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  • Author: Charles Batchelor
  • Position: Freelance writer
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'Bear' market bulls

The wealth of oligarchs has helped lead to a revaluation of Russian art with London at the centre of sales, Charles Batchelor discovers

For much of the twentieth century, Russian art was shut off from contact with the west. A handful of émigré painters, Kandinksy, Chagall and Malevich among them, were familiar to western art lovers and collectors but many artists remained unknown.

The collapse of the Soviet Union in 1991 and the rapid accumulation of wealth by oligarchs such as Roman Abramovich, owner of Chelsea Football Club, and Victor Pinchuk, a Ukrainian steel tycoon, have changed all that. London, just three and a half hours by air from Moscow, has become the centre of the Russian art market, accounting for two-thirds of sales.

London’s already strong position in the international art market has been boosted by the opening of a specialist gallery, Orel Art, in Belgravia, and Calvert 22, a non-profit foundation in Shoreditch. Recent exhibitions including the National Gallery’s Russian Landscape and Tate Modern’s Defining Constructivism have led to greater familiarity with Russian art.

Remarkably, 90 per cent of Russian art is bought by Russians, a definition that includes citizens of the former Soviet republics including Ukraine, Georgia and Kazakhstan. “Russian buyers have a great nostalgia for, and a great pride in, their artists,” says Jo Vickery, head of Russian art at Sotheby’s London. “There are a lot of Russian billionaires buying art to fill their homes in London and the south of France,” explains William MacDougall, head of MacDougall’s Auctions, a specialist in Russian art. “But over half of what we sell goes back to Russia and Ukraine, so we are returning their heritage.”

A love of art and nostalgia for Mother Russia may be the main driving forces behind recent buying but Russian art can also represent a good investment. “Buying works of art is a way of participating in Russia’s economic growth without the political risk,” says MacDougall, who is quarter-Russian himself. “Some major buyers with their main source of revenue in Russia like the idea that they can buy something that is familiar culturally but they can hold it in the west.”

With the Russian stock market strongly influenced by oil stocks, the art market provides a better proxy for the growth of the wider Russian economy. “The stock market follows the oil market but oil only accounts for a quarter of the economy,” says MacDougall. “The art market better represents the economy with less political risk.” Art has also been less volatile in recent months. While the Russian stock market fell 70 per cent from its peak and property was off 50 per cent, art prices fell only 30 per cent.

Alongside the recently developed market for paintings is a long-established trade in fine items of jewellery from the Fabergé workshop and ceramics from the Imperial Porcelain Manufactory. Western buyers have long held sway in these areas but Russian buyers are also showing a strong interest.

All of the buyers of the 20 most expensive paintings sold at Sotheby’s Russian art auctions last December are described as private individuals from the Commonwealth of Independent States, the loose grouping formed by former Soviet republics. Many bidders set new auction records for paintings bearing evocative titles including The Bay of Yalta, Morning in the Village of Brestovets and Jetty on the River.

London hosts two weeks of Russian art auctions a year in June and December. New York, the home of many wealthy Russian émigrés, is also an important centre, accounting for just over 20 per cent of global sales. Moscow has auction houses but galleries are a more important part of the art market there.

“Before 1990 the people buying Russian art were western bargain hunters,” says MacDougall. “But now Russian buyers are prepared to pay a proper price so the bargain hunters are taking their profits. There are no bargains any more.”

Russian art was not spared the downturn that hit art markets after financial markets seized up in late-2008. “We opened in April 2009 so the timing was completely wrong for us,” says Orel Art’s Veronika Tretyakova. “We had a quiet winter but now things are busier.” MacDougall traces the start of the recovery to the first half of 2009. “There have been some good private sales in recent months, which suggests the market is strong.” A nude Portrait of Madame Alisa Rivoir with a lapdog, by Ilya Repin, a leading member of the nineteenth century “Wanderers” group, went for a record £1.4m at a MacDougall sale last June. This was well above the £800,000-£1.2m estimate and several times its previous sale price.

A world record was set for a work by Alexandra Exter, an avant garde painter who was friends with Picasso and Braque. In December, Venice, a painting on a non-Russian theme, went for just over £1m at Sotheby’s.

These are high prices for Russian painting, though they pale into insignificance compared with the £65m paid for a Giacometti figure in February – a record for a work at auction. Tens of millions are also regularly paid for work by the French Impressionists. Russian work is more affordable, with many lots at recent sales selling for between £2,000 and £5,000.

This year’s Russian season has yet to start but prices at auctions of international Impressionist, modern and contemporary art have been strong. “The Russian market is different but there is some cross-over, so this has brought a feel-good factor back to the market,” says Vickery.

The perennial favourites of Russian buyers since markets began to open up in the early-1990s have been the “classical” painters of the nineteenth and early-twentieth centuries, including artists such as Arkhip Kuindzhi, Isaak Levitan and Ivan Shishkin who captured the melancholy and scale of the Russian landscape.

“The first thing the Russians bought was the stuff they had studied in the school, the classical nineteenth century painters,” says MacDougall. Avant garde painting from the 1890s-1930s has also proved popular, but the economic meltdown persuaded some buyers to stay with the more established classical artists, whose values are more stable.

The sudden fortunes acquired by those who profited from Russia’s early experiment with capitalism drove up prices. But some experts regard recent levels as a fair reflection of the value of the works. “Previously, Russian art was undervalued because it was only bought by western buyers,” says Vickery, at Sotheby’s. “But now we have seen the market become established.”

The turbulence of twentieth-century Russia politicised art and meant precautions were necessary. Art lovers hid works after the 1917 Revolution fearing that these would be confiscated by the state. Often works were smuggled out to the west in conditions that made it difficult to vouch for their authenticity.

Artists working in Russia faced a difficult time. Art was put to the service of the proletariat during the revolution but Proletkult, the organisation set up to direct artistic enterprise, fell out of favour and was disbanded by Stalin. Policy was liberalised under Nikita Khrushchev but abstract works at a Moscow exhibition in 1962 shocked him and he dismissed them as “s––t!”. In 1974, the KGB ordered the destruction by bulldozer of an exhibition of non-conformist art in a park outside Moscow. Unsurprisingly, artists often hid their work. “It is more difficult to establish provenance than for western painting,” says MacDougall. “It is quite credible for a work to have been hidden in a basement for 70 years.”

Sotheby’s withdrew a painting from auction in 2004 after doubts arose about its authenticity. The landscape, said to be by Shishkin, carried an estimate of £700,000 but, according to a Swedish auction house that had acted for an earlier owner, it was in reality by a lesser Dutch painter and had previously been valued at just £5,000.

A reminder of Russia’s turbulent past was provided by a recent Sotheby’s sale of “rediscovered Fabergé spirited out of revolutionary Russia belonging to Grand Duchess Maria Pavlovna”. The top-selling item was a twenty-fifth wedding anniversary Fabergé imperial jewelled gold cigarette case that went to a private buyer in the US for £612,250 – more than 12 times its upper estimate.

The collection, which fetched a total of £7m, was deposited by Her Imperial Highness Maria Pavlovna, Grand Duchess Vladimir, at the Swedish legation in Russia in November 1918, the month Sweden broke off diplomatic relations with the Russian revolutionary government. The duchess died in 1920 and the treasure was forgotten for 89 years until it surfaced last year among diplomatic holdings in Stockholm.

The Soviet period prevented the development of a commercial art market but Russian art lovers of the late nineteenth and early-twentieth centuries were noted collectors and founded important public galleries. In the years before the revolution, Sergei Shchukin and Ivan Morozov, both merchants, were enthusiastic buyers of Picasso, Monet, Gauguin and Cézanne. Such men often opened their collections for public viewing.

This tradition continues today with wealthy Russian owners establishing galleries. Daria Dasha Zhukova, the independently wealthy girlfriend of Roman Abramovich, opened The Garage Centre for Contemporary Culture in a former Moscow bus garage in 2008. Zhukova raised eyebrows when she admitted in one interview that she could not recall the names of the artists she liked.

 “The typical Russian buyer got rich in the early-1990s, spent a fortune on art and made mistakes,” says MacDougall. “In the west the typical collector would have started with etchings, moved on to lithographs and would have had 25 years before buying an oil painting.”

Russians are also buying non-Russian art. Abramovich paid £17m for Lucian Freud’s Benefits Supervisor Sleeping and £43m for a Francis Bacon Triptych. Pinchuk buys Damien Hirst’s work.

There is no doubt that the inflow of roubles has made life harder for western collectors. How should the newcomer to Russian paintings start? “The new collector should start on a smaller scale, buying works on paper – [prints or drawings] – or contemporary artists,” advises Vickery. For £5,000-£20,000 you can buy a big name from the last 30 years.”

Charles Batchelor is a freelance writer and formerly worked on the Financial Times