, in the day sale. ``It's cool, trendy, international and it's not going to offend anyone.'' Poltimore is responsible for clients in the Middle East, Russia and India.

Russian Lots

Alina Davey, a Russian-born Sotheby's representative based in London, bought at least five lots on behalf of clients bidding on the phone.

Davey secured the 9-foot-wide stainless steel diamond cabinet, ``Fragments of Paradise,'' for 5.2 million pounds with fees against a top estimate of 1.5 million pounds. She paid a further 2.6 million pounds with fees -- double the upper estimate -- for two 4-foot 6-inch-wide gold-plated diamond cabinets, titled ``Memories of/Memories With You.''

``That was the sort of show-off bling that appealed to the sort of crowd that has to have the latest Louis Vuitton handbag,'' said Hoffman, who was seated between representatives of Gagosian Gallery and White Cube, during the evening sale.

White Cube, which, according to a report published by the Art Newspaper on Aug. 23 had more than 200 unsold Hirst works in stock, purchased five works for clients and bid on 20 others at the evening sale, said Honey Luard, the gallery's head press officer.

`Mold-Breaker'

``Once again Damien has shown he is a mold-breaker without equal and we are immensely impressed and proud of his achievement,'' said White Cube after the sale in a statement issued by e-mail. ``It is clear that the interest in Damien's work has significantly expanded and we are relishing the prospect of working with him to continue to develop this.''

Hirst's other main dealer, Gagosian, which represents the U.K.'s richest artist in the U.S., bid on behalf of clients for ``three or four things'' said Hoffman.

On Sept. 2, the research company ArtTactic published a report that said the auction was crucial to confidence in the contemporary-art market.

``The sale performed as expected, but a little more on the positive side,'' said the report's author, Anders Petterson. ``Does this mean the contemporary-art market is saved? The sale was so specific that I'm not so sure now.''

(Scott Reyburn writes about the art market for Bloomberg News. Opinions expressed are his own.)

To contact the writer on the story: Scott Reyburn in London at sreyburn@hotmail.com.

Last Updated: September 18, 2008 22:16 EDT