Founders of one of the most prominent consulting agencies, Viola Raikhel-Bolot and Harvey Mendelson advise clients on art assets worth hundreds of millions of euros.
They don’t mess around. “Business first!” Fifteen years ago, these two entrepreneurs started their art consulting firm, 1858 Ltd, in response to a need – as yet relatively undefined – for independent and pragmatic advice. From London, 1858 Ltd expanded to Paris and Germany, and its directors are considering setting up in the US. Now one of the best-established agencies today, Viola Raikhel-Bolot and Harvey Mendelson tell us about their work and how it has changed.
Could you tell us about one of your best “deals”?
Harvey Mendelson: Without a doubt, when we sold what we call the “mega lot”! It was a Swatch watch collection built up over more than a quarter of a century by a Luxemburg client [Paul Dunkel – Ed.], which we put up for auction in Hong Kong – as a single lot (see photo)! The 5,800 pieces in question went to a European institution for €5.5 million: more than four and half times its initial estimate. A dazzling case with a fantastic result to be sure, but I think it also encapsulates what an art advisor ought to do: provide advice that leads to concrete results for the client.
Aren’t you primarily art specialists?
Viola Raikhel-Bolot: That’s right. But above all we’re pragmatic, and try to meet our clients’ needs. When they are satisfied with a venture involving collectibles, they return to us with their “cherished” assets. Additionally, the players, organisations and processes are often similar, if not just the same, whether it’s art, wine, jewellery, vintage cars or design. Our expertise in art applies pretty broadly to other areas.
How have your clients’ expectations changed over the past fifteen years?
VRB: Actually, they haven’t fundamentally changed. They remain largely concerned with bespoke and especially impartial advice. Around the time we created 1858 Ltd, art advisers were never really independent. In one way or another, they were always interested in transactions. But, sometimes the client's interest lies precisely in not buying, or not selling! We were convinced – and still are today – that this freedom is what collectors are looking for. What has turned out very differently, however, is the type of client we thought we would attract. Fifteen years ago, we reckoned we would be dealing with a mostly financial clientele, focused mainly on art as an asset. Today, our activity chiefly involves collectors. This change has pushed us considerably to broaden the spectrum of skills we can offer them.
With the changes in the services you provide, the advantages for your clients must have changed as well…
Every client has their own needs and demands. Young collectors will require more guidance for their purchases, while seasoned buyers will be looking for expertise on how to pass on their assets, or on insurance-related questions, for example. One of our clients calls us the “McKinsey of art”. It’s true that we have a consulting approach: getting a clear picture of what's needed (in terms of education, aesthetics, assets, risk management, protection, inheritance, etc.), and only then finding the right solution. If we don’t take the time to understand the context, the answer we give will inevitably be unsound. We work a great deal with private banks and family offices, but what end clients generally want is a one stop shop, a single front desk that can assist them with every possible question regarding their “cherished” assets. For this, they generally turn to their private banks or their family offices – but these are often unable to provide answers because they lack the in-house skills.
What is your true added value?
VRB: It can involve many aspects: it might be cutting transaction costs, accessing pieces not on the market or steering clear of transactions harmful to effective asset-structuring. But we mustn’t forget that our added value is not always obvious to the client. It’s our task to demonstrate it, again and again.
Do your collectors secure their loans with art works?
HM: That can be appropriate for some clients, and they do indeed look into the possibility of obtaining cash liquidity from their art works. But it's a question of deciding, as other assets like property can also be used as security. There are other, much simpler, quicker, and especially cheaper ways of raising money. But we are seeing these activities developing strongly with brand players or banks, which are considering them increasingly seriously to avoid losing customers.
Isn’t the role of the art advisor directly linked to the market’s lack of transparency?
HM: Partly, but not only that. It’s true that the due-diligence work we do would be much simpler if the market were more intelligible, but there would always be more work to do. And it's just one aspect of the services we provide. As for us, we strongly advocate greater transparency in the art market. It would honestly make our lives a lot easier! I think that, while information is spreading overall, the level of general knowledge is not really growing. There are no shortcuts: there is no substitute for experience.