The art world is watching to see the fate of billionaire hedge-fund owner Steven A. Cohen.
Cohen’s $14 billion SAC Capital Advisors LP is facing an insider-trading case. The U.S. Securities and Exchange Commission has told the hedge fund it is considering suing SAC for alleged insider trading. Federal prosecutors have charged Mathew Martoma, a former SAC Capital portfolio manager, and the SEC sued him the same day.
Cohen, 56, is worth $9.5 billion, according to the Bloomberg Billionaires Index. He is also one of the world’s biggest art collectors, with works by Van Gogh, Manet, de Kooning, Picasso, Cezanne, Warhol, Johns and Richter.
His purchases have helped boost prices of artists such as Damien Hirst, whose shark-in-formaldehyde he bought for $8 million.
“He is known for his willingness to pay top prices for the best work,” Todd Levin, director of New York-based Levin Art Group, said in an interview. “In the worst case scenario, he might not be able to buy going forward and there will be some disappointed gallerists.”
Since he started his hedge fund in 1992, Cohen has achieved average annual returns of 30 percent, with just one money-losing year: 2008, when his main fund tumbled 19 percent.
Cohen started collecting art in about 2001. His taste has shifted from Impressionist to contemporary works.
An early purchase was Edouard Manet’s 1878 “Self Portrait with a Palette” which came from the collection of Las Vegas casino developer Steve Wynn. It probably cost Cohen between $35 million and $40 million, according to dealers with knowledge of the matter.
He sold it for 22.4 million pounds ($33.2 million) at Sotheby’s, London, in June 2010, setting a record for the artist at auction.
In 2006, he offered to buy Picasso’s “Le Reve (The Dream),” priced at $135 million, also from Wynn. The purchase was canceled after Wynn, whose vision has deteriorated owing to retinitis pigmentosa, accidentally put his elbow through the canvas.
Cohen often favors discreet, privately-brokered purchases, though he’s become a more visible presence on the gallery circuit.
In June, he made the rounds at the Art Basel fair wearing a baseball cap with the logo “NERO” above his trademark wire-rimmed glasses and zip-neck jersey. Dealers identified him as the buyer of Gerhard Richter’s 1986 abstract, “A.B. Courbet” which was on view in the booth of New York’s Pace Gallery, priced between $20 million and $25 million.
A few selections suggest Cohen has a taste for the dark. He bought one of Francis Bacon’s screaming “Pope” canvases for about $16 million, according to dealers.
The other creepy work, Hirst’s shark piece, “The Physical Impossibility of Death in the Mind of Someone Living” required a new shark when it became evident that the old one was definitely not only dead but obviously rotting.
He also owns the original version of Marc Quinn’s most famous creation: a head called “Self” and fashioned from the artist’s frozen blood.
In 2009, Cohen lent 20 artworks featuring women from his collection for an exhibition at Sotheby’s. Willem de Kooning’s “Woman III” (cost: $137 million) joined pieces by Picasso, Cezanne and contemporary artists Marlene Dumas and Lisa Yuskavage. At the time, Bloomberg reported that the group was estimated to be worth about $450 million.
Recently, Cohen sent another Richter abstract, “Prag 1883,” to a Christie’s International auction on Nov. 14. Estimated at $9 million to $12 million, it failed to sell.
This was before the latest headlines started to break on insider-trading inquiries. Curiosity will grow if a question mark hangs over the future of his collection.
“Whether Steve Cohen owned the work neither adds nor detracts from its value,” Levin said of the Richter. “Provenance is a function of time and vision. And Cohen has been collecting seriously for about a decade. If he were to sell, he might take a loss depending on market timing.”
Jonathan Gasthalter, a spokesman for SAC, returned a telephone query from Bloomberg News on Nov. 30 by declining to comment on Cohen’s plans to buy or sell art.
“The market can absorb the loss of one collector,” said the London-based dealer Kenny Schachter. “It’s more a case of the vultures circling over what he’s bought. Cohen was always pruning and improving his collection. If he has to sell, his name isn’t a celebrity provenance that adds 25 percent to prices. The premium comes from knowing he always bought top quality.”
(Katya Kazakina and Scott Reyburn write about the art market for Muse, the arts and culture section of Bloomberg News. Opinions expressed are their own.)