Oct. 15 (Bloomberg) -- Roman Abramovich and Gwyneth Paltrow were among those seen browsing at London’s Frieze Art Fair yesterday as buyers negotiated for discounts from the world’s leading dealers in contemporary art.

The Russian billionaire and Hollywood actress separately visited the VIP preview, along with U.S. hedge fund manager David Ganek. A total of 165 gallery owners from 30 countries are hoping that international collectors and curators will lift the mood of uncertainty that has gripped the market since the collapse of Lehman Brothers Holdings Inc. in September 2008.

“People are making more considered choices,” said the London-based dealer Stephen Friedman. “They’re buying less, they’re buying better quality and they’re expecting more for their money.” Though buyers had returned, they were taking longer to make decisions and haggling over prices, said dealers.

The event, the seventh of its kind, runs through Oct. 18 in a 70,000-square-foot temporary structure in Regent’s Park. It is Europe’s biggest fair devoted to living artists. Demand for contemporary art has fallen over the last year. Volumes of auction sales shrank between 70 percent and 80 percent, and prices of some artists more than halved, said the London-based research company ArtTactic in an e-mail last month.

Last year, some Frieze exhibitors reported reduced sales. Twenty-eight galleries that showed at the 2008 event have not come back.

For the first time at the fair, Friedman has devoted his booth to a single installation. U.S. artist Jim Hodges’s “the dark gate,” consists of a darkened wooden room with an aperture made of sharpened steel spikes that has been dabbed with a bespoke fragrance.

Museum Interest

Hodges, 52, currently has an exhibition at the Pompidou Center in Paris. Within a few hours of the opening, the work attracted “serious interest” from a museum, said Friedman.

“People want substance now,” Friedman said. “A lot of the energy is focused on artists with established reputations.”

Chicago-based Stefan Edlis, Italian Jean Pigozzi and London-based David Roberts were also among collectors spotted during the early hours of the fair. Fashion designers Alexander McQueen and Valentino Garavani were also seen browsing.

“Last year was so rough at Frieze,” said the New York- based dealer Marianne Boesky. “Now the feeling is positive. It’s real. There’s no hype or depression. We’re now selling to people who just love art.”

Boesky sold 13 of a new series of 15 watercolors by U.S. artist Barnaby Furnas, showing the capture and execution of the Civil War abolitionist, John Brown. The watercolors, painted specially for Frieze by Furnas, 38, sold for prices between $25,000 and $30,000.

Frieze Discount

“We’ve kept the prices the same for Furnas over the last year,” said Boesky, “though we are offering buyers a 10 percent discount at Frieze.”

Several works at the fair attracted multiple reserves as dealers negotiated with collectors at length to make sales.

“It’s all about decency of transaction,” said Nicholas Logsdail, director of the London-based Lisson Gallery, which attracted three reserves on a new 4-foot-diameter Anish Kapoor gold mirror sculpture, “Turning the World Upside Down,” priced at 475,000 pounds ($759,000).

“We’re waiting to get an agreement from one of the three at a fair price that makes everyone feel good,” said Logsdail.

Kapoor, who has a one-man show at the Royal Academy of Arts, is one of the few contemporary artists whose gallery prices have increased over the last year, said Logsdail.

“They’ve gone up about 10 percent,” he said.

Neon Wall

Abramovich was seen at the Lisson booth admiring Jonathan Monk’s 2009 neon wall inscription, “Do not pay more than $20,000,” which will increase in price $10,000 every day as the fair progresses. “We sold it at the opening of the fair for just under $20,000,” said Logsdail.

The 7-foot-high painting “Country Produce II” by 35-year- old U.K. artist Nigel Cooke was reserved by two museums at 120,000 pounds at the booth of the London-based dealer Stuart Shave/Modern Art.

Cook’s hallucinogenic paintings of gnome-like down-and-outs have been bought by several museums and private collectors such as David Roberts and Dallas-based Howard Rachofsky.

“We haven’t increased Cooke’s prices over the last six months,” said Shave, “though museums do get a discount.”

Yellow Suit

“Everyone’s looking for discounts,” said Philip Hoffman, director of the London-based Fine Art Fund, wearing a bright yellow suit.

“Prices aren’t as low as I was expecting, though I looked at one work priced at $1 million and the dealer said make me an offer of $600,000,” said Hoffman. “Prices are lower at this week’s auctions, but that’s not where the better things are.”

London-based dealers Hauser & Wirth (who also have a branch in Zurich) sold Ida Applebroog’s 2009 painting “Mona Lisa” for $325,000 and three of the smaller versions of Subodh Gupta’s life-size bronze sculpture based on Marcel Duchamp’s mustachioed Mona Lisa, “L.H.O.O.Q.,” for 120,000 euros each.

All three full-size versions of the Leonardo-inspired Gupta sculpture, on show at the company’s Old Bond Street gallery priced at 900,000 euros, have found buyers, said gallery founder Iwan Wirth. “People have stepped up for good things,” said Wirth.

White Cube sold at least eight works during the first four hours of the fair, said gallery sales executive Graham Steele. One of six versions of Andreas Gursky’s 2007 photograph of medieval stained glass, “Kathedral I,” sold for $750,000. There were two reserves on Damien Hirst’s 2008 stainless steel cabinet filled with surgical instruments, “Night of the Long Knives,” priced at about $5 million, said Steele.

Tate Buys

“People want to see what’s available,” said the London- based adviser Tania Buckrell Pos, head of Arts & Management International. “Prices are particularly good now, and there’s no urgency,” said Pos. “Buyers have definitive numbers in their heads.”

Tate, the U.K. network of galleries, bought 120,000 pounds ($195,000) worth of art on the first day of Frieze, including the concrete maquette of a Beirut building and a pair of drawings done with cigarette ash.

Using money raised by the Outset Contemporary Art Fund charity, Tate Director Nicholas Serota and a team of in-house and external curators picked up six works, all by young artists not yet in the gallery’s collections.

Modern Manifesto

“It’s in a way a manifesto of what the Tate is doing at the moment: collecting young emerging art from across the world,” said Serota, standing next to one purchase. Frieze “is full of good work, and it seems to us that the Outset venture is about moving things on into the future.”

Every year, Outset -- a charity whose patrons pay a fee to gain exclusive access to artists, museum directors, and curators -- gives Tate money to buy work at Frieze and boost its collections.

Serota spoke in front of a work by Lebanon’s Marwan Rechmaoui, who was prominently represented in the Saatchi Gallery’s “Unveiled” show of Mideast art earlier this year. Rechmaoui’s “Monument for the Living” (2001-8) is a model of a tall cement block with rows of hollowed windows.

“See-Thru” (2009), by the British artist Alice Channer, consists of two pencil-drawn ellipses that are lightly colored in with cigarette ash mixed with water, and decorated with black gouache dots.

Video Tribute

The other four works are:

- David Maljkovic, “Images With Their Own Shadows” (2008), a video tribute to a Croatian artist named Vjenceslav Richter;

- Artur Zmijewski, “Democracies” (2009), a montage of 20 short films made between 2006 and 2009 of events including protests in the Gaza Strip, the funeral of Austrian far-right leader Jorg Haider, and footballer riots in Germany;

- Gareth Moore, “Neither Here Nor There” (2009), an installation made of wrecked chairs with tatty upholstery that makes them look like banners;

- Zbigniew Libera, “‘How to Train Little Girls” (1987), the slow-motion video of a little girl who is being clothed and made up like a grown-up.

(Scott Reyburn and Farah Nayeri write about the art market for Bloomberg News. Opinions expressed are their own.)

To contact the writers on the story: Scott Reyburn in London at sreyburn@hotmail.com; Farah Nayeri in London at Farahn@bloomberg.net.

Last Updated: October 15, 2009 10:43 EDT