Lucian Freud painting sells for record-breaking £35.8 million

Britain Lucian Freud

A Lucian Freud painting of a nude Jobcentre clerk was auctioned yesterday, raising $56.2 million (£35.8 million), and becoming the most expensive Freud painting ever sold. It's one of a number of record-breaking art sales this week, and demonstrates just how the market for fine art is booming.

Benefits Supervisor Resting was painted in 1994 and shows Sue Tilly (pictured above with the painting in 2012) naked on a sofa. It was sold by Christie's in New York yesterday.

It was the second of four paintings he made of Tilly in his 70s. The third in the series sold in 2008 for $33.6 million - becoming the most expensive painting by a living artist ever to be sold at auction. The incredible rise in value in Freud's work since then means the latest sale fetched an additional $20.4 million.


The price surprised Christie's, which had placed an estimate of between $30 million and $50 million on the painting. Brett Gorvy, International Head of Post-War and Contemporary Art at Christie's, said that it reflected high prices across the sale, adding: "The response that we saw to the sale this evening proves the sophistication, knowledge and competitive urge of many of our top buyers. They were pursuing not just great works but also great collections tonight, and showed they were willing to stretch and stretch some more to have the best."

Brooke Lampley, Head of Impressionist and Modern Art in the Americas for Christie's added that it had been a record-setting week for the global auction market. As we reported earlier this week, the same auction house sold Picasso's Women of Algiers for a world record $179.4 million. The Picasso painting had also risen incredibly in value over recent years: Christie's sold it in 1997 for $31.9 million.

Should you invest?

The global art market as a whole is booming, and last year reached a record of $68 billion. That's double the level during the crash of 2009, and slightly above the previous peak in 2007. On average, prices for contemporary and post-war art have risen 19% in the past year. As a result, Deloitte claims the market is attracting speculators, and that at the moment almost three-quarters of art purchases are made at least partly as an investment.

However, the risks are high, costs are high, and prices are volatile and unpredictable. In addition, massive rises in the cost of the most popular pieces skew the overall performance figures - some experts claim the value of the most expensive works of art is growing at five times the rate of the rest.

They also add that the art market tends to rise and fall with optimism in the rest of the market. So when the market suffers the next bout of misery, we can expect lots of investors to be left with very attractive pictures, and rather less attractive returns.

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Alternative investments
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Lucian Freud painting sells for record-breaking £35.8 million

Fine wine is one of the best-performing asset classes of the last 20 years, and prices are still going up as demand from China hits new highs - particularly at the top end of the red wine market.

However, there are no guarantees that this trend will continue, and the experts recommend that nobody goes anywhere near wine as an investment unless they can afford to lose a substantial proportion of their money - or if they would be happy drinking their losses.

They highlight that in 2008 and 2011, the market saw some serious slips - in fact in 2011 it fell 30% - so it’s important to be alive to the risks

We’re used to the idea of the value of cars falling over time, but desirable classic cars can actually gain in value. The most desirable handful of cars have seen their value double in the past four years, while even the kinds of classics that most people can afford are increasing in value by anything up to 20% a year.

However, as with all of these alternative investments, this isn’t guaranteed to continue in the future, so you should never invest what you cannot afford to lose.

Buyers also need to bear in mind that unless they are keeping the car in mint condition in a garage, they need to pay to keep it on the road - which can easily cost £1,000 a year - more if something big goes wrong.

Some owners think of this as the price they pay for the hobby of owning the car - quite aside from the investment - but if you consider the two together, it’s easy to see how even if the car itself increases in value, you’ll end up paying out more than you gain.

According to Knight Frank, antique furniture has had the worst run of all of the luxury investments. Prices fell 8% last year, and are down 22% in five years and 24% in ten.

This is partly because older antique furniture is falling out of fashion. As a result, more fashionable early and mid 20th century pieces have done better, and are up 29% in ten years.

Passing fashions make this a particularly volatile investment, so in this case more than any other, investors should buy things because they want to see them in their home - with the handy side-effect of a potential increase in value if they buy something iconic and unusual.

And while they should buy the best they can afford, they need to ensure they do not spend more than they can lose - or choose to keep in the lounge if the bottom falls out of the market.

Investing in rare coins is one of the most buoyant parts of the alternative market at the moment - with values up 10% in a year, 90% over five years, and 221% over ten years. However, this is definitely an area for experts, because unless you know what you are doing it’s easy to be taken in by counterfeits, doctored coins, and dealers who encourage you to spend more than the coin is worth.

Most people tend to start collecting coins as a hobby, investing to own something they love, hoping they will see some gains, but willing to take a loss on their collection if they ever had to sell. With this sort of approach, the big gains are likely to be well beyond your reach, as they are focused on the top end of the market. However, it should protect you from unaffordable losses if the value of your collection drops.


Picasso Painting Sets World Record for Art at Auction $179M

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