Sept. 15 (Bloomberg) -- A pair of happy-looking wooden bears, the kind you might find in a toy store, wave at visitors shuffling through Tate Modern’s permanent collection in London.

They’re Jeff Koons’s “Winter Bears” (1988), and were owned by ex-art-dealer Anthony d’Offay until he sold them and hundreds of other works to the U.K. at a deep discount.

“Do you think that was Mr. and Mrs. Koons waving goodbye to little Jeffrey on the first day of kindergarten?” says 69- year-old d’Offay with a smile, as he shows me seven roomfuls of works in Tate Modern that were once his. There are Warhol hamburger and gun diptychs, and a giant Anselm Kiefer palm tree.

D’Offay last year sold 725 postwar and contemporary works to the nation at the price he paid for them, forgoing an estimated profit of some 100 million pounds ($165 million). He bought them for 26.5 million pounds and they were valued last year at 125 million pounds. His proviso: that they tour the country, giving under-18s easy access to recent art.

“Museums in this country are free, which is a great gift to the British people, but they have no money with which to buy,” says d’Offay. “If I’m able to help to improve the collections in this country, then I feel like a good guy.”

The more than 30 “artist rooms” recall the shows he had in his dealership off Bond Street. There’s a Robert Mapplethorpe room in Inverness, Scotland, and a Sol LeWitt room in Liverpool. Half of the works were bought after 2001, mostly from the artists, to form coherent “rooms.”

I first meet d’Offay at his Joseph Beuys room at the De La Warr Pavilion on the English coast. Wearing a navy suit, he stands beside Tate Director Nicholas Serota -- a linchpin of the donation -- who does the talking.

Buckwheat Tea

Weeks later, D’Offay courteously sees me into a wood-lined, book-filled office in his ex-gallery. We drink buckwheat tea in handle-less ceramic cups; d’Offay leans over to wipe invisible dust off the table. He is soft-spoken and gentle, with a dry wit. At times, his voice turns shrill, revealing hidden resolve.

The ex-dealer has parted with most of his wealth, and is now worth “something like 25 million pounds.” He retains a London home in Regent’s Park and an apartment in New York. “Three meals a day, a home and a holiday, that’s all you need, isn’t it?” he asks.

The office sits above his son Timothy’s store Postcard Teas, where you can drink exotic brews, and mail a postcard on the back of a bag of tea leaves. How does married Timothy feel about losing most of his inheritance?

“Firstly he’s an extremely sweet person, secondly he’s not interested in money, thirdly he’s a tea master,” replies the dad.

Ruscha, Creed

D’Offay’s work is far from done. Some $10 million worth of gifts have been made toward the project, he says, including the $4 million “The Music From the Balconies” (1984) by Ed Ruscha, now at Tate. Separately, Turner Prize winner Martin Creed has pledged a room of work.

D’Offay wants to make a room from Damien Hirst’s medically themed “Pharmacy” installation, and has asked the artist for help. Hirst was his gallery assistant as he was leaving art college, and “would make us all laugh,” d’Offay recalls.

The collector just bought Hirst’s “Painkillers” pill cabinet from a German dealer for 600,000 euros ($877,000). In a multi-item art swap with Hirst, he has traded, among others, a pair of graphic Koons works (picturing Koons naked with then- wife Ilona Staller) for a pair of newly made Hirsts, including “Necromancer” -- a vitrine containing human fetuses.

Cultural Epiphany

D’Offay grew up in Leicester, northern England. He had an epiphany viewing the collections in the local museum, including a Francis Bacon “filled with beauty and dread,” and wants to give kids the same chance. “I was an unhappy, lonely, melancholy child, and I became interested in culture,” he says.

When he was 17, his surgeon father “sort of ran away” to the Seychelles where he originated. Was he nobility?

“We went to the place that he came from,” jokes d’Offay. “It was three houses falling into a pond.”

After art-history studies at Edinburgh University, young Anthony became an art dealer. Why not a curator?

“I’m good at buying art before everybody else,” he says. “I’m good at buying things which ultimately are important.”

Marriage to Anne Seymour, then a Tate curator, turned the pair into tastemakers of the time. Their new gallery, opened in 1980, showed a slew of artists who had no London dealers back then: Andy Warhol, Jasper Johns, Willem de Kooning, Beuys, Roy Lichtenstein.

D’Offay dealt with artists and museums, not collectors and journalists. Some critics branded him a “vampire” lurking in the gallery, “probably because I looked like death,” he says. “One was in an almost permanent state of exhaustion.”

Gilbert & George

He confirms reports of a fallout with Gilbert &George, who he represented. “They were feeling restless,” he says. “We had very good and happy times together, and some bad times.”

By contrast, D’Offay stayed close to Beuys, and spent the artist’s last Christmas with him before he died in January 1986: “He felt like a father to us.”

A pink silkscreen of Beuys sits on the mantelpiece. It’s by Warhol, one of the shyest people d’Offay ever knew. D’Offay says he persuaded the New York artist to do the late “Fright Wig” self-portraits. Warhol was about to deliver a portrait of author Samuel Beckett -- “I’m going to paint an exhibition for you in really pretty colors,” he said -- when death got in the way.

In 2001, a week before the Sept. 11 terrorist attacks, d’Offay shut his gallery. Any regrets? “Not the tiniest bit, for one second, ever!” he says, raising his voice. “The story was perfect as it was, I felt proud of what we’d done, and there was something else to do.”

Britons all over the country are now getting the benefit of that “something else.”

To contact the writer on the story: Farah Nayeri in London at Farahn@bloomberg.net.

Last Updated: September 14, 2009 19:00 EDT